Short Takes On News & Events

Employers, Unions Jointly Demand Health Care Price Transparency

By Russ Mitchell

November 1st, 2012, 1:39 AM

Employees who feel completely mystified by the prices they’re charged for medical procedures might be surprised to know their employers feel the same way. On Thursday, a consortium of major companies and labor unions, including GE, Wal-Mart, Boeing and the AFL-CIO issued a manifesto demanding price transparency from both health care providers and insurance companies.

Consumers “have the right to know the price and quality of their health care choices,” the consortium said in a statement — especially as health care costs continue to rise and high-deductible health care plans become more common.

For decades, consumers have been effectively blocked from learning the true price of medical procedures until the bill came due, with no chance to shop for a better deal, according to the consortium, which is represented by the nonprofit Catalyst for Payment Reform (CPR). Even employers with access to claims records still struggle through data thickets to learn what individual procedures cost at different hospitals and clinics. High-deductible insurance plans — often set at $1,000 or $2,000 — are increasing the demand for greater transparency.

In response, insurance companies have created online “tools” to help consumers compare medical providers based on price and quality.

But CPR Executive Director Suzanne Delbanco said employers find many of those tools “clunky” to use and lacking sufficient price and quality data. In addition, many insurance contracts with employers ban them from sending data for analysis to a third party, who might also offer advice or build better tools. Thus far, the insurance companies, which she declined to name, have not budged on the ban.

Delbanco said it’s time to “make a stink about this” because the third-party ban is stifling innovation that could help consumers shop for medical care based on price and quality. More innovative tools, she said, “might even inspire the (insurance companies) to work harder on their own tools.”

Another group representing corporate health care payers and working with CPR, the Pacific Business Group on Health, has issued critiquesof insurance company shopping tools, with suggestions for improvement.  CPR on Thursday released guidelines to help employers and consumer groups make their own assessments.

Self-insured employers, which includes most large companies, also “have the right to use their claims data to develop benefit designs and tools that meet their needs,” the statement said.

Besides large corporations, the consortium includes government entities like the California pension provider, CalPERS. The AARP also signed on to the statement.

“If you get enough critical mass of customers all asking for something at the same time, it helps create a business case for the health plans to change the way they’ve been doing things,” Delbanco said.

12 Responses to “Employers, Unions Jointly Demand Health Care Price Transparency”

  1. WellRead29 says:

    This is akin to me strolling into Walmart, picking out a Wide-Screen Plasma TV for $799.00 and demanding to know who they bought it from, how much they paid for it, and why it’s only $699.00 at the store across town (we’ve observed this phenomenon on many items they don’t publicly advertise, like milk).

    Not sure they would stand up to the scrutiny themselves. Glass houses and all that.


  2. terence says:

    What fatuous nonsense! comparing buying a TV to buying healthcare.

  3. Dave K says:

    I don’t think the comparison is all that nonsensical… except that better would be picking out the TV with no price on the shelf… the sales clerk offering the estimate that it is likely $749.00… only to be charged $1,199.00 at the checkout, plus another $378.00 for the power cord, remote, cables, and other necessary accoutrements. And you must come back in three weeks for a mandatory review of how well you’ve set it up, at $251.00.

  4. John Spek says:

    OK – so you find out the procedure is 10,000 at one hospital, and 13,000 at another

    Either hospital bill still leaves you with the same deductible

    But enter hospital #3
    but your insurance does not work with hospital #3

    so you drop your insurance,
    buy coverage on the exchange
    as a bonus – taxpayers kick in to pay your premium because you earn under 400% of poverty level

    employer gets fined because you dropped coverage and bought on the exchange with help
    so they drop coverage for everyone, since that fine is less cost

    you still have a deductible to meet

    and then you find out why hospital #3 was less costly
    as the staff infection almost kills you

    then you file for disability
    but learn that was dropped because you drop[ed employer coverage

    and while you are out sick
    your new insurance cancelled for non-payment
    because you have no money

    bet this happens one month after procedural price transparency is in place

  5. Robert says:

    It’s very odd that someone would argue against price and quality transparency. This should have been one of the first steps of healthcare reform. Think about how we now buy cars – we’re much more informed and less likely to be taken advantage of by a car dealer as we can go online to find out the dealer invoice price, special incentives, holdbacks, etc. Dealers obviously still make a profit . Another area I’d like to see reform is to re-evaluate the consumer benefit of allowing large hospital systems to merge. In some states now you have to drive hours to find a hospital that isn’t part of the same system, hence to find competition. It’s all in the name of bigger scale=cost savings but really just locks out competition and I’m quite sure any cost savings drop to the bottom line of the hospital, instead of reducing prices.

  6. s hall says:


    I read it; need plainer language; unclear intentions due to wording. Perhaps a summary for lay people! Statement of Intent – What consumers should ask for and what providers accountabilities are.

  7. rich says:

    Any post above that is against the idea of transparency is doing so for one simple reason. They have enjoyed a decades old gravy train at the expense of the consumer and they a frightened to death that it’s all going to change. They are seeing their Marcus Welby world turned upside down and they are seeing, maybe in mid career, that they may be in the wrong profession. Healthcare is changing. It will be more consumer oriented and less provider oriented. Fee-for-service healthcare is coming to an end. The future of healthcare in America will not look anything like it has in the past. Providers will be held to standards or they will be gone. The consumer will have much more to say and much more control. Transparency will be the norm. The party is over. The extreme wealth is over. The abuse is gradually coming to an end. Employers and unions are demanding transparency in pricing, and they will get it!

