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United States Government Accountability Office: 
GAO: 

Health Care Price Transparency: 

Meaningful Price Information Is Difficult for Consumers to Obtain 
Prior to Receiving Care: 

Health Care Price Transparency: 

Report to Congressional Requesters: 

September 2011: 

GAO-11-791: 

GAO Highlights: 

Highlights of GAO-11-791, a report to congressional requesters. 

Why GAO Did This Study: 

In recent years, consumers have become responsible for a growing 
proportion of the costs of their health care. Health care price 
information that is transparent—available before consumers receive 
care—may help consumers anticipate these costs. Research identifies 
meaningful types of health care price information, such as estimates 
of what the complete cost will be to the consumer for a service. GAO 
defines an estimate of a consumer’s complete health care cost as price 
information on a service that identifies a consumer’s out-of-pocket 
cost, including any negotiated discounts, and all costs associated 
with a service or services. GAO examined (1) how various factors 
affect the availability of health care price information for consumers 
and (2) the information selected public and private health care price 
transparency initiatives make available to consumers. To do this work, 
GAO reviewed price transparency literature; interviewed experts; and 
examined a total of eight selected federal, state, and private 
insurance company health care price transparency initiatives. In 
addition, GAO anonymously contacted providers and requested the price 
of selected services to gain a consumer’s perspective. 

What GAO Found: 

Several health care and legal factors may make it difficult for 
consumers to obtain price information for the health care services 
they receive, particularly estimates of what their complete costs will 
be. The health care factors include the difficulty of predicting 
health care services in advance, billing from multiple providers, and 
the variety of insurance benefit structures. For example, when GAO 
contacted physicians’ offices to obtain information on the price of a 
diabetes screening, several representatives said the patient needs to 
be seen by a physician before the physician could determine which 
screening tests the patient would need. According to provider 
association officials, consumers may have difficulty obtaining 
complete cost estimates from providers because providers have to know 
the status of insured consumers’ cost sharing under health benefit 
plans, such as how much consumers have spent towards their deductible 
at any given time. In addition to the health care factors, researchers 
and officials identified several legal factors that may prevent the 
disclosure of negotiated rates between insurers and providers, which 
may be used to estimate consumers’ complete costs. For example, 
several insurance company officials GAO interviewed said that 
contractual obligations with providers may prohibit the sharing of 
negotiated rates with the insurer’s members on their price 
transparency initiatives’ websites. Similarly, some officials and 
researchers told GAO that providers and insurers may be concerned with 
sharing negotiated rates due to the proprietary nature of the 
information and because of antitrust law concerns. 

The eight public and private price transparency initiatives GAO 
examined, selected in part because they provide price information on a 
specific health care service by provider, vary in the price 
information they make available to consumers. These initiatives 
include one administered by HHS, which is also expected to expand its 
price transparency efforts in the future. The price information made 
available by the selected initiatives ranges from hospitals’ billed 
charges, which are the amounts hospitals bill for services before any 
discounts are applied, to prices based on insurance companies’ 
contractually negotiated rates with providers, to prices based on 
claims data that report payments made to a provider for that service. 
The price information varies, in large part, due to limits reported by 
the initiatives in their access or authority to collect certain price 
data. In addition to price information, most of the selected 
initiatives also provide a variety of nonprice information, such as 
quality data on providers, for consumers to consider along with price 
when making decisions about a provider. Lastly, GAO found that two of 
the selected initiatives—-one publicly available with information only 
for a particular state and one available to members of a health 
insurance plan-—are able to provide an estimate of a consumer’s 
complete cost. The two initiatives are able to provide this 
information in part because of the type of data to which they have 
access––claims data and negotiated rates, respectively. For the 
remaining initiatives, they either do not use more meaningful price 
data or are constrained by other factors, including concerns about 
disclosing what providers may consider proprietary information. As HHS 
continues and expands its price transparency efforts, it has 
opportunities to promote more complete cost estimates for consumers. 

What GAO Recommends: 

GAO recommends that the Department of Health and Human Services (HHS) 
determine the feasibility of making estimates of complete costs of 
health care services available to consumers, and, as appropriate, 
identify next steps. HHS reviewed a draft of this report and provided 
technical comments, which GAO incorporated as appropriate. 

View [hyperlink, http://www.gao.gov/products/GAO-11-791]. For more 
information, contact Linda T. Kohn at (202) 512-7114 or kohnl@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Various Health Care and Legal Factors Make Estimates of Consumers' 
Complete Costs Difficult to Obtain: 

Selected Initiatives Vary in the Information They Make Available, and 
Few Initiatives Provide Estimates of Consumers' Complete Costs: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Methodology and Results of Contacting Selected Providers 
for Price Information: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Selected Public and Private Sector Price Transparency 
Initiatives: 

Table 2: Types of Health Care Services and Price Information Made 
Available by Selected Price Transparency Initiatives, 2011: 

Table 3: Quality and Volume Information Provided by Selected Price 
Transparency Initiatives: 

Table 4: Extent to Which Selected Price Transparency Initiatives 
Provide Price Information That Reflects Estimates of Consumers' 
Complete Costs: 

Table 5: Results of Contacting Hospitals for the Price of a Full Knee 
Replacement on Behalf of a Patient with Medicare and without Health 
Insurance from Those Who Responded: 

Table 6: Results of Contacting Physicians for the Price of a Diabetes 
Screening on Behalf of a Patient with Medicare and without Health 
Insurance from Those Who Responded: 

Abbreviations: 

AHRQ: Agency for Healthcare Research and Quality: 

APCD: All Payer Claims Database: 

CMS: Centers for Medicare and Medicaid Services: 

CPT: Current Procedural Terminology: 

DOJ: Department of Justice: 

FEHB: Federal Employee Health Benefits: 

FTC: Federal Trade Commission: 

HHS: Department of Health and Human Services: 

OPM: Office of Personnel Management: 

PPACA: Patient Protection and Affordable Care Act: 

WHA: Wisconsin Hospital Association: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 23, 2011: 

Congressional Requesters: 

Health care spending increased in recent years by an average of nearly 
7 percent per year, from $1.4 trillion in 2000 to $2.5 trillion in 
2009.[Footnote 1] Consumers are becoming responsible for a growing 
proportion of this spending, such as in the case of those with 
insurance who face increased use of high-deductible health plans and 
other forms of cost sharing.[Footnote 2] For example, from 2006 to 
2010, the percentage of covered workers enrolled in high-deductible 
health plans increased from 4 percent to 13 percent, and the 
percentage of covered workers with a deductible of $1,000 or more for 
single coverage almost tripled, from 10 percent to 27 percent. 
[Footnote 3] Depending upon the insurance plan, insured consumers are 
generally responsible for the cost of health care services until their 
deductible has been met. Even after reaching their deductibles, 
consumers may face significant out-of-pocket costs, such as fees 
associated with care received from a physician, laboratory, or 
hospital that are outside of an insurance network and may also bill 
for their services separately. Consumers without health insurance are 
also responsible for the cost of their care, and without a third party 
to negotiate on their behalf these consumers are generally responsible 
for paying what the provider charges, minus any agreed-to discounts, 
rather than discounted rates negotiated between the insurer and 
provider. 

Consumers generally learn of their health care costs after receiving 
care, such as when they receive a bill from their provider or an 
explanation of benefits from their insurer. In contrast, information 
on health care prices is considered transparent when this information 
is available to consumers before they receive health care services. 
[Footnote 4] Transparent health care price information may help 
consumers anticipate their health care costs and reduce the 
possibility of unexpected expenses. When accompanied by information on 
the quality of care, transparent price information may also help 
consumers make more informed choices about their care. Specifically, 
research suggests that health care price transparency is most relevant 
for consumers who are having services that can be planned for in 
advance.[Footnote 5] Researchers have identified characteristics of 
the most meaningful types of transparent price information, such as 
information that includes estimates of what the complete cost will be 
to a consumer for a service or services.[Footnote 6] Based on this 
research, we define an estimate of a consumer's complete health care 
cost as price information on a health care service or services that 
(1) reflects any negotiated discounts; (2) is inclusive of all costs 
to the consumer associated with a service or services, including 
hospital, physician, and lab fees; and (3) identifies a consumer's out-
of-pocket cost. 

In recent years various federal, state, and private sector efforts 
have been initiated to make health care price information available to 
consumers. Federal efforts include various price transparency 
initiatives administered by the Department of Health and Human 
Services (HHS) and Centers for Medicare and Medicaid Services (CMS) 
that provide price information on health care services, prescription 
drugs, and health insurance plans. For example, HHS provides price 
information on insurance plans, such as the amount of cost-sharing and 
premium rates for specific plans, through its healthcare.gov website. 
In addition, CMS's Medicare Plan Finder provides information on 
prescription drug prices, and CMS's Health Care Consumer Initiatives 
provide information on the price Medicare pays for common health care 
services by various geographic areas.[Footnote 7] At the state level, 
the National Conference of State Legislatures reports that at least 30 
states have proposed or enacted some form of price transparency 
legislation,[Footnote 8] and a report by America's Health Insurance 
Plans, an industry group, states that at least 25 states have price 
transparency initiatives that provide publicly accessible websites 
with health care price information.[Footnote 9] Additionally, with the 
enactment of the Patient Protection and Affordable Care Act (PPACA) in 
2010, hospitals operating in the United States are required annually 
to make public and update a list of their hospital's standard charges 
for items and services provided by the hospital.[Footnote 10] 

In addition to existing price transparency initiatives, more efforts 
are planned that may increase the amount of health care price 
information available to consumers. For example, under PPACA, Health 
Insurance Exchanges for each state must be developed by January 1, 
2014, to facilitate the purchase of qualified health plans and assist 
small employers in facilitating enrollment of their employees in these 
health plans.[Footnote 11] The Exchanges must require participating 
health plans to permit individuals to learn through a website or other 
means the amount of cost sharing, such as deductibles and copayments, 
for which they would be responsible when receiving specific health 
care services if covered under each company's insurance plan.[Footnote 
12] 

In light of consumers' increased responsibility for paying the costs 
of their health care and efforts aimed at making price information 
transparent, you asked us to study the extent to which health care 
price information actually is available to consumers and other 
interested parties. This report describes (1) how various factors 
affect the availability of health care price information for consumers 
and (2) the information selected public and private health care price 
transparency initiatives make available to consumers and other 
interested parties. 

