Hospital Price Transparency Rule Awareness Low Among Consumers

Whether a hospital price transparency rule designed to enable consumers to shop for healthcare services will lower healthcare costs is still up in the air after a recent poll shows low awareness of the rule among American adults.

The KFF Health Track poll reveals that just one in ten adults (9 percent) are aware that hospitals must disclose the prices of treatments and procedures on their websites.

The vast majority of adults are unaware or say the hospital price transparency rule does not exist. Specifically, seven in ten adults say they are unsure whether hospitals must disclose the prices of treatments and procedures and one in five say hospitals are not required to disclosing the pricing information.

Awareness was even low among individuals with chronic conditions who are more likely to need hospital care and benefit from lower-priced services, researchers stated.

The hospital price transparency rule from HHS went into effect on January 1, 2021. The rule requires most hospitals to post their standard charges in a machine-readable format prominently on their public-facing websites. Standard charges include gross charges, discounted cash prices, payer-specific negotiated charges, and de-identified minimum and maximum negotiated charges for all items and services provided by the hospital.

The rule also requires hospitals to publish a consumer-friendly list of at least 300 shoppable services, which are generally services that consumers can schedule in advance. This list must contain plain language descriptions of the services, all standard charges, and any ancillary services that get grouped with the primary service.

HHS designed the requirements to shed light on hospital prices in hopes it would reduce rising healthcare costs.

“Kept secret, these prices are simply dollar amounts on a ledger; disclosed, they deliver fuel to the engines of competition among hospitals and insurers,” former CMS Administrator Seema Verma said when the final rule dropped in 2019.

However, almost two years since the rule was finalized and six months into its effectiveness and consumers are still not aware of the requirements nor are they shopping for healthcare services.

The poll found 85 percent of adults said they or a family member had not gone online to research the price of a treatment at a hospital.

Younger adults (ages 18 to 29 and those between 30 and 49 years old) were more likely to report having researched hospital prices online or to have had a family member who did. However, percentages were still low at 23 percent and 16 percent, respectively, compared to 10 percent of those 50 to 64 years old and 9 percent of those 65 years or older.

Similarly, adults with higher incomes of $40,000 and over also were also more likely to say they or a family member researched hospital prices online. Again, the percentages were low at 19 percent among those making $40,000 to $89,999 and 17 percent among those making $90,000 or more. Just 11 percent of adults earning less than $40,000 said they or a family member researched hospital prices online.

Notably, adults who said they looked up hospital prices were no more likely to be aware of the hospital price transparency rule than those who reported not searching. Researchers reported, “In fact, adults who did search for hospital prices were somewhat more likely to incorrectly say that there is no federal requirement (33%) than those who did not search for hospital prices (20%).”

Low consumer awareness of the hospital price transparency rule comes at the same time as low compliance among hospitals. Recent research revealed that 86 of 100 randomly selected hospitals were non-compliant with at least one major requirement of the rule three months after it went into effect.

The study’s findings were consistent with a previous report from the Peterson-KFF Health System Tracker that also found inconsistent compliance with the hospital price transparency rule.

“Even if people search for prices on hospital websites, they may not find prices,” researchers said in the poll. “Moreover, some hospitals have taken measures to make it harder for patients to search for prices.”

Low consumer awareness and inconsistent compliance with the hospital price transparency rule may pose a problem for policymakers who intend for the rule to lower healthcare costs.

“Price transparency may help some patients seek lower-priced care for non-emergency medical treatment and incur fewer costs, but the available pricing information has to be accessible and useful for that to happen, and patients would first need to be aware that they can find the price of care online. With only one in ten adults aware of the federal requirement for hospitals to publicly post prices for services, the potential for price transparency efforts to reduce costs remains a question,” researchers concluded.