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Work Starts On State's Price Transparency Database

May 18, 2017
Originally published on May 18, 2017 9:32 am

For the past year, WUSF has invited you to share the cost of your health care -- not your insurance premiums, but the cost of the care itself. Our PriceCheck project is a database made up of charges shared by health care facilities and costs contributed by you.

Before the end of the year, a separate and state-required health care price transparency effort is expected to be launched.

The nonprofit Health Care Cost Institute signed a contract with Florida to build the state's database last month. 

It will use medical claims for millions of insured Floridians to calculate an average cost of about 300 of the most popular procedures and services.

The Health Cost Institute already has a national website with health costs. Florida will be its first state-specific effort.

Health News Florida’s Tom Hudson sat down with Health Care Cost Institute director David Newman to talk about price transparency. The following is a transcript of their conversation. 

David Newman: There's basically three audiences that you think of in terms of transparency. Those people with insurance, who generally have access to an insurer sponsored website where they get more specific information that is designed around their benefit and their insurance coverage. So it knows who they are, knows the nature of the insurance that they have, it knows where they are in their deductible.

You have another population out there who are uninsured, who are paying first dollar on their own, who or are in a high deductible health plan that may or may not have any information with respect to prices depending on who their carrier is.

The third audience -- is basically as I view it an important one -- is sophisticated buyers and the market being able to better negotiate with respect to prices in their community because they are repeat purchasers of this service on behalf of employees and others.

Tom Hudson: That last group includes how most Floridians get their health insurance through an employer -- half of adults in Florida get health insurance through a job.

It could be your job or a spouse’s job.

Newman went to high school in Miami Beach after his family moved here from New York in the 1960s. He's familiar with the big buyers of health insurance and health services in South Florida and it's not big companies.

Our economy is dominated by small and medium sized businesses. The big buyers of health insurance and health services for their employees are government bodies like county governments and public school districts.

David Newman: If you can get local governments, unions, to the extent that an employer is paying health benefits, groups get together and put downward pressure on prices and those prices end up on a public website, everyone in the locality benefits regardless of whether they're a shopper or not. That's the benefit of price transparency.

Tom Hudson: The difference between patients shopping for health care and employers is the ability to shop and size for consumers. Not all health procedures are shopable -- think about being hurt in a car crash or any other medical emergency. You're not going to ask about prices or maybe you don't even know what's wrong with you. How can you shop if you don't have a diagnosis?

David Newman: Price transparency from the consumer perspective is only relevant when consumers have time to shop. They understand what's wrong with them and there is variation in price in their community.

From an economist's perspective, what price transparency is likely to do is not to drive just consumer action -- and there will be activated consumers out there that wake up every Saturday morning and want to compare how prices have changed in their community. The real impact of price transparency at the end of the day is for sophisticated buyers, the community, the local governments and others to be asking questions about the prices in their community across providers and suppliers in that community.