Reducing America’s outrageous health care costs is a top bipartisan priority of this Congress.
The Patients Deserve Price Tags Act, a new bipartisan bill I introduced with Sen. John Hickenlooper (D-Colo.), can reverse runaway health expenditures that are burdening Americans of all backgrounds by requiring actual prices throughout the health care system.
Americans now spend approximately $5 trillion a year, nearly 20% of GDP, on health care. That’s more than twice as much as in 2000, adjusted for inflation. These costs have put 100 million people in medical debt.
The lack of price transparency is a major reason for this health care hyperinflation. For too long, powerful hospitals, health insurance companies, and industry middlemen have hidden prices from Americans so they can profiteer. Almost all Americans have a health care billing horror story, such as $2,400 for blood tests, $8,400 for a breast biopsy, and $660 for a five-minute telehealth appointment.
By requiring with upfront prices, including discounted cash and negotiated insurance rates (not unaccountable estimates), our bill empowers consumers to substantially reduce costs through competition and choice. Patients can choose $300 MRIs at standalone imaging centers and $1,000 for colonoscopies at an ambulatory surgical center instead of paying $3,000 and $10,000 for the same services at their local hospital.
The murkiness of drug companies’ price transparency reports
Many working-age Americans receive coverage through their employer or union, and our bill gives these health plans the tools they need to reduce skyrocketing costs that reduce worker wages and take-home pay. According to KFF, the average annual employer-sponsored health premium is $24,000, a 50% increase over the past decade.
A recent JAMA study found that health care premiums as a share of total employee compensation have more than doubled since 1988. Increasing health care costs are a major reason that real worker wages are stagnant.
With upfront prices, employers and unions can design a benefit where workers get the best quality, lowest price care, and share savings in the form of reduced premiums and higher wages. Our bill also gives employers and unions access to claims data, which plan administrators routinely hide, allowing them to spot price gouging and wide price variations.
Our legislation would reveal the inflationary “spread pricing” and kickback schemes among vertically integrated health insurers, third-party administrators, pharmacy benefit managers, and their vendors, so employers and unions can rectify overbilling and design affordable plans.
Returning national health expenditures to worker paychecks and family budgets where they belong will generate an enormous economic stimulus. Economists project that systemwide price transparency will reduce national health expenditures by approximately $1 trillion per year. This estimate tracks a 2019 JAMA study that finds nearly 25% of national health care spending is waste, overcharges, and fraud.
I practiced medicine before joining the Senate, and I saw firsthand that patients routinely couldn’t access the upfront prices they needed before treatment. Physicians want what’s best for their patients, and our bill finally gives them the financial peace of mind they deserve. The bill codifies and strengthens President Trump’s hospital price transparency rule and expands its requirements to ambulatory surgery centers, clinical labs, and imaging centers. It also boosts enforcement, as the current rate of hospital compliance is unacceptable, with a report by PatientRightsAdvocate.org estimating it to be around 21%.
Latest updates to hospital price transparency rules aim to make the data more useful
Price transparency can make health care efficient, as it does in every other sector of the economy. Tech innovators and AI can aggregate price disclosures in consumer-friendly tools that make shopping for care and coverage similar to shopping for any other good or service.
Price transparency is a bipartisan health fix at a time when Americans are seeking real solutions that bridge political divides. According to a recent Marist poll, 94% of Americans support regulations that require disclosure of actual prices in advance of care.
Congress should put aside partisan tensions and do its job to deliver for American patients, workers, and businesses. Passing the Patients Deserve Price Tags Act can restore trust and faith in the American health care system — and in Congress.
Roger Marshall, M.D., is a U.S. senator representing Kansas.