ON THE AGENDA | MARCH 3RD, 2016 | DAVID SCHLEIFER, PH.D. and Allison Rizzolo

A Setback for Understanding Health Care Costs in the U.S.

The Supreme Court's decision barring states from collecting health care price information runs counter to the beliefs of the majority of Americans.

A Supreme Court decision earlier this week was a setback for advocates of greater price transparency in health care. In a 6-2 decision in the case Gobeille v. Liberty Mutual, the Court ruled that state officials cannot require certain insurers to submit information showing how much they pay for health care services to a database.

This move greatly complicates efforts to understand health care price variation and trends in how much doctors and hospitals get paid. It also affects public access to robust information about health care prices and value.

Some advocates of price transparency argue that the public, if armed with information about health care price and quality, will shop for better quality care, driving down the cost of health care generally. While we are cautious about overstating the potential scale and impact of consumer shopping, the courtís decision leaves us disappointed.

Last year, we dug deep into public behaviors and attitudes related to health care prices with funding from the Robert Wood Johnson Foundation. Our findings suggest that the Supreme Courtís decision runs counter to the beliefs of the majority of Americans, 69 percent of whom say insurers should be required to make public how much they pay doctors.

We found that most Americans have at least tried to find price information before getting medical care. Even among people who have never sought price information, 55 percent say they would like to know prices before getting their care, 41 percent said they would choose a less expensive doctor if they had price information and 49 percent said they donít know how to find price information. As we wrote last week, new research from the Pioneer Institute underscores the difficulty of getting price information in a timely manner.

We also found that only about one in five Americans has compared prices across multiple providers. This is not surprising, since despite great reporting about the extent of price variation, most Americans are not aware that providersí prices vary.

If health care leaders and policymakers want to help Americans make high-value decisions based on quality and price information, and if they want to gain public support for efforts to reduce price variation, they must help people understand that prices (and quality) vary. When we actually told our survey respondents that prices for medical care can vary a lot, 82 percent said they were concerned about price variation.

Of course, the Court's decision doesn't put an end to price transparency. While the Supreme Courtís decision prohibits states from requiring certain insurers to submit their price data, it explicitly mentions that the federal government could require them to do so. And many insurance companies, hospital groups, private companies and non-profit organizations voluntarily make price data available. However, this data isn't meaningful or helpful for everyone.

The Court's decision may hamper the efforts of policymakers and insurers who use price data to understand and negotiate over the price of health care in their states. The decision may also affect the efforts of those working to understand the big-picture story of health care price and quality in the U.S. Researchers will have to rely on data that will be less robust, on voluntarily submitted data and on data from Medicare and Medicaid. While researchers have generated important findings from these datasets, incomplete data provides an incomplete picture of health care price and quality.

Currently, we are working on new research with funding from the Robert Wood Johnson Foundation to find out how Americans who have sought care for pregnancy and childbirth, joint replacement surgery and type 2 diabetes think about and use information about quality as well as price. For people in these serious health care situations, the courtís decision could make price information even more opaque.


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