To describe how various factors affect the availability of health care 
price information for consumers, we reviewed relevant literature, such 
as reports from the Congressional Budget Office and the Center for 
Studying Health System Change.[Footnote 13] In addition to reviewing 
relevant literature, we interviewed researchers who have expertise in 
health care price transparency;[Footnote 14] a selection of hospital, 
physician, and insurer associations; officials from two of the largest 
insurance companies by enrollment; and officials from the selected 
public and private price transparency initiatives in our review (see 
below for information on how we selected these initiatives). In our 
review of relevant literature and interviews with officials, we 
focused on identifying factors that affect the availability of health 
care price information, including estimates of complete costs to 
consumers. To provide illustrative examples of how the factors we 
identified may affect the availability of health care price 
information, including estimates of consumers' complete costs, and to 
gain the perspective of consumers on this issue, we anonymously 
contacted representatives from 39 providers--19 hospitals and 20 
primary care physician offices. From these providers we requested 
price information on two selected health care services: full knee 
replacement surgery and diabetes screening. We randomly selected these 
hospitals and physicians from a health care market in Colorado, which 
requires certain providers to make price information on selected 
services available to consumers upon request.[Footnote 15] We did not 
assess the accuracy of the price information provided by these 
selected providers, nor did we evaluate the effectiveness of 
Colorado's law. (See appendix I for more information about our 
methodology for selecting and contacting hospitals and physicians and 
the information we obtained.) 

To describe the information selected public and private price 
transparency initiatives make available to consumers and other 
interested parties, we judgmentally selected a total of eight price 
transparency initiatives that met our definition of a price 
transparency initiative--initiatives that make provider-specific price 
information on a specific health care service available to consumers 
and other interested parties.[Footnote 16] Specifically, our eight 
selected initiatives include: one federal price transparency 
initiative, which was the only federal price transparency initiative 
we identified that met our definition;[Footnote 17] five state 
initiatives,[Footnote 18] which we selected based on input from 
researchers with subject-matter expertise and on the initiatives' 
geographic variation; and two private initiatives, which we selected 
from among those provided by the top 10 insurance companies by 
enrollment in 2009 and based upon input from researchers with subject- 
matter expertise.[Footnote 19] See table 1 for a summary of the eight 
public and private initiatives that we selected. 

Table 1: Selected Public and Private Sector Price Transparency 
Initiatives: 

Type of initiative: Public (federal); 
Administrating entity and name of price transparency initiative: 
Centers for Medicare and Medicaid Services Hospital Compare. 

Type of initiative: Public (state): 
Administrating entity and name of price transparency initiative: 
California Common Surgeries and Charges Comparison. 

Type of initiative: Public (state): 
Administrating entity and name of price transparency initiative: 
Florida Health Finder. 

Type of initiative: Public (state): 
Administrating entity and name of price transparency initiative: 
Massachusetts MyHealthCareOptions. 

Type of initiative: Public (state): 
Administrating entity and name of price transparency initiative: New 
Hampshire HealthCost. 

Type of initiative: Public (state): 
Administrating entity and name of price transparency initiative: 
Wisconsin Hospital Association PricePoint[A]. 

Type of initiative: Private; 
Administrating entity and name of price transparency initiative: Aetna 
Member Payment Estimator. 

Type of initiative: Private; 
Administrating entity and name of price transparency initiative: 
Anthem Care Comparison. 

Source: GAO. 

[A] In some cases, a statewide initiative is administered by a private 
third party entity, such as a state hospital association, but the 
state has a role in its initiation, regulation, or ongoing development 
of the price transparency initiative. In these cases, we have 
classified these as "public (state) initiatives" for the purpose of 
our review. 

[End of table] 

For each of the eight initiatives we selected, we interviewed 
officials and reviewed documentation to identify the types of health 
care price and other information these initiatives make available--
including the extent to which the initiatives make available price 
information that includes estimates of consumers' complete costs for 
health care services. As part of this documentation review, we also 
reviewed the information available to consumers on the selected 
initiatives' websites. 

We conducted this performance audit from November 2010 to September 
2011, in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

Research indicates that making price and other contextual information 
available is important for consumers to be able to anticipate the 
costs of their care and also to make informed health care decisions. 
In recent years, many public and private price transparency 
initiatives have been initiated to provide consumers with information 
about the price of their health care services. 

Health Care Pricing: 

Determining the price of a health care service often involves 
coordination between providers, insurers, and consumers. Providers, 
such as hospitals or physicians, charge consumers fees for the 
services they receive, which are known as billed charges. Payers, such 
as insurance companies, often have contractual agreements with 
providers under which the payers negotiate lower payment rates for a 
service on behalf of their members or beneficiaries. These rates are 
known as negotiated rates. In the case of Medicare specifically, CMS 
sets the program's payment rates for providers based on a formula that 
includes several factors, such as geographic location. 

For consumers with health insurance, their out-of-pocket costs for a 
health care service is determined by the amount of cost sharing 
specified in the benefits of their health insurance plan for services 
covered by the insurer. For consumers who lack health insurance, they 
are often billed for the full amount charged by the provider, such as 
a billed charge from a hospital. The estimated out-of-pocket cost for 
an uninsured consumer will typically be the billed charge for a health 
care service minus any charity care or discounts that may be applied 
by the provider.[Footnote 20] 

Health Care Services and Episodes of Care: 

Providers and payers often price health care services using the 
various codes used by health care professionals. For example, 
physicians may bill for their services based on Current Procedural 
Terminology (CPT) codes developed by the American Medical Association. 
Individual health care services, such as those referred to by 
individual CPT codes, can be grouped or bundled together into an 
episode of care, which refers to a group of health care services 
associated with a patient's condition over a defined period of time. 
An episode of care for a knee replacement, for example, includes 
multiple services such as those provided during the actual surgery, as 
well as preoperation and postoperation consultations. The episode of 
care would also include services provided by various providers who 
typically bill separately, such as a hospital, surgeon, and 
anesthesiologist. PPACA requires HHS to develop a national pilot 
program, which may include bundled payments for episodes of care 
surrounding certain hospitalizations, in order to improve the 
coordination, quality, and efficiency of health care services. 
[Footnote 21] 

Importance of Quality and Other Contextual Information: 

According to researchers, it is important for consumers to have access 
to quality of care and other information to provide context to the 
price information and help consumers in their decision making. For 
example, according to the Agency for Healthcare Research and Quality 
(AHRQ),[Footnote 22] appropriate quality of care information for 
consumers may include the mortality rates for a specific procedure, 
the percentage of patients with surgical complications or 
postoperative infections, or the average length of stay, among other 
measures.[Footnote 23] By combining quality and price information, 
some researchers argue that consumers can then use this information to 
choose providers with the highest quality and the lowest price--
thereby obtaining the greatest value when purchasing care.[Footnote 
24] Furthermore, some research suggests that information on volume 
(the number of services performed) may be used as an indication of 
quality for certain procedures.[Footnote 25] This assumes a positive 
association between the number of times a provider administers a 
service and the quality of the service provided. Information about 
previous patients' satisfaction with a provider's service can also 
help consumers make decisions about their health care. 

Development and Use of Public and Private Price Transparency 
Initiatives: 

Public price transparency initiatives often began in response to laws 
or orders requiring an agency or organization to make price 
information available to consumers, while private sector initiatives 
started primarily through voluntary efforts. For example, in response 
to a 2006 federal executive order to promote quality and efficiency in 
federal health care programs, federal agencies that administer or 
sponsor a health care program were directed, among other things, to 
make available to enrollees the prices paid for health care services. 
[Footnote 26] In response, agencies including HHS (including its 
component agencies such as CMS and AHRQ) and OPM began to make health 
care price information available. Similarly, over 30 states have 
proposed or enacted some type of price transparency legislation, 
though what is actually required varies greatly across the states. 
[Footnote 27] For example, some states, such as Colorado and South 
Dakota, require hospitals to disclose, upon request, the expected or 
average price for the treatment requested.[Footnote 28] In contrast, 
some states, such as Maine and Minnesota, require that certain health 
care price information be made publicly available through an Internet 
website.[Footnote 29] While many public price transparency initiatives 
began as a result of legislation, private sector price transparency 
initiatives, such as insurance company initiatives, were established 
voluntarily for various reasons. For example, insurance officials that 
we spoke with said their price transparency initiatives started for 
reasons such as increased interest from employers to curb costs, to 
gain a competitive edge over other insurance companies without price 
transparency initiatives, and to help their members become better 
health care consumers. Other private price transparency initiatives, 
such as Health Care Blue Book and PriceDoc, were started to help 
consumers find and negotiate fair prices for health care services. 
[Footnote 30] 

Though both public and private price transparency initiatives have 
become more widespread in the last 5 years, some research suggests 
that even if consumers have access to price information, such as price 
information made available by these initiatives, they may not use such 
information in their decision making.[Footnote 31] For example, 
insured consumers may be less sensitive to prices, since the financial 
costs of selecting one provider over another may be borne by the 
insurer, not the consumer. Despite these concerns, some research 
indicates that consumers want access to price information before they 
receive health care services and have tried to use price information 
to some degree to inform their decision making.[Footnote 32] 
Furthermore, research states that incentives may be helpful to further 
consumers' use of transparent price information. Specifically, 
financial incentives may include insurers providing lower out-of-
pocket costs for their members if they select low-price, high-quality 
providers.[Footnote 33] 

Various Health Care and Legal Factors Make Estimates of Consumers' 
Complete Costs Difficult to Obtain: 

Several health care and legal factors can make it difficult for 
consumers to obtain price information--in particular, estimates of 
their complete costs--for health care services before the services are 
provided. The health care factors include the difficulty of predicting 
in advance all the services that will be provided for an episode of 
care and billing services from multiple providers separately. In 
addition, according to researchers and officials we interviewed, legal 
factors, such as contractual obligations, may prevent insurers and 
providers from making available their negotiated rates, which can be 
used to estimate consumers' complete costs. 

Various Factors, Such as the Difficulty of Predicting Health Care 
Services in Advance, Billing from Multiple Providers, and the Variety 
of Insurance Benefit Structures, Can Make Estimates of Consumers' 
Complete Costs Difficult to Obtain: 

One factor that may make it difficult for consumers to obtain 
estimates of their complete costs for a health care service is that it 
may be difficult for providers to predict which services a patient 
will need in advance. Specifically, physicians often do not decide 
what services their patients will need until after examining them. 
Researchers and officials we spoke with commented that health care 
services are not standardized across all patients because of each 
patient's unique circumstances, which influence the specific services 
a physician would recommend. For example, when we anonymously 
contacted 20 physicians' offices to obtain information on the price of 
a diabetes screening, several representatives said the patient needs 
to be seen by a physician before the physician would know what tests 
the patient would need.[Footnote 34] 

In addition, even after identifying what health care service or 
services a patient may need, additional aspects associated with the 
delivery of a service may be difficult to predict in advance, such as 
the length of time a patient stays in a hospital. This factor can make 
it challenging for providers to estimate consumers' complete costs in 
advance. For example, when we anonymously contacted 19 hospitals to 
obtain information on the price of a full knee replacement surgery, 
several hospital representatives quoted a range of prices, from about 
$33,000 to about $101,000. The representatives explained that the 
price for the procedure could vary based on a variety of factors, such 
as the time the patient will be in the operating room and the type of 
anesthetic the patient may receive, and some noted that they would 
need to know this information if they were to provide a more specific 
price estimate. 

