Price Transparency - Focus on Payers

Price transparency involves informing, preparing, and involving individuals about treatment costs before receiving them. It essentially improve healthcare standards and encourage individuals to get the right treatments without intentional or unintentional delays. In the United States, health spending was found to have increased by 2.7% in 2021 to $4.3 trillion or $12,914 per capita1. While healthcare is expensive in the US, it is also one of the most profitable businesses worldwide. However, it was observed that health spending was 18.3% of GDP in 2021 compared with 19.7% of GDP in 2020[1].  

Transparency is vital for payers, it's an important part of the service they offer to their members in terms of funding treatments. Most of the individuals expect that their payers provide transparency. This could positively impact the healthcare benefit choices they make and, indeed, the utilization of services[2].  

The Centers for Medicare and Medicaid Services (CMS)  reinforced the Hospital Price Transparency Final Rule that went into effect on 1 January 2021 attempts to make price information in healthcare readily available and accessible to consumers3. The policy also emphasized on payers which stated, "Hospitals are required to post via machine-readable files five different "standard charges publicly": gross charges;” payer-specific negotiated rates”; de-identified minimum and maximum negotiated rates; and discounted cash prices." To help consumers improve their understanding of costs, the CMS also issued a rule that highlights the transparency in coverage in October 2020. This was in an attempt to unveil the out of pocket expenses thus reducing the financial burden of the individual and their families and also encouraging payers to comply to transparency. 

Over 900 health insurance companies operate throughout the US. There are several payers in play throughout the healthcare industry. Of these, 67.3% and 34.4% work with private and public healthcare services, respectively[4] . The payers have their own share of difficulties and challenges in the industry. They often deal with issues such as consumer education, providers entering the payer space, providers consolidating, fewer medical professionals to look into cases, rise in employer self-insurance and systems integration. These issues must be looked into to ensure optimal compliance of payers[4]. 

Improving payer compliance without causing market disruption is a major challenge. Compliant pricing, patient friendly engagement tools, predictive modeling and customer engagement protocols are various strategies that are being used to improve price transparency from the payers perspective. Government policies have been a constant effort to improve price transparency at various levels, including the payers; despite this progress, payers' price transparency data may need to be more user-friendly, say researchers[5]. However, the latest reports suggest that payer compliance has been increasing at a faster rate[6].  

The CMS (Centers for Medicare & Medicaid Services) continuously engage in efforts to ensure compliance of hospitals with the price transparency requirements[7]. This will undoubtedly have a positive impact on compliance to treatment, thus revolutionizing the face of the healthcare industry in the US.  


  1. Mortensen K, Dean EB, French MT, Wang N, Chen J. Trends in Health Care Utilization and Expenditures in the United States Across 5 Decades: 1977-2017. Med Care. 2021;59(8):704-710. doi:10.1097/MLR.0000000000001557 

  2. Linde S, Egede LE. Hospital Price Transparency in the United States: An Examination of Chargemaster, Cash, and Negotiated, Price Variation for 14 Common Procedures. Med Care. 2022;60(10):768-774. doi:10.1097/MLR.0000000000001761 

  3. Issa TZ, Lee Y, Mazmudar AS, et al. Evaluation of Hospital Compliance With Federal Price Transparency Regulations and Variability of Negotiated Rates for Spinal Fusion [published online ahead of print, 2023 Apr 3]. J Am Acad Orthop Surg. 2023;10.5435/JAAOS-D-23-00053. doi:10.5435/JAAOS-D-23-00053 

  4. Herzlinger RE. Consumer-driven health care: implications for providers, payers, and policy-makers. Healthplan. 2003;44(6):26-29.  

  5. Frank Diamond. Payers' price transparency data still not user-friendly, say researchers. Fierce Healthcare. 2023. 

  6. Dave Muoio. Report: Hospitals, payers making strides on price transparency compliance. Fierce Healthcare. 2023. 

  7. Loccoh EC, Khera R, van Meijgaard J, Marsh T, Warraich HJ. Hospital Adherence to the Federal Price Transparency Mandate: Results from a Nationally Representative Sample [published online ahead of print, 2023 Jan 17]. J Gen Intern Med. 2023;10.1007/s11606-023-08039-0. doi:10.1007/s11606-023-08039-0 


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