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Oregon consumers are paying more and have less ability to make informed decisions about their health care due to opaque prices for health care services, according to a report released today by OSPIRG Foundation and Frontier Group. The report provides an in-depth analysis of the power of price transparency to contain costs and improve the experience of care for patients and health care providers, and identifies evidence-based policies and strategies for Oregon to advance health care price transparency. The report is available at the following URL: https://ospirgfoundation.org/reports/orf/improving-price-transparency
“Most of us wouldn’t buy a toaster without knowing how much it costs. But you might have to buy a new knee, or an expensive procedure, without any clue what your bill is going to be,” said Jesse O’Brien, OSPIRG Foundation Policy Director and co-author of the report. “Consumers have the right to know how much they’re going to have to pay, especially as their share of the medical bills keeps growing. Price transparency can help contain the cost of health care.”
The report finds that when patients use health care price information to choose less expensive providers, they can reduce their health care spending. Price transparency also helps health care providers and insurers to contain overall health care costs.
"Doctors influence or make a large share of health care decisions, but they rarely know how much that care will cost," said Elizabeth Ridlington, Policy Analyst with Frontier Group and co-author of the report. "Research at hospitals shows that when doctors know the cost of the lab work and imaging tests they’re ordering, they spend health care dollars more wisely."
But good implementation is important. Poorly implemented price transparency could have adverse consequences, including reduced price competition in health care markets and increased health care spending.
The report recommends a range of policy options to improve price transparency for Oregon consumers without triggering adverse unintended consequences, including measures to give consumers a price estimate at the “point of purchase,” a ban on so-called “gag clauses” that prohibit disclosure of negotiated health care prices, and a range of improvements to the state’s existing all payer-all claims database.
“Somehow our society is able to work out and tell us all kinds of complex costs – but not medical ones. Price transparency can make a real difference for consumers,” said O’Brien. “We still need to solve the serious problem of waste in the medical system, but in the meantime we could use some sunshine on health care pricing. According to one estimate Oregonians could have saved $80 million or more in 2014 with stronger price transparency. That’s nothing to sneeze at.”
OSPIRG Foundation is a nonprofit, nonpartisan statewide consumer organization. Please visit us at ospirgfoundation.org
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