Several hospital and physician office representatives we spoke with 
recommended that insured consumers contact their insurer for complete 
cost information; however, the inability to predict which health care 
services will be needed in advance also makes it challenging for 
insurers to provide complete cost estimates. Officials from an insurer 
association commented that, if asked by their members for cost 
estimates, insurance company representatives may require more 
information--such as the CPT codes for the services a patient will 
receive--before the insurers can provide a cost estimate. However, in 
the instances when providers cannot predict in advance the codes for 
which they will bill, consumers will be unable to provide the 
respective codes to insurers and obtain complete cost estimates from 
them. 

Another factor is that many services included in one episode of care 
may be provided by multiple providers, such as a hospital and surgeon, 
who bill for their services separately. This makes obtaining complete 
cost information challenging because, in these cases, consumers may 
have to contact multiple providers to obtain estimates of their 
complete costs. Many providers can only give price estimates in 
advance for the services that they provide, and are often unaware of 
the prices for services performed by other providers. For example, 
when we contacted hospitals anonymously for the price of a full knee 
replacement, none were able to provide information on the complete 
cost to consumers for this service. The hospital representatives we 
contacted who could provide price information were only able to 
provide us with the hospital's estimated charges or a Medicare 
deductible amount for the service and could not provide us with the 
charges associated with the other providers involved in the service, 
such as a surgeon or anesthesiologist. Charges from these providers 
are typically billed separately from the hospital's charges, even 
though some of these services are provided in the hospital. Similarly, 
when we called physicians' offices to obtain information on the price 
of a diabetes screening, most representatives could not tell us how 
much the associated lab fees would cost and some noted that this was 
because the lab fees are billed separately. Several hospital and 
physician office representatives we spoke with suggested we contact 
the other providers, such as a surgeon or lab, separately in order to 
obtain information on the price of these services. However, officials 
from a provider association questioned how consumers would even know 
which providers to contact to get price information if the consumers 
do not know all of the different providers who are involved in an 
episode of care in advance. 

Lastly, consumers may have difficulty obtaining complete cost 
estimates from providers because providers are often unaware of these 
costs due to the variety of insured consumers' health benefit 
structures. For example, according to officials from a provider 
association, physicians may have difficulty accessing insured 
consumers' health benefit plan information, and thus may not be able 
to provide estimates of consumers' out-of-pocket costs under their 
specific benefit plans. For example, officials stated that for 
physicians to inform a patient about the price of a health care 
service in advance they have to know the status of consumers' cost 
sharing under their specific health benefit plan, such as how much 
consumers have spent in out-of-pocket costs or towards their 
deductible at any given time. Without this information, physicians may 
have difficulty providing accurate out-of-pocket estimates for insured 
consumers. In addition, different consumers may have out-of-pocket 
costs that vary within the same benefit plan, which adds to the 
variety of potential costs a patient could have, and creates 
complexity for providers in providing complete cost estimates to 
consumers. 

Officials from provider associations commented that insurers should be 
responsible for providing complete cost information to their insured 
customers because insurers can provide price information specific to 
insured consumers' situations. However, insurers may also have 
difficulty estimating consumers' complete costs. Specifically, 
according to a 2007 report by the Healthcare Financial Management 
Association, many insurers do not have data systems that are capable 
of calculating real-time estimates of complete costs for their members 
prior to receiving a service.[Footnote 35] As a result, insurers may 
have difficulty maintaining real-time data on how much their members 
have paid towards their deductibles, which could affect an estimate of 
the complete cost. 

Additionally, according to officials from an insurance company, it is 
difficult for insurers to estimate complete costs when insured 
customers receive services from providers that are outside of the 
insurer's network. These estimates may be difficult to provide because 
insurers have not negotiated a rate with providers out of the 
insurer's network, and thus may be unaware of these providers' billed 
charges before a service is given. Officials from an insurance company 
explained that this concern is especially a problem for their members 
who go to an in-network hospital and are seen by a nonparticipating 
physician within that hospital during their visit. The officials 
explained that this can occur without the patient's knowledge because 
patients often do not choose certain providers, such as radiologists 
or anesthesiologists, and consumers may be faced with significant out-
of-pocket costs. 

Researchers and Officials Identify Legal Factors That May Prevent the 
Disclosure of Negotiated Rates, Which Can Be Used to Estimate 
Consumers' Complete Costs: 

Researchers and officials we interviewed identified several legal 
factors that may prevent providers and insurers from sharing 
negotiated rates, which can be used to estimate consumers' complete 
costs. First, some officials stated that some contractual obligations 
between insurers and providers prohibit the disclosure of negotiated 
rates with anyone outside of the contracting entities, such as an 
insurer's members.[Footnote 36] Specifically, most officials 
representing insurance companies have reported that some hospitals 
have included contractual obligations in their agreements with 
insurers that restrict insurers from disclosing negotiated rates to 
their members. For example, some insurance company officials we 
interviewed told us that these contractual obligations prohibited the 
sharing of specific information on negotiated rates between providers 
and insurers on their price transparency initiatives' websites. 
Officials from one insurance company said that they generally accept 
these contractual obligations, particularly in the case of hospitals 
that have significant market leverage, because they do not want to 
exclude these hospitals from their networks.[Footnote 37] 

Second, some of the officials and researchers we spoke with reported 
that providers and insurers may be concerned with sharing their 
negotiated rates, considered proprietary information, which may be 
protected by law from unauthorized disclosure. Some officials and 
researchers we spoke with suggest that without these rates, it could 
be more difficult for consumers to obtain complete cost estimates. 
According to officials from an insurer association, proprietary 
information such as negotiated rates may be prohibited from being 
shared under the Uniform Trade Secrets Act, which many states have 
adopted to protect the competitive advantage of the entities involved. 
[Footnote 38] These laws are designed to protect against the wrongful 
disclosure or wrongful appropriation of trade secrets, which may 
include negotiated rates. For example, if a hospital was aware that 
another hospital negotiated a higher rate with the same insurance 
company, then the lower-priced hospital could seek out higher 
negotiated rates which may eliminate the first hospital's competitive 
advantage. Conversely, if officials from an insurance company were 
aware that another insurer paid the same hospital a lower rate for a 
given service, the higher-paying insurer may try to negotiate lower 
payment rates with that hospital. 

Lastly, some researchers and officials noted that antitrust law 
concerns may discourage providers and insurers from making negotiated 
rates public.[Footnote 39] For example, some insurance company 
officials we spoke with expressed concerns that sharing negotiated 
rates publicly would give multiple competing providers access to each 
other's rates, and therefore could lead to collusion in price 
negotiations between providers and insurers.[Footnote 40] According to 
the Federal Trade Commission (FTC) and the Department of Justice 
(DOJ)--the principal federal agencies enforcing the antitrust laws--
antitrust laws aim to protect and promote competition by preventing 
businesses from acting together in ways that can limit competition. 
Joint guidance from FTC and DOJ indicates that without appropriate 
safeguards, exchanges of price information--which insurance company 
officials told us could include negotiated rates--among competing 
providers may present the risk that competing providers communicate 
with each other regarding a mutually acceptable level of prices for 
health care services or compensation for employees.[Footnote 41] 

Although some officials and researchers noted that antitrust laws may 
discourage making negotiated rates public, the FTC and DOJ guidance 
also identifies circumstances in which exchanges of health care price 
information--that could include negotiated rates--are unlikely to 
raise significant antitrust concerns. These circumstances require the 
collecting of price information by a third-party entity and ensuring 
that any information disseminated is aggregated such that it would not 
allow recipients to identify the prices charged by an individual 
provider.[Footnote 42] Under these circumstances, consumers may not be 
hindered in their ability to have information that will allow them to 
make informed decisions about their health care. 

Selected Initiatives Vary in the Information They Make Available, and 
Few Initiatives Provide Estimates of Consumers' Complete Costs: 

The price information made available to consumers by the eight 
selected price transparency initiatives varies, in large part due to 
differences in the price data available to each initiative. 
Additionally, we found that few of the selected initiatives are able 
to provide estimates of consumers' complete costs, primarily due to 
limitations of the price data that they use and other obstacles. 

Selected Initiatives Vary In the Information They Make Available to 
Consumers and Other Interested Parties: 

The eight public and private price transparency initiatives that we 
examined vary in the price information they make available to 
consumers. (See table 2.) Three public initiatives in California, 
Florida, and Wisconsin make information available on hospitals' billed 
charges, which are typically the amounts hospitals bill payers and 
patients for services before any negotiated or reduced payment 
discounts are applied. In general, hospitals' billed charges do not 
reflect the amount most payers and patients ultimately pay for the 
service. Two private initiatives administered by Aetna and Anthem 
provide their members with price information based on their contracts 
with providers, and this information reflects the insurer's negotiated 
discounts. Similarly, the federal initiative provides price 
information based on Medicare payment rates. Initiatives in 
Massachusetts and New Hampshire provide price information, based on 
payments made to providers, using claims data, and these prices 
reflect any negotiated discounts or other reductions off the billed 
charges.[Footnote 43] Despite differences in the types of price 
information they provide, the selected initiatives are generally 
similar in the types of services for which they provided price 
information,[Footnote 44] with most providing price information only 
for a limited set of hospital or surgical services that are common, 
comparable, or planned in advance, such as a knee replacement or a 
diagnostic test.[Footnote 45] 

Table 2: Types of Health Care Services and Price Information Made 
Available by Selected Price Transparency Initiatives, 2011: 

Selected price transparency initiatives: Centers for Medicare and 
Medicaid Services (CMS) Hospital Compare; 
Health care services for which price information is made available[A]: 
43 common inpatient hospital services; 
Type of price information made available: Median Medicare payment 
rates[B]. 

Selected price transparency initiatives: California Common Surgeries 
and Charges Comparison; 
Health care services for which price information is made available[A]: 
37 inpatient surgical services; 
Type of price information made available: Median billed charges from 
hospitals[C]. 

Selected price transparency initiatives: Florida Health Finder; 
Health care services for which price information is made available[A]: 
Over 150 inpatient, outpatient, and ambulatory surgery center services; 
Type of price information made available: Range (25[TH] to 75th 
percentile) of billed charges from hospitals[C]. 

Selected price transparency initiatives: Massachusetts 
MyHealthCareOptions; 
Health care services for which price information is made available[A]: 
37 inpatient and outpatient hospital services; 
Type of price information made available: Median and range (15[TH] to 
85th percentile) of insurers' aggregated payments made to that 
provider based on claims data[D]. 

