Imagine if you needed a planned surgery and learned it would cost $25,000 less if it was performed at a top tier hospital close to where you intended to seek care? How would you feel if you learned that your health plan pays almost 70% more than others to deliver a baby at the hospital where your OBGYN practices? In the past several years, consumers and employers have gained access to eye-opening pricing data that should help patients to shop for more affordable care and employers be more informed, effective purchasers. Yet, this data remains too hard to access, challenging to analyze, and complicated to act upon.

President Trump recently issued an Executive Order directing the Secretaries of the Treasury, Labor, and Health and Human Services to strengthen regulations intended to make healthcare prices and payments more transparent. For several years, hospitals and insurance companies have been required to publicly post their prices. But many have chaffed at these requirements, leaving healthcare price data incomplete, hard to use, or missing entirely. The administration’s executive order is an opportunity to realize transparency’s potential in more functional and efficient healthcare markets.

Through our work that targets the drivers of healthcare costs in the U.S., the Peterson Center on Healthcare understands the importance of price data in helping employers be more informed healthcare purchasers on behalf of their employees. President Trump signed legislation in his first term that aimed to provide employers with access to their claims data and provide consumers with price information in advance of receiving care. But a project led by the Purchaser Business Group on Health (PBGH) is finding that employers’ access to claims data and price comparisons are restricted by insurers and third-party administrators due to the data gaps and complexity of price transparency files. A policy brief recently published by the Peterson-KFF Health Tracker provides examples of health plan data that is incomplete, missing, and—when available—unstructured and confusing. Meanwhile, research recently published in Health Affairs shows that while insurers’ price data could provide employers with insights into their spending, preparing that data for analysis takes months of painstaking work.

As the departments respond to the president’s executive order, policymakers should consider a new framework that makes clear, actionable health data available to employers and consumers:

• Enforce compliance. So far, few enforcement actions have been undertaken against hospitals and no actions have been pursued against insurers or other payers for failing to comply with existing transparency requirements. By tracking and reporting compliance, enforcing penalties, and requiring corporate leaders to certify compliance, new regulations can ensure that transparency becomes a reality.
• Simplify and standardize large data files. Insurers spread out their price reporting over hundreds of thousands of separate files that are hard to find on their websites. Standardizing and streamlining how data is structured and reporting its location to Center for Medicare & Medicare Services (CMS), can help employers and data vendors find and use price information.
• Expand price reporting requirements. Currently, only hospitals and commercial health plans, which includes self-insured employers, are required to report prices. Transparency reporting should expand to more providers, including surgery centers, labs, and imaging facilities, and potentially others.  Meanwhile, all plans that provide health coverage should be required to report prices, including all Medicare and Medicaid plans. Further, the administration should implement requirements for health plans to make negotiated prices for prescription drugs available.
• Enhance price data with volume information. More than 96 percent of codes in payer datasets are empty “ghost codes,” i.e. negotiated prices for services that providers never actually perform, such as dermatologists’ prices for heart surgeries or oncology clinics’ prices for bunion removal. To eliminate those irrelevant ghost codes, datasets should include information about how many of each healthcare service is provided. This small action would eliminate irrelevant services that have never been performed, slimming data files down to useable sizes.
• Enable consumers to shop for healthcare services. A provision of the No Surprises Act, the “Advanced Explanation of Benefits” (AEOB), would make personalized cost estimates available to privately insured patients before they receive scheduled care. This provision has yet to go into effect. The administration should work quickly to implement the requirements to issue the Advanced Explanation of Benefits (AEOB) so that consumers can use these personalized cost estimates to shop for care with information to understand their financial obligations given their health plan benefits.
• Strengthen employers’ access to their claims data. Employers need their claims data to understand and control their own spending and their employees’ costs. The 2021 Consolidated Appropriations Act was supposed to provide employers with better access to their claims data, but that law has not been sufficient to compel payers to release complete data to employers on a timely basis. Guaranteeing employers unfettered access to claims data may require legislative or regulatory action.

The administration can equip employers with information they need to purchase affordable, quality healthcare for their employees. And employees, in turn, can have a better way to access information about costs associated with their care. Finishing the job on price transparency has the potential to help employers and employees alike save money so that they can save for and spend on the investments and priorities that matter most.