Unlocking the potential of healthcare price transparency data

Healthcare price transparency has had a few years to develop since hospitals were first required to publish machine-readable files in 2021. This requirement was aimed at helping consumers compare prices and make informed decisions with the potential to promote competition among providers. 

But in a recent article published by Health Affairs examining enforcement, the transparency rules are slowly making limited changes in the industry, with the potential for more to be done. A Dec. 4 Health Affairs webinar featured an expert panel offering in-depth discussion of compliance challenges and innovations in leveraging this data. 

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• MGMA Rates, powered by HexIQ, offers member-exclusive access to all negotiated rate information for established patient visits, helping you benchmarks your reimbursements against those of similar practices and providers in your area. 
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Why price transparency matters 

Panel moderator Sabrina Corlette, JD, research professor at Georgetown University and founder of the Center on Health Insurance Reforms, highlighted the urgency of addressing healthcare affordability. She noted that the average annual premium for employer-sponsored insurance surpassed $25,000 in 2024, marking a 7% increase from the previous year. Additionally, high out-of-pocket costs have left 66% of Americans with employer-based insurance underinsured.  

Corlette echoed the famous point made by economist Uwe Reinhardt — "It's the prices, stupid" — emphasizing that prices, not utilization, drive healthcare spending growth. Despite skepticism about its immediate impact, price transparency remains a bipartisan initiative with the potential to inform consumers, employers, and policymakers. 

Status of price transparency compliance 

Article co-author Ge Bai, PhD, CPA, professor of accounting at the Johns Hopkins Carey Business School and professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health, presented some key findings: 

• Compliance has improved since the transparency rules took effect — rising from 55% in mid-2022 to 88% by late 2023, according to CMS data.  
• However, stricter analyses by advocacy groups show only 21% of hospitals fully comply.  
• Bai identified key enforcement gaps, including delayed penalties, a focus on large hospitals, and inefficiencies in review processes.  
• Automation has enhanced enforcement capacity, with CMS now completing 200 reviews monthly. 

Bai emphasized that without stronger enforcement and broader compliance, the transformative potential of price transparency to foster competition and control costs cannot be realized. 

Innovations at the state level 

Colorado has emerged as a leader in price transparency, passing Senate Bill 24-080 to enhance federal requirements. Colorado Insurance Commissioner Michael Conway explained how the state’s law mandates insurers to provide data tailored for state-specific analysis. This helps policymakers address regional healthcare challenges and build actionable tools for consumers and regulators. 

Conway noted that transparency is only as valuable as the actions it enables: “We’re using this data to inform rate reviews, optimize our public option plans, and potentially guide antitrust enforcement.” He encouraged other states to build on Colorado’s approach, stressing that state-level initiatives can address gaps in federal oversight. 

Employer applications and challenges 

Employers, who cover more 150 million Americans, are increasingly interested in leveraging transparency data to manage costs. Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, highlighted promising strategies such as direct contracting with providers and creating narrow networks. These efforts depend on understanding negotiated rates to identify cost-effective options. 

However, Gremminger identified significant barriers. Employers often struggle to access their own claims data, hampering their ability to validate costs. "It’s ironic," he said, "that it’s easier to see what others are paying than to get details about what we’re paying." Employers face additional challenges in markets dominated by consolidated health systems, where competition is limited. 

Research insights and emerging opportunities 

Jean Abraham, PhD, professor and division head, Division of Health Policy & Management, University of Minnesota, and Steve Parente, PhD, MPH, MS, professor of health finance, University of Minnesota, detailed how researchers are exploring price transparency data to uncover market dynamics and inform policy. Early studies have focused on compliance and pricing variation across services and regions. Abraham emphasized the need to connect prices with quality metrics, enabling value-based consumer decisions. 

Parente highlighted the technical challenges of working with insurer data files, which can require supercomputers to process vast quantities of information. He underscored the potential for detecting anti-competitive behaviors, such as dynamic pricing adjustments, by analyzing monthly pricing updates. He also cautioned against expanding transparency to pharmaceuticals without clear objectives, given the complexity and real-time variability of drug pricing. 

Future directions: Expanding transparency and addressing gaps 

Panelists identified several opportunities to expand the impact of transparency: 

1. Enhanced consumer tools: Current platforms like Turquoise Health provide some insights but lack comprehensive, user-friendly tools that integrate prices with quality and benefit design. Gremminger suggested that models like UnitedHealth’s Surest app, which adjusts consumer costs based on provider quality and efficiency, offer a glimpse into the future. 
2. Pharmaceutical pricing: While expanding transparency to drug prices has been discussed, Parente warned that the dynamic nature of pharmaceutical pricing poses significant challenges. Any efforts should clearly define what data is needed and how it will be used. 
3. National All-Payer Claims Database (APCD): Employers and researchers advocated for a national APCD to complement transparency data. Such a database could address gaps in self-insured employer data and enhance analysis of market trends. 
4. Stronger state-federal collaboration: Conway and other panelists emphasized the need for federal policymakers to support state efforts through clearer guidance and technical assistance, ensuring consistent enforcement and usability. 

Conclusion 

Healthcare price transparency represents a step toward addressing affordability and market dysfunctions. While challenges remain, the potential benefits for consumers, employers, and policymakers are enormous. But as panelists suggested, transparency alone won’t solve all problems — but without it, meaningful progress is likely impossible. 

To fully realize the promise of transparency, stakeholders must invest in improving data quality, creating actionable tools and addressing structural barriers. Colorado’s example offers a roadmap for leveraging transparency to advance state-specific goals, while continued research and collaboration can unlock further opportunities to reduce costs and improve healthcare outcomes.