Selected price transparency initiatives: New Hampshire HealthCost; 
Health care services for which price information is made available[A]: 
42 preventative health, emergency visits, radiology, surgical 
procedures, and maternity services; 
Type of price information made available: Median payment made by that 
specific insurance plan to that specific provider based on claims 
data[D]. 

Selected price transparency initiatives: Wisconsin Hospital 
Association PricePoint; 
Health care services for which price information is made available[A]: 
316 inpatient hospital services, 75 outpatient surgical services, and 
27 emergency department and urgent care services; 
Type of price information made available: Average and median billed 
charges from hospitals and median and range (20[TH] to 80th 
percentile) of billed charges from ambulatory care centers[C]. 

Selected price transparency initiatives: Aetna Member Payment 
Estimator; 
Health care services for which price information is made available[A]: 
40 hospital service bundles and 460 physician service bundles 
(comprised of 3 categories of physician office visits, surgical 
procedures, and diagnostic tests and procedures); 
Type of price information made available: Aetna's negotiated rates[E]. 

Selected price transparency initiatives: Anthem Care Comparison; 
Health care services for which price information is made available[A]: 
59 service bundles including hospital inpatient and outpatient 
services, physician office visits, and diagnostic and imaging services; 
Type of price information made available: Range of Anthem's negotiated 
rates[E]. 

Source: GAO analysis of selected price transparency initiatives and 
interviews with administering officials. 

[A] The selected price transparency initiatives use different terms to 
refer to what we describe as the health care "services" for which 
consumers can look up price information. 

[B] Medicare payment rates are the prices CMS recently paid providers 
for services provided to Medicare beneficiaries. These payment rates 
are set by CMS and based on various factors such as geographic 
location. 

[C] Billed charges are the amount hospitals and other providers bill 
payers and patients for a service, before any negotiated or reduced 
payment discounts are applied, and thus generally do not reflect the 
amount most payers and patients ultimately pay for the service. 

[D] Claims data reflect the amount, based on the record of payments 
made by consumers and payers, a provider was previously reimbursed for 
the service and incorporates any insurer's negotiated discounts or any 
reduced discounts given. Initiatives used claims data to identify and 
report price information in different ways. New Hampshire's price 
transparency website uses its claims data to report a single point 
estimate of the estimated cost of the service, based on the median of 
all payments paid by that specific insurance plan to that provider for 
that service. Massachusetts's price transparency website combines the 
claims of all the applicable insurers and reports a price reflecting 
the aggregated price per provider for that service, as paid by these 
insurers. 

[E] Negotiated rates are the prices an insurance company has 
negotiated with a provider to provide a health care service. These 
prices reflect prices under contract and any discounts that have been 
agreed to. 

[End of table] 

Various factors help explain the differences in the types of price 
information made available by the selected initiatives. In some cases, 
the initiatives provide certain types of price information because of 
the price data available to them, generally through state law. For 
example, the Wisconsin initiative provides price information based on 
hospitals' billed charges because the state contracted with the 
Wisconsin Hospital Association (WHA) to collect and disseminate 
hospital information, including hospitals' billed charges, when the 
state privatized hospital data collection. WHA saw this as an 
opportunity to develop a price transparency initiative that reported 
billed charges for consumers.[Footnote 46] In both California and 
Florida, initiative officials said that state laws enabled the state 
to collect and make hospitals' billed charges public and this gave the 
states the authority to make this information available to consumers. 
[Footnote 47] In Massachusetts, officials said that 2006 state health 
reform legislation provided the state with the necessary authority to 
collect claims data for the price transparency initiative.[Footnote 48] 

In other cases, the price information the initiatives provide reflects 
choices made by initiative officials regarding the types of 
information that they considered would be most helpful to consumers. 
For example, in developing Hospital Compare, CMS officials chose to 
provide price information based on Medicare payment rates to hospitals 
because, according to officials, this information would be more 
helpful than hospitals' retrospective billed charges for Medicare 
patients. The officials explained that hospitals' billed charges are 
too divergent from what Medicare and insurance companies actually pay 
for the same service, and CMS officials reasoned that Medicare rates 
could give consumers, particularly those without insurance, a point of 
comparison from which they may be able to negotiate lower prices with 
providers.[Footnote 49] In New Hampshire, officials said they 
successfully sought legislation to get access to claims data from all 
payers in the state to establish an All Payer Claims Database (APCD) 
for their initiative.[Footnote 50] Based on an earlier experience with 
posting billed charges and feedback from consumers, New Hampshire 
officials were convinced that billed charges were not useful for 
insured consumers. 

Additionally, some factors that may limit access to certain price data 
also limit how the price information is presented to consumers. For 
example, some of the selected initiatives, such as Florida and Anthem, 
present price information as a range, which avoids providing a 
specific price that providers may consider proprietary.[Footnote 51] 
Anthem officials further noted that the primary reason the initiative 
provides price information as a range is so that the price information 
can better reflect for consumers the billing variation and differences 
in treatment decisions that occur when health care services are 
delivered to different patients. In Massachusetts, the initiative 
combines the claims, or prices paid, by commercial insurers for that 
specific hospital service and reports a provider's median price as 
well as a range of prices paid for that service. Officials explained 
that they present aggregated price information across all health plans 
to avoid disclosing prices that may raise proprietary concerns among 
providers and insurers. In another approach, the two initiatives by 
New Hampshire and Aetna bundle multiple services typically performed 
at the same time into the price presented, such as bundling all 
associated costs for a hip replacement surgery. By doing so, New 
Hampshire officials said that they are able to mask the specific rates 
paid for individual items, and avoid proprietary concerns, while 
providing an easily understandable estimate for the total health care 
service. Lastly, officials from the Aetna and Anthem initiatives cited 
provider resistance as limiting the extent to which they can make 
price information available to their members for all providers in the 
insurers' networks--with provider-imposed contractual obligations 
requiring the Aetna and Anthem initiatives to omit price information 
for certain providers in the initiatives' websites' search results. 

In addition to providing the price of a service, most selected 
initiatives also provide a wide range of nonprice information, such as 
information on quality of care measures or patient volume. Five of the 
eight selected initiatives provide quality information for consumers 
to consider along with price when making decisions about a provider. 
(See table 3.) In addition to providing quality and volume measures, 
initiatives also shared information, such as resources for 
understanding and using price information, including explanations of 
the source and limitations of the price data, glossaries, and medical 
encyclopedias. Initiatives also provided a range of supplementary 
financial information to give context to the price information 
provided. For example, Massachusetts' initiative presents symbols ($, 
$$, $$$) to indicate how the provider's price compares to the state 
median for that service in an effort to provide what officials 
described as more easily understood price information for consumers 
who are familiar with graphical ratings systems. Additionally, 
Wisconsin's initiative provides pie charts representing the percentage 
different payer types--such as private insurers, Medicare, and 
Medicaid--paid to a specific hospital in relation to the total billed 
charges, which indicates at an aggregate level the extent of discounts 
given by payer category. 

Table 3: Quality and Volume Information Provided by Selected Price 
Transparency Initiatives: 

Selected price transparency initiative: Centers for Medicare and 
Medicaid Services (CMS) Hospital Compare; 
Quality data: [Check]; 
Volume data: [Check]; 
Examples of quality and volume data[A]: Process of care measures, how 
many Medicare patients were treated for a service at a given facility. 

Selected price transparency initiative: California Common Surgeries 
and Charges Comparison; 
Quality data: [Empty]; 
Volume data: [Check]; 
Examples of quality and volume data[A]: The number of discharges for a 
service in a given year. 

Selected price transparency initiative: Florida Health Finder; 
Quality data: [Check]; 
Volume data: [Check]; 
Examples of quality and volume data[A]: Patient safety indicators, 
total number of hospitalizations by service at a facility. 

Selected price transparency initiative: Massachusetts 
MyHealthCareOptions; 
Quality data: [Check]; 
Volume data: [Check]; 
Examples of quality and volume data[A]: Information on patient safety 
practices, number of patients treated. 

Selected price transparency initiative: New Hampshire HealthCost; 
Quality data: [Empty]; 
Volume data: [Empty]; 
Examples of quality and volume data[A]: None. 

Selected price transparency initiative: Wisconsin Hospital Association 
PricePoint; 
Quality data: [Empty]; 
Volume data: [Check]; 
Examples of quality and volume data[A]: The number of discharges for a 
service in a given year. 

Selected price transparency initiative: Aetna Member Payment Estimator; 
Quality data: [Check]; 
Volume data: [Empty]; 
Examples of quality and volume data[A]: Designation of quality and 
efficiency for hospitals and selected specialists. 

Selected price transparency initiative: Anthem Care Comparison; 
Quality data: [Check]; 
Volume data: [Check]; 
Examples of quality and volume data[A]: Mortality rates, number of 
patients who received that treatment. 

Source: GAO analysis of selected price transparency initiatives and 
interviews with administering officials. 

[A] Quality data and other nonprice information provided by the 
initiatives' websites came from a variety of national sources, 
including WebMD, CMS, Leapfrog Group, and AHRQ. Many state initiatives 
also relied on information reported to state agencies, such as the 
California Office of Statewide Health Planning and Development, the 
Florida Center for Health Information and Policy Analysis, and the 
Massachusetts Division of Health Care Finance and Policy. 

[End of table] 

Some officials expressed reservations about how consumers may use 
price and quality information together.[Footnote 52] Insurance company 
officials we spoke with see linking price to quality information as a 
means for consumers to identify high-value providers and for the 
company to create more cost-efficient provider networks. In Hospital 
Compare, however, quality data and price data are not linked. CMS 
officials said that while quality data are featured prominently on 
Hospital Compare, price information is featured less prominently. CMS 
officials explained that promoting price information to consumers, in 
the absence of greater consumer education about how to understand 
price information in relation to quality, could lead consumers to 
select high-priced providers due to an assumption that price is 
indicative of quality. Due to similar concerns that consumers may 
assume that a higher price is a sign of higher quality, Aetna's 
initiative provides information to educate consumers that high quality 
and low price are not mutually exclusive. 

Lastly, in addition to the variety of price and other information made 
available by the selected initiatives, the initiatives also vary in 
terms of who has access to the initiatives' websites and in terms of 
their expected audiences. For example, the price information provided 
by the federal initiative we selected is available to all consumers 
through a publicly available website. CMS officials said the expected 
audience of this initiative includes insured and uninsured consumers, 
researchers, Medicare beneficiaries, and providers. Like the federal 
initiative, all of the selected state initiatives' websites are 
publicly available, although they include price information only for 
their particular state. In contrast, the price information provided by 
the two selected insurance company initiatives' websites are 
accessible to their members, but not to the general public. 

