Announcement of Public Workshop, "Examining Health Care Competition" ("Health Care Workshop") Project No. P13-1207 #00076

Submission Number:
Andrea Caballero
Catalyst for Payment Reform
Initiative Name:
Announcement of Public Workshop, "Examining Health Care Competition" ("Health Care Workshop") Project No. P13-1207
To Whom it May Concern: Consolidation among health care providers in U.S. health care markets has become ubiquitous. Over the past two decades, hospitals in the United States have become highly concentrated as they have shifted away from independent status and merged with other competing facilities, or integrated with multi-hospital systems. Consolidation can increase provider market power leading to higher prices, less efficient outcomes, misallocation of resources, and lower overall societal welfare. Numerous recent studies have shown that the increase in unit prices-defined here as the cost of hospital and physician services, including medications-in both inpatient and outpatient settings is the single biggest driver of increases in health care spending. Allowing consumers, who are paying an increasing share of the costs of care, to select providers based on quality and price motivates providers to compete in those domains, akin to how other non-health care markets function. With price variation as high as 700% for selected services in some markets and significant differences in quality, price information must be available to those who need to make decisions or who guide consumers in doing so (e.g., health coaches, nurses, and primary care physicians). Price transparency can also inform employers working to build long-term strategies to improve value. For these reasons, Catalyst for Payment Reform (CPR) has made price transparency once of our core initiatives. When we released our inaugural Report Card on State Price Transparency Laws in 2013, it was the first time policy makers, consumer advocates, and other health care leaders had a comprehensive resource showing how readily consumers could find health care prices in every state across the country. With so many states earning only a failing grade, it was clear a lot more action had to be taken by states to ensure consumers have reliable information on which to make important health care decisions. We were pleased, therefore, to see the 2013 Report Card start a dialogue and in some cases, prompt lawmakers to introduce legislation, even if some bills were not voted into law. In this year's Report Card, we decided to raise the bar, no longer grading state laws on a curve, as we did in 2013. We also decided to take a deeper look at whether these laws were achieving the ultimate goal- ensuring consumers have access to meaningful information about the price of their health care. For this reason, we expanded the scope of our inquiry to examine not only state laws on the books, but also states' price transparency regulations, price transparency websites, and all-payer claims databases, the ideal source of data for these websites. Unfortunately, few states "make the grade." I have enclosed a copy of our 2014 Report Card on State Price Transparency Laws and hope the information contained in the report can help you identify public policy strategies to enhance price transparency and thus, boost provider competition. Sincerely, Andrea Caballero Program Director Catalyst for Payment Reform