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Pulling back the curtain on health care prices

Texas 2036’s new online tool reveals wide variation in prices for health care services – and significant information gaps.

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By Dr. Holly Heard and Charles Miller Texas 2036

Heard is the vice president of data and analytics at Texas 2036. Miller is a senior policy advisor at Texas 2036.

Health care prices can vary widely in Texas – even for the same service at the same hospital. And when those prices are not transparent, it’s not just hard for consumers to know what they’re going to end up paying, it’s hard for employers and institutional payers to design high-value benefit plans.

As part of an effort to evaluate the true prices of various health care services around the state, we started gathering statewide data into a new online dashboard to help visualize price discrepancies that drive higher government and employer spending, insurance costs, out-of-pocket spending and health-related inflation.

But what we also found were how few hospitals are providing pricing data in compliance with transparency laws.

Federal law required hospitals operating in the United States to provide clear, accessible pricing information about their services beginning January 1, 2021. Texas passed a similar law that went into effect in September of that year.

The data available as of this spring suggests that only about 31% of Texas hospitals are mostly compliant with state and federal law.

“But even when data might be available, a lack of standards makes it really difficult to utilize. There’s a lot of room for improvement.”

To help facilitate those improvements, we created a set of recommendations that will make the data more accessible, including the adoption of a clear data standard that could encourage and improve reporting and provide researchers with better data for analysis.

“These data files offer the potential for a unique and vital reference point for Texas legislators and leaders as they consider options for reducing health care spending while maintaining high levels of care and access in every part of Texas.”

Working with data science firm January Advisors, we attempted to locate and download data for 644 hospitals in Texas. Analysts then reviewed and classified each of the data files.

As of April 2022, our key findings include:

  • Only 65% of hospitals had made pricing data available in a way that we were able to access it.
  • 31% of hospitals were mostly compliant with the law, meaning that they listed standard charges, cash prices, minimum and maximum negotiated rates, and insurer-specific rates in their data. It is unclear whether the lists include all services offered at each hospital.
  • Many large hospital systems in Texas are missing key pieces of data, such as insurer-specific rates.
  • Comparisons between hospitals are often difficult or impossible due to issues with the availability and formatting of hospital codes and insurer-specific information.

Most insurers and employers were required to disclose their own transparency files as of July 1, 2022, and beginning in 2023 will be required to provide their enrollees with consumer-friendly comparison shopping tools that show consumers their out-of-pocket costs for specific providers.

The disclosure of health care pricing data has the potential to significantly improve our understanding of health care markets. By spotlighting and addressing market inefficiencies, we hope to help lawmakers and all Texans – especially those communities disproportionately affected by high health care prices – get better care at a better price.

To learn more about health care pricing transparency in Texas and access the data, visit: texas2036.org/health-price-transparency/