Few Selected Initiatives Provide Estimates of Complete Costs to 
Consumers: 

Few of the selected initiatives provide estimates of consumers' 
complete costs, which is price information that incorporates any 
negotiated discounts; is inclusive of all costs associated with a 
particular health care service, such as hospital, physician, and lab 
fees; and identifies consumers' out-of-pocket costs. (See table 4.) 
Specifically, of our eight selected initiatives, only the Aetna and 
New Hampshire initiatives provide estimates of a consumer's complete 
cost. The two initiatives are able to provide this information in part 
because they have access to and use price data--negotiated rates and 
claims data, respectively--that allow them to provide consumers with a 
price for the service by each provider that is inclusive of any 
negotiated discounts or reduced payments made to the billed charge. 
Specifically, Aetna bases its price data on its contractual rates with 
providers, which include negotiated discounts. New Hampshire provides 
price information based on its records of closed claims of particular 
providers for particular services under a consumer's specific health 
insurance plan.[Footnote 53] Both initiatives use claims data to 
identify all of the hospital, physician, and lab fees associated with 
the services for which they provide price information. For calculating 
estimated out-of-pocket costs, Aetna links member data to its price 
transparency website, which automatically updates and calculates the 
member's estimated out-of-pocket costs in real-time based on the 
provider and service reported, and the member's partially exhausted 
deductibles. In contrast, to calculate out-of-pocket costs, insured 
users of New Hampshire's initiative's website enter their insurance 
plan, their deductible amount, and their percentage rate of co- 
insurance. New Hampshire's Health Cost website then uses that 
information to calculate an out-of-pocket cost, along with a total 
cost for the service by provider. Both initiatives demonstrate that 
while providing complete cost information presents challenges, it can 
be done--either as undertaken by Aetna for its members or as carried 
out by New Hampshire, which makes complete cost information available 
through publicly accessible means. 

Table 4: Extent to Which Selected Price Transparency Initiatives 
Provide Price Information That Reflects Estimates of Consumers' 
Complete Costs: 

Selected price transparency initiative: Centers for Medicare and 
Medicaid Services Hospital Compare; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Check]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Empty]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [Empty]; 
Complete cost estimate provided by initiative: [Empty]. 

Selected price transparency initiative: California Common Surgeries 
and Charges Comparison; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Empty]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Empty]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [A]; 
Complete cost estimate provided by initiative: [Empty]. 

Selected price transparency initiative: Florida Health Finder; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Empty]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Empty]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [A]; 
Complete cost estimate provided by initiative: [Empty]. 

Selected price transparency initiative: Massachusetts 
MyHealthCareOptions; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Check][B]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Empty]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [Empty]; 
Complete cost estimate provided by initiative: [Empty]. 

Selected price transparency initiative: New Hampshire HealthCost; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Check]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Check]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [Check][C]; 
Complete cost estimate provided by initiative: [Check]. 

Selected price transparency initiative: Wisconsin Hospital Association 
PricePoint; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Empty]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Empty]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [A]; 
Complete cost estimate provided by initiative: [Empty]. 

Selected price transparency initiative: Aetna Member Payment Estimator; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Check]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Check]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [Check][D]; 
Complete cost estimate provided by initiative: [Check]. 

Selected price transparency initiative: Anthem Care Comparison; 
Components of complete cost estimates provided by initiative: Price 
reflects negotiated discounts: [Check]; 
Components of complete cost estimates provided by initiative: Price 
inclusive of all associated costs, including hospital, physician, and 
lab fees: [Check]; 
Components of complete cost estimates provided by initiative: 
Identifies out-of-pocket costs: [Empty]; 
Complete cost estimate provided by initiative: [Empty]. 

Source: GAO analysis of selected price transparency initiatives' 
documentation and interviews with administering officials. 

[A] Selected initiatives in Florida, Wisconsin, and California report 
price information as billed charges, that is, the price billed to 
consumers with no negotiated discounts from insurers or providers 
included. An uninsured patient may expect to be billed the full amount 
charged by the provider; however, some research indicates that 
uninsured patients rarely pay the full billed charge. In practice, 
what an uninsured consumer may be expected to pay out-of-pocket is 
often arranged on a case-by-case basis with the provider, and may 
depend on various factors, such as the consumer's ability to pay, the 
availability of charity care or sliding scale deductions, and state 
restrictions on what hospitals can collect from uninsured patients. 

[B] Massachusetts's initiative uses the claims data of applicable 
insurers that reflect payments made after negotiated discounts have 
been applied. The price presented is an aggregate of all the prices 
paid by these insurers to that provider for that service. 

[C] For insured consumers, New Hampshire's initiative identifies an 
estimated out-of-pocket cost, by health plan, for that provider and 
that service. For uninsured consumers, the New Hampshire initiative 
reports price information based on billed charges minus a 15 percent 
discount for uninsured consumers, which it states is a typical 
uninsured discount. 

[D] Aetna's initiative provides out-of-pocket costs only to its 
intended audience, Aetna members. 

[End of table] 

As table 4 shows, six of the eight initiatives that we reviewed do not 
provide estimates of consumers' complete costs. The reasons for this 
vary by initiative, but are primarily due to the limitations of the 
price data that each initiative uses. For example, initiatives in 
California, Florida, and Wisconsin provide price information based on 
billed charges from hospitals, which do not reflect discounts 
negotiated by payers and providers, all associated costs (such as 
physician fees), and out-of-pocket costs. An official representing 
Wisconsin's initiative said that WHA commonly receives requests from 
consumers to include physician fees in the price estimate, but the 
initiative does not have access to these price data, as they are part 
of a separate billing process and the hospitals do not have these data 
to submit. California officials said that collecting claims data from 
insurers would require additional legal authority, raise proprietary 
concerns, and pose resource challenges. Florida officials acknowledged 
that providing a billed charge is not as meaningful for consumers as 
other types of price data, such as claims data. However, while Florida 
officials have the authority to collect claims data,[Footnote 54] they 
said that at this time they are limited from pursuing such information 
due to the expected financial costs of collecting and storing the data 
and the challenges of overcoming the proprietary concerns of providers 
and insurers. Florida officials characterized their initiative's 
inability to report out-of-pocket costs as a major limitation. The 
federal initiative provides price information that reflects what 
Medicare pays to hospitals for a given service but does not reflect 
what consumers, including Medicare beneficiaries, would pay out-of- 
pocket. CMS officials said that providing out-of-pocket costs was too 
complicated to calculate in advance due to consumers' medical 
variation and technological limitations. 

In contrast, other initiatives have access to data that may enable the 
initiatives to provide more complete cost estimates to consumers, but 
certain factors limit the extent to which this type of information is 
made available. For example, the Massachusetts initiative has access 
to claims data that could be used to provide more complete cost 
estimates to consumers, such as negotiated discounts for commercial 
insurers.[Footnote 55] However, it presents price information that 
aggregates the prices paid by commercial insurers for particular 
services, in part due to insurers' and providers' concerns about the 
initiative disclosing price information by insurer. As a result, 
consumers are unable to see an estimate for a particular provider that 
is specific to their insurance company or to calculate their out-of 
pocket costs based on their specific plan. The officials noted that 
providers' and insurers' resistance to publicly reporting payments 
made by insurers may also be a challenge for states seeking access to 
more meaningful price information for their initiatives, such as 
claims data. Lastly, Anthem's initiative does provide a price 
inclusive of all associated fees and negotiated discounts, but 
currently does not use the specific details of consumers' insurance 
plan benefits, such as their deductible, copayment, or coinsurance, to 
estimate consumers' out-of-pocket costs.[Footnote 56] 

Conclusions: 

Transparent health care price information--especially estimates of 
consumers' complete costs--can be difficult for consumers to obtain 
prior to receiving care. For example, when we contacted hospitals and 
physicians to obtain price information for two common services, we 
generally received only incomplete estimates, which are insufficient 
for helping consumers to anticipate all of the costs associated with 
these services or to make more informed decisions about their health 
care. Our review identified various health care and legal factors that 
can make it difficult for consumers to obtain meaningful health care 
price information, such as estimates of consumers' complete costs, in 
advance of receiving services. This lack of health care price 
transparency presents a serious challenge for consumers who are 
increasingly being asked to pay a greater share of their health care 
costs. 

Despite the complexities of doing so, two of the eight price 
transparency initiatives we examined were able to make complete cost 
estimates available to consumers. Making meaningful health care price 
information available to consumers is important, and the fact that two 
initiatives have been able to do it suggests that this is an 
attainable goal. To promote health care price transparency, HHS is 
currently supporting various efforts to make price information 
available to consumers--including the CMS initiative in our review--
and the agency is expected to do more in this area in the future. We 
note in our review, for example, that HHS provides price information 
on insurance plans through its healthcare.gov website. Similarly, 
CMS's web-based Medicare Part D Plan Finder also provides information 
on prescription drug prices and CMS's Health Care Consumer Initiatives 
provide information on the price Medicare pays for common health care 
services at the county and state levels. In the near future, HHS's 
price transparency efforts are expected to expand. For example, PPACA 
requires HHS to provide oversight and guidance for the Exchanges that 
are expected to provide certain price information for consumers 
through participating insurers. PPACA also directs HHS to develop a 
pilot program which may include bundled payments, providing another 
possible opportunity for price transparency. In total, HHS has several 
opportunities to promote greater health care price transparency for 
consumers. 

Recommendations for Executive Action: 

As HHS implements its current and forthcoming efforts to make 
transparent price information available to consumers, we recommend 
that HHS take the following two actions: 

* Determine the feasibility of making estimates of complete costs of 
health care services available to consumers through any of these 
efforts. 

* Determine, as appropriate, the next steps for making estimates of 
complete costs of health care services available to consumers. 

Agency Comments: 

HHS reviewed a draft of this report and provided technical comments, 
which we incorporated as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the Secretary of Health and Human Services and other interested 
parties. In addition, the report will be available at no charge on the 
GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7114 or kohnl@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix II. 

Signed by: 

Linda T. Kohn Director, Health Care: 

List of Congressional Requesters: 

The Honorable Fred Upton: 
Chairman: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Cliff Stearns: 
Chairman: 
Subcommittee on Oversight and Investigations: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Joe Barton: 
House of Representatives: 

The Honorable Michael Burgess: 
House of Representatives: 

The Honorable Gene Green: 
House of Representatives: 

[End of section] 

Appendix I: Methodology and Results of Contacting Selected Providers 
for Price Information: 

To obtain illustrative examples of factors that influence the 
availability of health care price information for consumers, we 
anonymously contacted hospitals and primary care physicians with zip 
codes located in the Denver, Colorado, health care market.[Footnote 
57] We requested the price of a full knee replacement from hospitals 
and the price of a diabetes screening from primary care physicians. We 
requested these prices for patients without insurance and for patients 
with Medicare (without supplemental health insurance). Specifically, 
we called 19 hospitals and 20 primary care physicians between February 
28 and March 10, 2011, and contacted each provider up to three times 
in an attempt to get a response.[Footnote 58] We determined that we 
obtained a response from representatives if they answered the phone or 
they transferred us to a price quote voice mail message that requested 
specific information from us about the requested service so 
representatives could call back with cost estimates. In cases where we 
were asked to provide more information, such as in the case of 
receiving a price quote voice mail, we did not provide such 
information in order to help maintain our anonymity. We considered 
hospitals and physicians nonresponsive if no one answered the phone, 
or if we received a voice mail message that did not indicate what we 
needed to provide in order to receive price information, in all three 
attempts. 

