Last week, two U.S. Congressmen from Texas – Rep. Michael Burgess (R) and Gene Green (D) – introduced American Hospital Association (AHA)-supported legislation aimed at making healthcare more affordable by promoting healthcare price transparency.
Their bi-partisan bill, the Health Care Price Transparency Promotion Act of 2012 (H.R. 5800), would require states to have or establish laws requiring hospitals to disclose information on charges for certain inpatient and outpatient services. It would also require health insurers to provide to enrollees upon request a statement of estimated out-of-pocket costs for particular healthcare items and services.
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In addition, the legislation directs the Agency for Healthcare Research and Quality to study the types of healthcare cost information that consumers find useful, and how that information might be distributed in a timely and simple way.
"Patients could review their options with up-front information about the costs of a medical procedure and other expenses in healthcare services," Burgess said in a press release. "A patient should be able to know what they are buying and how much they will pay out-of-pocket. Arming patients with cost information is an important step in improving our country's healthcare system with the focus on the patient."
Representatives Burgess and Green requested a General Accountability Office report, which found that cost information is helpful to patients, who often have difficulty accessing reliable and consistent price information.
Healthcare costs are increasing at an alarming rate. In 2010, total national health expenditures rose over 3.9 percent – just over double the rate of inflation. Total spending was $2.6 trillion in 2010, or $8,327 per person. Total health care spending represented 17.9 percent of the Gross Domestic Product. U.S. healthcare spending is expected to increase at similar levels for the next decade reaching $4.6 trillion in 2020, or 20 percent of GDP.
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"Our current healthcare system needs to be reformed. Unfortunately, with all of the bureaucracy and paperwork, few people including patients and physicians know where money is going. This makes it hard to identify the base problem and begin to help curb increasing healthcare costs," said Green in a press release. "This legislation will be a first step in a long-term solution to clear up the confusion, and will let us move towards affordable, quality healthcare for all Americans."
The American Hospital Association endorses the Burgess-Green legislation, noting evidence of the ongoing success of states and state hospital associations to collect and disseminate hospital pricing information.
"We have consistently supported this legislature. We think it builds on the good work our hospitals are already doing on the state level," said Megan Cundari, senior associate director for federal relations at AHA. "We think it'll give consumers a better sense of what their costs are. People are becoming more and more responsible for their healthcare bills, so it's important that this information is available."
"Consumers deserve meaningful information about the price of their hospital care, and hospital leaders are as committed to sharing this information as they are to sharing information about quality. The AHA believes that states, working with their state hospital associations, are the best source for sharing meaningful pricing data," the association told Burgess and Green in letters of support for the legislation."In fact, 34 states already require hospitals to report information on hospital charges or payment rates and make that data available to the public; an additional seven states have voluntary efforts. Your legislation builds on this existing structure, and also requires insurers to participate in the disclosure process by providing information on estimated out-of-pocket costs for healthcare services."
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