Instant Insights / Health Care Cost Transparency, Surprise Billing, and the Employee Benefits Industry

Typically, patients, and their employers, don't know the cost of health care or are given inaccurate estimates. Then come the surprise medical bills and costly overruns of employers' benefits budgets. Here's a look at the health care cost transparency problem and how people are trying to solve it.


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At the beginning of 2019, the Trump Administration revived the conversation around hospital price transparency with a new rule requiring hospitals to make their standard base prices for care or services — chargemaster prices — public. In the months since, there has been discussion of going further by requiring hospitals to disclose their negotiated rates with health plans. Facing increased public scrutiny on the rising costs of drug prices, the pharmaceutical industry and pharmacy benefit managers, or PBMs, have also been a central target of the conversation.

As Health and Human Services Secretary Alex Azar recently commented at the National Business Group on Health’s annual conference, these efforts are about making costs as transparent as possible to promote competition among the available health plan options.

All of this activity may mean the timing is right for a new era of health care consumerism, where cost transparency enables patients to comparison shop, while holding payers, providers, and pharmaceutical companies accountable. But as anyone who has actually experienced the American health care system is all too aware, the reality is: making informed health care decisions is harder than shopping for typical consumer products or services.

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