Results from Contacting Hospital Representatives: 

We received a response from representatives at 17 of the 19 hospitals 
we contacted. Of the 17 hospital representatives that responded, 10 
did not provide any type of price information. None of the hospital 
representatives could provide a complete cost estimate for a full knee 
replacement, meaning the price given was not reflective of any 
negotiated discounts, was not inclusive of all associated costs, and 
did not identify consumers' out-of-pocket costs. Almost all of the 
hospital representatives that responded (14 of 17) required more 
information from us to provide a complete cost estimate, such as 
current procedural terminology (CPT)[Footnote 59] codes, the length of 
time in the operating room, the model of knee used, or what kind of 
anesthetic would be provided, which we did not provide. Of the 7 
hospital representatives that were able to provide some price 
information, 5 provided billed charges in either a range, such as 
between $32,974.73 and $100,676.50 or an average charge, such as 
$82,390, which is typically reflective of what an uninsured consumer 
would pay.[Footnote 60] (See table 5 for more information.) 

Table 5: Results of Contacting Hospitals for the Price of a Full Knee 
Replacement on Behalf of a Patient with Medicare and without Health 
Insurance from Those Who Responded: 

Hospital number and insurance status: 1. Medicare; 
Type of price provided: Deductible; 
Actual price provided: $1,132 (inpatient services) and $162 
(outpatient services) and 20% of Medicare approved amount; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not include associated fees; 
Examples of responses from representatives[A]: Representative did not 
know what the surgeon would charge. 

Hospital number and insurance status: 2. Medicare; 
Type of price provided: Average and range of billed charges, Medicare-
allowable amount; 
Actual price provided: $82,390 or $65,000-$95,000; with Medicare: 
$13,360 to 16,650; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not include associated fees or identify out-of-pocket costs; 
Examples of responses from representatives[A]: The charges vary 
depending upon length of stay (2-4 days), length of time in operating 
room, and model of knee used. 

Hospital number and insurance status: 3. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: It would take a week to 
get an estimate after speaking with a nurse. 

Hospital number and insurance status: 4. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Asked to leave message 
with name, date of procedure, physician's name, procedure, and phone 
number and they will call back with an estimate. 

Hospital number and insurance status: 5. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Asked to leave message 
with name, phone number, CPT codes, physician's name, insurance 
company name, subscriber's identification number, and date of birth. 

Hospital number and insurance status: 6. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Requested us to ask the 
physician for CPT codes, and provide physician's name. The estimate 
would only include the hospital facility fees, and unsure what the 
other charges would be. 

Hospital number and insurance status: 7. Medicare; 
Type of price provided: Deductible; 
Actual price provided: $1,132; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not reflect negotiated rates or include associated fees; 
Examples of responses from representatives[A]: Could not provide a 
charge for the procedure. The deductible does not include physician, 
rehabilitation, or anesthesiology fees. 

Hospital number and insurance status: 8. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Requested CPT codes, 
how long the length of stay would be in the hospital, how long the 
patient would be in the operating room, and under what kind of 
anesthetic (local or general). 

Hospital number and insurance status: 9. Medicare; 
Type of price provided: Range of billed charges, co-payment, and 
deductible; 
Actual price provided: $32,974.73 to $100,676.50; 
with Medicare: $2,662 to $2,566 and $1,100 deductible; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not include associated fees; 
Examples of responses from representatives[A]: Hospital charges vary 
based on how many days patient is in the hospital and variation in 
cases. Representative provided a disclaimer that the price is just an 
estimate and the hospital is not liable for any differences. 

Hospital number and insurance status: 10. Medicare; 
Type of price provided: Average billed charge and deductible; 
Actual price provided: $50,000 and $1,132; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not reflect negotiated rates and does not include associated fees; 
Examples of responses from representatives[A]: Did not provide. 

Hospital number and insurance status: 11. Uninsured; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Asked to leave message 
with name, phone number, procedure, CPT and International Statistical 
Classification of Diseases (ICD)-9 codes, and date of service. The 
representative said no one else could provide this information because 
it is complicated and they would need to check information with the 
patient's insurer. 

Hospital number and insurance status: 12. Uninsured; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Needed the procedure 
and diagnostic codes, the name of the hospital, name, phone number, 
and insurance information. 

Hospital number and insurance status: 13. Uninsured; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Asked to leave message 
with first and last name, phone number, CPT code (can get from 
physician), physician's name, insurance company name, subscriber's 
identification number, and date of birth. 

Hospital number and insurance status: 14. Uninsured; 
Type of price provided: Range of billed charges; 
Actual price provided: $65,000 to $95,000; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not include associated fees[B]; 
Examples of responses from representatives[A]: Range of billed charges 
is dependent on the model of implant used, number of days in hospital, 
and how long the operating room time is. 

Hospital number and insurance status: 15. Uninsured; 
Type of price provided: Average billed charge; 
Actual price provided: $58,581.59 (including a discount for self-
payers) or $50,023.42 if paid within 4 days of receiving the bill; 
Price reflective of consumers' complete cost estimates (Y/N): N - Does 
not include associated fees; 
Examples of responses from representatives[A]: Did not provide. 

Hospital number and insurance status: 16. Uninsured; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Asked to leave message 
with phone number, patient name, procedure, CPT code, ICD-9 code, and 
date of service (if scheduled). 

Hospital number and insurance status: 17. Uninsured; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N): N/A; 
Examples of responses from representatives[A]: Recommended we contact 
an orthopedic surgeon or physician for price information. 

Source: GAO analysis of anonymous phone calls to hospitals. 

[A] When we called several hospitals we received a price quote voice 
mail message which asked us to list information, such as diagnosis 
codes for the service we inquired about and personal information, and 
a representative would call back with a cost estimate. We considered 
this receiving a response since this method was the way these 
hospitals responded to such requests. In cases where we were asked to 
provide additional information by a voice mail or representative, we 
did not provide such information in order to help maintain our 
anonymity. 

[B] According to the hospital representative we spoke with, the range 
of billed charges provided were considered an out-of-pocket cost for 
an uninsured consumer. 

[End of table] 

Results from Contacting Physician Office Representatives: 

We received a response from 18 of the 20 representatives we contacted. 
Of the physician representatives that responded, most could provide 
some type of price information (14 of 18), but only 4 out of 18 
representatives who responded could provide a complete cost estimate 
for a diabetes screening. Most representatives who responded (13 of 
18) required more information from us to provide a complete cost 
estimate, such as a diagnosis from a physician and the amount the 
laboratory would charge, which we did not provide. Additionally, 
almost half (8 of 18) of representatives who responded said the 
patient needs to be seen by a physician before determining a complete 
cost estimate. All 14 physician representatives who were able to 
provide some type of price information provided price information 
based on billed charges.[Footnote 61] (See table 6 for more 
information.) 

Table 6: Results of Contacting Physicians for the Price of a Diabetes 
Screening on Behalf of a Patient with Medicare and without Health 
Insurance from Those Who Responded: 

Primary care physician number and insurance status: 1. Medicare; 
Type of price provided: Billed charge; 
Actual price provided: $75 for an office visit for a person without 
insurance; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not reflect negotiated rates, include associated fees, or 
identify out-of-pocket costs; 
Examples of responses from representatives[B]: Price is different for 
everyone. Patient would need to come in for office visit and then the 
physician would decide on a test. 

Primary care physician number and insurance status: 2. Medicare; 
Type of price provided: Billed charge, Medicare deductible and co-
payment; 
Actual price provided: $125 for an office visit, $250 to $500 
quarterly, and 20% of the office visit (about $25); 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not include associated fees; 
Examples of responses from representatives[B]: Not sure what the lab 
would charge. 

Primary care physician number and insurance status: 3. Medicare; 
Type of price provided: Range of billed charges; 
Actual price provided: $100 to $200 for office visit for a person 
without insurance; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not reflect negotiated rates, include associated fees, or 
identify out-of-pocket costs; 
Examples of responses from representatives[B]: There would be other 
tests that would need to happen depending upon a visit with the 
physician. 

Primary care physician number and insurance status: 4. Medicare; 
Type of price provided: Billed charges; 
Actual price provided: Physician fee is $85, blood draw is $25; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not reflect negotiated rates or identify out-of-pocket costs; 
Examples of responses from representatives[B]: Unsure of what Medicare 
would cover. 

Primary care physician number and insurance status: 5. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N/A; 
Examples of responses from representatives[B]: Did not know what 
Medicare covers or the charge amount. The lab services are also an 
additional charge and are billed separately. 

Primary care physician number and insurance status: 6. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N/A; 
Examples of responses from representatives[B]: The price varies based 
on the office visit and the diagnosis and whatever Medicare would pay. 
Lab work would also cost extra. 

Primary care physician number and insurance status: 7. Medicare; 
Type of price provided: Billed charge; 
Actual price provided: $90 to see a physician; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not reflect negotiated rates, include associated fees, or 
identify out-of-pocket costs; 
Examples of responses from representatives[B]: Requested the name of 
the specific test as it would be ordered from the physician. They 
needed to know what services the physician would order to determine 
the price. 

Primary care physician number and insurance status: 8. Medicare; 
Type of price provided: Billed charge; 
Actual price provided: $33 for nurse's visit, $8 for glucose test; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not reflect negotiated rates or identify out-of-pocket costs; 
Examples of responses from representatives[B]: Unsure of the price 
Medicare would charge. 

Primary care physician number and insurance status: 9. Medicare; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N/A; 
Examples of responses from representatives[B]: Respondent had no idea 
how much it would cost and said they are not taking new Medicare 
patients anyway. 

Primary care physician number and insurance status: 10. Uninsured; 
Type of price provided: Billed charges; 
Actual price provided: $159 to see a physician; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not include associated fees[C]; 
Examples of responses from representatives[B]: Have to be seen by a 
physician before determining costs. For lab tests, the price depends 
because some tests are done by the lab and some are given in the 
office. 

Primary care physician number and insurance status: 11. Uninsured; 
Type of price provided: Billed charges; 
Actual price provided: $120 to see a physician, $37.40 for a 
comprehensive metabolic panel, $66 for a 1 hour screen; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: Y[C]; 
Examples of responses from representatives[B]: Have to be seen by a 
doctor first to determine what services are needed. 