  8. KD says:

    Price transparency? Here is a scenario…you find out that the MRI you are having costs 1,000 at your local community hospital, but 5,000 at the large teaching hospital down the street. Both are in your insurers network. Technically, medicare only reimburses $300.00 for the procedure and the insurer manages to have a negotriated rate at 125% of Medicare for radiology services. Your deductible is based on the negotiated rate, not the hospital’s actual charge. So, you would be charged no more than 1,000 for either hospital, but you have made a huge stink because you found out the teaching hospital charges 5,000. In the meantime, you want to know why your deductible and your premium are increasing and demand transparency. What you don’t know is that there are two people in your company that have had children born prematurely and are currently in the NICU fighting for their lives running a 500,000 plus bill. Their claims data is included in your premium just as your claims data (based on the negotiated rate, not the charges rate) would be for any visit you had or illness, etc…. Later, you go in for a mammogram, but don’t want the standard mammogram because you heard that the 3D mammogram is better at detecting cancerous masses. The 3D mammogram costs 3x as much, but that is what you have elected to have, because it is your care and your life. That claims data will be used for premium calculation and the cost of that 3D mammography machine is worked into hospital costs because it is expensive. Then, of course, you add in all the services that many large, teaching hospitals have, such as elaborate burn units, etc….that get little to no reimbursement from the government, but are imperative to being a world class hospital. Soi, the costs, like any other business have to be attributed to other areas of the organization.

    The point? Transparency is great IF you know what you are looking at, how all the factors are taken into account, and keep your own selfish needs out of the equation – here is your distribution of wealth. Your money does not only go to your care. It is pooled in a variety of ways. The difference between our system and a socialized system – we still have the ability to walk in and demand a high tech treatment or drug we saw on TV. Like it or not, it isn’t as easy as looking at the cost of a procedure and the premium you pay. Then, take into account government regulation. Does the system need to be fixed, Of course. But, try placing some blame on society, too – our unhealthy lifestyles and our demand for the best care at no cost.

  9. rich says:

    KD sums it up pretty well! He makes the case for single-payer in a nutshell. The sooner we get there, the better! Let’s face it, Obamacare is only the first step toward an eventual single-payer system. It was a baby step. FACT: We will have single-payer healthcare at some point in the future. Smart people understand that fact. The dummies are still in denial.

  10. KD says:

    Rich, My concern with single payer? Rationing. First you need to change the culture of the people. One of the reasons that many single payer systems are going bankrupt and turning to the managed care system (payers are getting tons of business overseas) is because the supply can’t keep up with the demand. People need to be prepared that they will not have access to every test, drug, etc…that they want when they want it. There may be long wait times for services and, something that we are seeing now, doctors are ordering lifestyle changes and therapy services before ordering high cost testing. This is, of course, in part due to quality contracts and global payments, but this is not very different than what would be seen under a single payer system. In addition, it is necessary to take inot account the cost of medical education. Many physicians want to be paid what they are being paid because they spend $300,000 on an education….and speaking as a PhD with a mountain of debt…a $50,000/year job simply doesn’t cut it. Without loan debt? It would be workable. So, without the higher salaries, you will see fewer physicians – not because they don’t want to be physicians, but because they simply can’t take on the debt associatged with the education.

    I have chronic conditions and I have been fortunate to have maintained health insurance in some way for my entire life. I believe that everyone should hav access to health care. However, I, also, believe that before we turn to a single payer system or even see a true improvement in the one that we have now, we need to see a change in how people perceive health care and how they perceive health in general and we need to see a change in this everything for nothing mentality. There will always be a cost. It simply depends on what you are willing to “pay”.

  11. Stan says:

    Transparency will guide people to one of two low cost providers: those with outdated physical plant or underpaid staff (not union friendly), or those with low “cost shift” to cover a patient mix that includes primarily employed, insured patients (think Kaiser).

    It will eventually bankrupt the “mission-based” providers who care for the poor, and when they are gone, the free-riders like Kaiser will have to pick up their mission work and cover the cost shift. At that point Kaiser premiums will go ballistic as they will ahve no competitors to push to poor to.

  12. daryl c. says:


    Why are you so afraid of rationing? If you are honest, you’ll admit that doctors and other health professionals rarely consider cost when treating a patient. Why? Because it doesn’t affect their bottom line. They can order up one MRI or a they can order up a hundred MRIs. Why? Doing so doesn’t affect them in the least. They can prescribe a brand named drug when a perfectly good generic is available. Why? Doing so does not affect their bottom line and, in the case of prescribing brand named drugs, the pharma salesman throws in a few sky box tickets to Sunday’s NFL game. Did you ever think that maybe changing the incentive might lower costs? Did you ever think that dropping fee-for-serive and adopting a system where wellness and good outcomes is rewarded might lower costs. If a provider’s own wallet is tied to how he/she treats a patient, I’ll bet he/she does a better job at being more thrifty and efficient, huh? KD, you sound like you are a person that is trying to protect their turf at all costs. That’s why you, and people like you, have so much to lose. Hey KD, the gravy train is coming to an end. Regardless of who gets elected on November 6th, the party has to end for people like you. Rationing, for want of a better word, is in our future. Thrift in our healthcare system is in the future. Efficiency is in the future. Call them death panels or any other word that makes you feel good, it’s coming Rich makes some good points! It’s coming!