U.S. House passes landmark health care price transparency bill

On Monday, the U.S. House of Representatives passed a landmark bill to ensure that patients get access to transparent pricing information from providers and health plans. The bill — the Lower Costs, More Transparency Act — passed by a bipartisan vote of 320 to 71.

Core provisions in the bill codify two historic health care price transparency rules implemented under the Trump administration. These rules set down strong requirements for both hospitals and health plans to publicly disclose health care prices to patients upfront before they receive care. Other key provisions in the bill expand price transparency to pharmacy benefit managers and other care settings, including surgery centers, diagnostic labs, and imaging facilities.

While the Biden administration has pared back many Trump-era rules, they have supported and taken steps to strengthen these health care price transparency rules. However, changes to federal law are still needed to ensure these rules persist and to expand price transparency beyond what the current law has allowed the Trump and Biden administrations to require.

“For a more secure and healthier future,” House Energy and Commerce Committee Chair Cathy McMorris Rodgers urged, “people need more certainty and stability.” Her statement underscores the need to cement these federal rules in statute. This bill, which she led to a successful bipartisan vote, delivers that certainty.

Why is price transparency so important?

Rising health care costs are a top concern across America and price transparency offers the best hope to control costs without compromising quality. Ultimately, price transparency is the prerequisite for using market forces to push providers and health plans to deliver better, more affordable care.

Two paths to lower health care costs

Looking to the future, there are two paths America can follow to address the rising cost of health care. The first path relies on government regulations to ration care and impose price controls. That’s the path nearly every other nation follows. Unfortunately, this path leads to inevitable tradeoffs. Other nations achieve lower costs by limiting access to new treatments, delaying appointments, and reducing incentives to investment in medical research. In short, quality suffers.

The second path relies on market forces to drive competition among providers and health plans. In every other industry, competition creates the incentives to innovate and improve the products and services people depend on in their day-to-day lives. We regularly see how this path does not force people to accept harmful tradeoffs.

Competition can work in health care too

People say health care is different, but the same competitive forces that drive improvements in every other industry can also work in health care.  Price transparency is a key building block. It unleashes key information consumers need to pressure health plans and providers to compete to innovate better, more affordable ways to deliver coverage and care.

American Experiment’s top health care priority

Knowing price transparency provides a key building block to a competitive health care system, price transparency has become American Experiment’s top health care priority. Over the past two years we’ve published important policy reports with key recommendations to increase price transparency for both state and federal lawmakers.

Last September, I wrote a report focused on the legislation currently moving through Congress which focused on explaining the principles that guided the Trump administration’s historic price transparency rulemaking. This report drew on my firsthand experience helping to lead the development and drafting of the health plan price transparency as a Senior Advisor to the Administrator of the Centers for Medicare & Medicaid Services in the Trump administration.

The House bill follows the same principles that guided the current transparency rules and takes further strides toward even greater transparency. Now it’s up to the Senate to complete this work and deliver an equally strong, bipartisan bill to President Biden’s desk.