Primary care physician number and insurance status: 12. Uninsured; 
Type of price provided: Billed charges; 
Actual price provided: $241 to see physician, $14 for the glucose 
test, and $32 for a blood draw; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not include associated fees[C]; 
Examples of responses from representatives[B]: Unsure of the lab cost 
because it is a separate charge. It can range based on what services 
the patient receives. 

Primary care physician number and insurance status: 13. Uninsured; 
Type of price provided: Range of billed charges; 
Actual price provided: $89-$150 to see a physician, 30% discount for 
self-paying patients; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not include associated fees[C]; 
Examples of responses from representatives[B]: Need to be seen by a 
physician here to determine what lab work would need to be done. A 
range is provided because it depends on the complexity of the visit. 

Primary care physician number and insurance status: 14. Uninsured; 
Type of price provided: Billed charges; 
Actual price provided: $250 for a new patient exam and the test is 
$125 including blood work; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: Y[C]; 
Examples of responses from representatives[B]: Did not provide. 

Primary care physician number and insurance status: 15. Uninsured; 
Type of price provided: Billed charges; 
Actual price provided: $57 for the test and about $120 for office 
visit. There is a 30% discount for the office visit for paying day of; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: Y; 
Examples of responses from representatives[B]: The price depends on 
the length of the visit. 

Primary care physician number and insurance status: 16. Uninsured; 
Type of price provided: Range of co-payment if qualifies for Colorado 
Indigent Care Program (CICP)[D]; 
Actual price provided: $5-35; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: Y; 
Examples of responses from representatives[B]: Without being in the 
CICP program, they could not provide price information. 

Primary care physician number and insurance status: 17. Uninsured; 
Type of price provided: None; 
Actual price provided: N/A; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N/A; 
Examples of responses from representatives[B]: Person needs to be an 
established patient and have a physical every year. Also the physician 
does not take uninsured patients. 

Primary care physician number and insurance status: 18. Uninsured; 
Type of price provided: Range of billed charges and billed charge; 
Actual price provided: $120 for physician's visit and test could range 
from $100 to $500; 
Price reflective of consumers' complete cost estimates (Y/N)[A]: N - 
Does not include associated fees[C]; 
Examples of responses from representatives[B]: Blood tests are billed 
separately. The tests done will depend upon what services the 
physician orders. 

Source: GAO analysis of anonymous phone calls to primary care 
physicians' offices. 

[A] In cases where a representative did not mention a negotiated 
discount for an uninsured patient, we assumed that a negotiated 
discount was not applicable. 

[B] When asked for additional information by a physician 
representative, we did not provide it in order to help maintain our 
anonymity. 

[C] According to the physician representative we spoke with, the 
billed charges provided were considered an out-of-pocket cost for an 
uninsured consumer. 

[D] CICP provides funding to clinics and hospitals for Colorado 
residents or migrant farm workers who are United States citizens or 
legal immigrants, who have income and resources combined at or below 
250 percent of the Federal Poverty Level, and are not eligible for the 
Medicaid Program or Child Health Plan Plus. 

[End of table] 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Linda T. Kohn (202) 512-7114 or kohnl@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Will Simerl, Assistant 
Director; Rebecca Hendrickson; Giselle Hicks; Krister Friday; Martha 
Kelly; Julian Klazkin; Monica Perez-Nelson; Rebecca Rust; and Amy 
Shefrin made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Office of the Actuary, Centers for Medicare and Medicaid Services, 
National Health Expenditures Tables, table 1, accessed November 23, 
2010, [hyperlink, 
https://www.cms.gov/NationalHealthExpendData/downloads/tables.pdf]. 

[2] Many health plans require enrollees to pay a portion of their 
health care costs up to a certain threshold, known as the deductible. 
A high deductible health plan is defined by the Internal Revenue 
Service (IRS) as a health plan with a higher annual deductible than 
typical health plans and has a maximum limit on the annual deductible 
and out-of-pocket medical expenses (including copayments but not 
premiums) that a consumer would pay. For 2011, the IRS set the minimum 
annual deductible for single coverage in a high deductible health plan 
at $1,200 and the maximum annual deductible and other out-of-pocket 
expense at $5,950. IRS Pub. 969, (2011), p. 3. 

[3] The Kaiser Family Foundation and Health Research & Educational 
Trust, Employer Health Benefits 2010 Annual Survey (2010). 

[4] In this report, we generally refer to "price" as information that 
is made available to the public by, for example, an insurer or state 
price transparency initiative. We generally refer to "cost" as a type 
of price information that is reflective of what a consumer may be 
expected to pay for a health care service. 

[5] For example, to assist decision making, research suggests that 
health care price transparency is most relevant for consumers who are 
having services that are nonurgent, such as a knee replacement, or not 
complex, such as a colonoscopy. See, for example, Paul Ginsburg. 
"Shopping for Price in Medical Care," Health Affairs, vol. 26, no. 2 
(2007). 

[6] In addition to identifying consumers' out-of-pocket costs, 
research suggests that price information should also be actionable, 
easy to understand, easily available, timely, credible, and be paired 
with quality information. See, for example, Quality Alliance Steering 
Committee, Recommendations for Reporting Cost and Price Information to 
Consumers, accessed August 18, 2010, [hyperlink, 
www.healthqualityalliance.org/.../Cost-
Price%20Recommendations_Final.pdf]. 

[7] Specifically, CMS's online Medicare Plan Finder tool enables 
consumers to compare both the prices of prescription drugs and 
Medicare Part D prescription drug coverage plans. Another CMS 
initiative, entitled Health Care Consumer Initiatives, provides price 
information based on what Medicare pays for common health care 
services at the county or other geographic areas, state, and national 
levels. Additionally, in June 2011, CMS proposed rules to allow 
organizations that meet certain qualifications to access Medicare 
claims data in an effort to help consumers and employers select high-
quality, low-price health care providers. 76 Fed. Reg. 33567 (June 8, 
2011). 

[8] National Conference of State Legislatures, State Legislation 
Relating to Transparency and Disclosure of Health and Hospital Charges 
(Updated December 2010), accessed June 9, 2011, [hyperlink, 
http://www.ncsl.org/default.aspx?tabid=14512]. GAO did not 
independently verify the laws reviewed in this study. State price 
transparency legislation makes price information available to 
consumers through various forms, such as requiring hospitals to make 
information available upon request or requiring hospitals to submit 
price information to a state agency that makes the information 
publicly available. 

[9] America's Health Insurance Plans, Health Care Provider Financial 
Information: State Reporting Requirements (January 2011). 

[10] PPACA, § 1001, 124 Stat. 119, 130-8, amended by § 10101(f), 124 
Stat. 119, 885-7 (codified at 42 U.S.C. § 300gg-18). 

[11] PPACA, § 1311, 124 Stat. 119, 173-181, amended by § 10104(f), 124 
Stat. 119, 900-01 (codified at 42 U.S.C. § 18031(e)(3)(C)). States 
have flexibility in designing their Exchanges to meet local needs, as 
long as the health insurance plans offered meet minimum certification 
standards established by the federal government. The federal 
government is exploring ways to partner on an Exchange with states 
that will not be certified by January 1, 2014. 

[12] PPACA, § 10104(f), 124 Stat. 119, 900-01 (codified at 42 U.S.C. § 
18031(e)(3)(C)). To implement these Exchanges, HHS has issued guidance 
and has begun the rulemaking process. For example, in July 2011, CMS 
issued proposed rules that include requirements that states must meet 
if they elect to establish and operate an Exchange and requirements 
that health insurance plans must meet to participate in the Exchanges, 
among other things. For more information, see 76 Fed. Reg. 41,866 
(July 15, 2011) and 76 Fed. Reg. 41930 (July 15, 2011). Additionally, 
according to CMS officials, healthcare.gov also provides cost sharing 
information such as deductible and out-of-pocket costs for consumers. 

[13] We identified relevant literature by searching on an Internet 
search engine using the term "health care price transparency" in 
conjunction with the following terms: "legal barriers," "regulatory 
barriers," "factors," "antitrust laws," "violation of privacy," 
"proprietary," and "barriers to." Additionally, we searched the 
Congressional Budget Office's and Congressional Research Service's 
websites, as well as previous work conducted by GAO. 

[14] To identify researchers with subject-matter expertise we reviewed 
relevant literature and selected researchers who testified before 
Congress in matters related to price transparency or who authored 
relevant literature. 

[15] Specifically, Colorado requires each licensed hospital to 
disclose, upon request, the average facility charge to a person 
seeking care or treatment for a frequently performed inpatient 
procedure prior to admission for such a procedure. Colo. Rev. Stat. § 
6-20-101 (2011). We selected Colorado in part because its law does not 
specify the manner in which consumers may request price information 
from hospitals, thus making the state more suitable for requests by 
telephone. 

[16] For the purposes of this study, we are excluding initiatives that 
are focused solely on providing the prices of prescription drugs or 
insurance plans. 

[17] We also reviewed the Office of Personnel Management's (OPM) 
Federal Employee Health Benefits (FEHB) program. OPM administers this 
program by setting price transparency expectations, such as a minimum 
number of health care services to include, for insurance companies 
that participate in FEHB. Due to the third party relationship of OPM 
in providing price information to consumers, we do not discuss OPM's 
price transparency initiative along with the other selected price 
transparency initiatives. In addition, the federal government has 
other price transparency initiatives that do not meet our definition 
of a price transparency initiative, such as HHS's Medicare Plan Finder 
and healthcare.gov. 

[18] In some cases, a statewide initiative is administered by a 
private third party entity, such as a state hospital association, but 
the state has a role in its initiation, regulation, or ongoing 
development of the price transparency initiative. In these cases, we 
have classified these as "public (state) initiatives" for the purpose 
of our review. 

[19] In our review we identified several types of private sector price 
transparency initiatives, such as websites that aggregate price 
information from public sources and companies that contract with 
employers to provide health care price information for the company's 
employees. 

[20] Some research indicates that uninsured patients rarely pay the 
full billed charge, and amounts charged may be heavily discounted 
based on charity care or other reduced payment programs. For example, 
one source estimates that most hospitals in the United States collect 
only 5 percent or less of billed charges from uninsured patients. See, 
for example, William O. Cleverly, Paula H. Song, and James O. 
Cleverly, Essentials of Health Care Finance, 7TH ed. (Sudbury, MA: 
Jones & Bartlett Learning, 2011). For more information also see, Uwe 
E. Reinhardt, "The Pricing of U.S. Hospital Services: Chaos Behind a 
Veil of Secrecy," Health Affairs, 25, no. 1 (2006); and Mark Merlis, 
"Health Care Price Transparency and Price Competition," National 
Health Policy Forum (Mar. 28, 2007). 

[21] PPACA, § 3023, 124 Stat. 119, 399 (codified at 42 U.S.C. § 1395cc-
4). 

