Consumers, employers and just about everyone else interested in health care prices will soon get an unprecedented look at what insurers pay for care, perhaps helping answer a question that has long dogged those who buy insurance: Are we getting the best deal we can?
Starting July 1, health insurers and self-insured employers must post on websites just about every price they’ve negotiated with providers for health care services, item by item. About the only exclusion is the prices paid for prescription drugs, except those administered in hospitals or doctors’ offices.
The federally required data release could affect future prices or even how employers contract for health care. Many will see for the first time how well their insurers are doing compared with others.
The new rules are far broader than those that went into effect last year requiring hospitals to post their negotiated rates for the public to see. Now insurers must post the amounts paid for “every physician in network, every hospital, every surgery center, every nursing facility,” said Jeffrey Leibach, a partner at the consulting firm Guidehouse.
“When you start doing the math, you’re talking trillions of records,” he said. The fines the federal government could impose for noncompliance are also heftier than the penalties that hospitals face.
Federal officials learned from the hospital experience and gave insurers more direction on what was expected, said Leibach. Insurers or self-insured employers could be fined as much as $100 a day for each violation and each affected enrollee if they fail to provide the data.
“Get your calculator out: All of a sudden you are in the millions pretty fast,” Leibach said.
Determined consumers, especially those with high-deductible health plans, may try to dig in right away and use the data to try comparing what they will have to pay at different hospitals, clinics, or doctor offices for specific services.
But each database’s enormous size may mean that most people “will find it very hard to use the data in a nuanced way,” said Katherine Baicker, dean of the University of Chicago Harris School of Public Policy.
At least at first.
Entrepreneurs are expected to quickly translate the information into more user-friendly formats so it can be incorporated into new or existing services that estimate costs for patients. And starting Jan. 1, the rules require insurers to provide online tools that will help people get upfront cost estimates for about 500 so-called “shoppable” services, meaning medical care they can schedule ahead of time.
Once those things happen, “you’ll at least have the options in front of you,” said Chris Severn, CEO of Turquoise Health, an