[22] AHRQ is an agency within HHS, whose mission is to improve the 
quality, safety, efficiency, and effectiveness of health care by using 
evidence to improve health care, improving health care outcomes 
through research, and transforming research into practice. AHRQ also 
sponsors the Healthcare Cost and Utilization Project which is a family 
of health care databases and related software tools developed through 
a federal-state-industry partnership to build a multistate health data 
system for health care research and decision making. These databases 
include clinical and nonclinical information, such as charges for all 
patients regardless of payer by various regions and areas in the 
United States. We did not include this project in our study because it 
did not meet our definition of a price transparency initiative. 

[23] Specifically, these measures are part of AHRQ's Talking Quality 
program which provides guidance for sponsors of consumer reports on 
health care quality. The specific measures cited above relate to the 
Institute of Medicine's six domains of health care quality, which 
includes patient safety, effectiveness, patient-centeredness, 
timeliness, efficiency, and equity measures. 

[24] For more information on our work on value in health care, see 
GAO, Value in Health Care: Key Information for Policymakers to Assess 
Efforts to Improve Quality While Reducing Costs, [hyperlink, 
http://www.gao.gov/products/GAO-11-445] (Washington, D.C.: July 26, 
2011). 

[25] See, for example, E.A. Halm, C. Lee, and M.R. Chassin, "Is Volume 
Related to Outcome in Health Care? A Systematic Review and 
Methodologic Critique of the Literature" Annals of Internal Medicine, 
vol. 137, no. 6 (2002). 

[26] Exec. Order No. 13,410, 71 Fed. Reg. 51,089 (Aug. 28, 2006). The 
executive order also directed agencies to improve usage of health 
information technology, implement programs to measure quality of 
services, and identify and develop approaches that facilitate high- 
quality and efficient health care. 

[27] National Conference of State Legislatures, State Legislation 
Relating to Transparency and Disclosure of Health and Hospital Charges 
(Updated December 2010), accessed June 9, 2011, [hyperlink, 
http://www.ncsl.org/default.aspx?tabid=14512]. 

[28] Colo. Rev. Stat. § 6-20-101 (2011), S.D. Codified Laws § 34-12E-8 
(Michie 2010). 

[29] Me. Rev. Stat. Ann. title 22 § 8712(2) (West 2011), Minn. Stat. § 
62J.82 (2011). 

[30] See [hyperlink, http://healthcarebluebook.com/] and [hyperlink, 
http://www.pricedoc.com/] for more information. 

[31] See, for example, Congressional Research Service, Does Price 
Transparency Improve Market Efficiency? Implications of Empirical 
Evidence in Other Markets for the Health Sector, RL34101 (Apr. 29, 
2008); and Paul Ginsburg, "Shopping for Price in Medical Care," Health 
Affairs, vol. 26, no. 2 (2007). 

[32] See, for example, The Commonwealth Fund Commission on a High 
Performance Health System, Data Brief - Health Care Opinion Leaders' 
Views on the Transparency of Health Care Quality and Price Information 
in the United States (New York: The Commonwealth Fund, November 2007). 

[33] See for example, Paul Ginsburg, "Shopping for Price in Medical 
Care," Health Affairs, vol. 26, no. 2 (2007). 

[34] See appendix I for the information we obtained when contacting 
selected providers about the price of selected health care services. 

[35] For more information, see "The Opportunity of Price 
Transparency," Healthcare Financial Management Association (2007): 4. 
The Healthcare Financial Management Association is an organization 
that seeks to provide education, analysis, and guidance, among other 
things, to health care finance professionals. 

[36] For example, officials from one insurance company said one of the 
contractual obligations with a provider states that the insurer is 
prohibited from disclosing specific negotiated contract rates to its 
members, unless such information is provided in an explanation of 
benefits or through calls placed individually to the insurer's member 
services department. 

[37] Although the insurance officials said that some providers impose 
contractual obligations that restrict the disclosure of negotiated 
rates, officials from one insurance company told us that they were 
able to negotiate their contracts with providers without such 
contractual obligations by explaining the methodology used to develop 
and present price information to consumers. 

[38] Many states have adopted the Uniform Trade Secrets Act, proposed 
by the Uniform Law Commissioners, which protects proprietary 
information. Uniform Law Commission, Trade Secrets Act, accessed July 
14, 2011, [hyperlink, 
http://www.nccusl.org/Act.aspx?title=Trade%20Secrets%20Act]. States 
that have not adopted the Uniform Trade Secrets Act may have similar 
laws that protect proprietary information from being misappropriated. 

[39] According to the Department of Justice, the three major federal 
antitrust laws are the Sherman Antitrust Act, the Clayton Act, and the 
Federal Trade Commission Act. In addition, many states also have 
antitrust laws. 

[40] However, these insurance officials agreed that antitrust 
restrictions do not prevent the sharing of negotiated rates and other 
components of complete cost estimates with their members. 

[41] See U.S. Department of Justice and the Federal Trade Commission, 
Statements of Antitrust Enforcement Policy in Health Care (1996). 
According to FTC and DOJ guidance, providers may act individually to 
provide price information to a purchaser without concern; however 
under certain circumstances, if they act collectively it may raise 
antitrust concerns because it may lead to collusion. 

[42] While careful adherence to the guidelines will usually not 
generate FTC or DOJ enforcement action, both agencies have made clear 
that each case or business practice requires an analysis of the 
particular facts and circumstances involved. To the extent that any 
uncertainty exists, a provider or other entity may take advantage of 
DOJ's expedited business review procedure or FTC's advisory opinion 
procedure for guidance in order to alleviate antitrust concerns. 

[43] New Hampshire's and Massachusetts' claims data include all 
payments for that service contributed by private health insurance 
plans and their members, as well as payments from self-insured plans 
for state government employees and their members. 

[44] The selected price transparency initiatives use different terms 
to refer to what we describe as the health care "services" for which 
consumers can look up price information. 

[45] In some cases, the state law specified the number or types of 
services made available by the price transparency initiative. See, 
e.g., Cal. Health & Safety Code § 1339.56(a) (2008), Fla. Stat. Ann. § 
408.05(3)(k)(4) (West 2011). 

[46] Wisconsin's price transparency website, called PricePoint, has 
served as a model for other states. Since its launch, WHA has been 
hired by at least 16 states to develop PricePoint websites for their 
initiatives. 

[47] See Cal. Health & Safety Code §§ 1339.56(c) (2008), Fla. Stat. 
Ann § 408.05 (3)(k)(4) (West 2011). Florida's initiative provides a 
disclaimer that patients rarely are required to pay billed charges 
without any discounts and this type of price information may not be 
the most meaningful indicator of what the consumer can be expected to 
pay. Similarly, California's initiative acknowledges that the charges 
do not reflect how much the hospital is typically paid for a service 
because the discounts have not been applied. 

[48] Health care claims data must be submitted to a state agency and 
such information was then added to the state's price transparency 
initiative. See Mass Regs. Code tit. 129 § 2.05(3) (2009). 

[49] At the same time, CMS officials described reliance on Medicare 
payment data as a weakness of their initiative because consumers do 
not know how to understand and use that price data. 

[50] See N.H. Rev. Stat. Ann. §§ 420-G:11, 420-G:11-a (2011). APCD is 
a database of payment reimbursement records to providers that may 
include claims from private insurance company payers and their members 
and public payers (Medicare and Medicaid). According to the APCD 
Council, as of November 2010, 13 states, including Massachusetts, are 
using or in the process of developing APCDs. 

[51] Although presenting prices as ranges, rather than single point 
estimates, may be useful for avoiding proprietary concerns, ranges may 
also be so broad that they lose the utility for meeting consumers' 
needs to compare prices and anticipate health care costs. 

[52] These nonprice data, such as the frequency or quality of a 
provider in performing a procedure, is often gathered from national 
sources, such as WebMD, CMS, and AHRQ, or directly from providers' 
data submissions, such as data submitted to state agencies, which may 
vary based on the states' reporting requirements. 

[53] Since New Hampshire uses claims data over a year old, officials 
adjust the claims' prices across the board with a 5 percent increase 
for every year to account for an estimated annual rate of inflation in 
medical costs. 

[54] Fla. Stat. Ann § 408.061(c) (West 2011). 

[55] Furthermore, although Massachusetts has access to claims data 
that in some cases provide all associated costs, such as physician 
fees, for a specific health care service, officials there said that 
they currently lack the technical capability to identify from the 
claims data which hospital and physician fees should be linked. They 
noted that insurance plans are not consistent in how they report 
physician fees in the claims data. 

[56] Anthem officials said that they are exploring the possibility of 
developing an out-of-pocket cost calculator for their consumer 
initiative. 

[57] We selected a health care market in Colorado because this state 
requires certain providers to respond to consumers' requests for price 
information, but does not restrict how consumers may request such 
information. For more information, see Colo. Rev. Stat. § 6-20-101 
(2011). We did not evaluate the effectiveness of the law. We 
specifically selected the Denver health care market, as defined by a 
hospital referral region, because it was the health care market in 
Colorado with the most hospitals with zip codes in Colorado. A 
hospital referral region, as defined by the Dartmouth Atlas of Health 
Care, represents a regional health care market. Furthermore, we 
determined that the Denver health care market did not have any 
characteristics that would make it particularly unique compared to 
other health care markets in the United States. 

[58] For purposes of this study, we contacted selected providers using 
contact information from the Centers for Medicare and Medicaid 
Services' (CMS) Hospital Compare database (for hospitals) and the 
National Provider Identifier Registry (for primary care physicians). 
We excluded hospitals and physicians with addresses located outside of 
Denver, Colorado, for the purposes of this study. We contacted 19 
hospitals because there were only 19 hospitals in the Denver, 
Colorado, hospital referral region that provided knee replacement 
surgery, according to CMS's Hospital Compare database. For primary 
care physicians, we randomly selected a nonrepresentative group of 20 
physicians with a specialty such as internal medicine, family 
medicine, and general practice to be a comparable sample size to that 
of the hospitals. 

[59] According to the American Medical Association, CPT is a medical 
nomenclature used to report medical procedures and services under 
public and private insurance programs. 

[60] According to Hospital Compare, CMS's quality and price 
transparency initiative, the median Medicare payment to hospitals 
within 25 miles of Denver, Colorado, for a major joint replacement or 
reattachment of a lower extremity without major complications or 
comorbidities ranges from $446 to $18,668. According to CMS officials, 
there may be a wide range of median Medicare payments to hospitals for 
this health care service because the data provided in Hospital Compare 
include cases in which Medicare was only responsible for a portion of 
the payment. Because these cases do not reflect the full amount paid 
for a service, CMS officials stated that they plan to remove these 
cases from the data in October 2011. 

[61] According to Medicare.gov, Medicare patients may receive two free 
diabetes screening tests per year and they generally have to pay 20 
percent of the Medicare-approved amount for the doctor's visit. 

[End of section] 

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