Hospital price transparency: How employers can take advantage
It’s open enrollment season, a time when many Texans are choosing health insurance plans offered by their employers for the year ahead. For many families, this comes with tough decisions about balancing coverage options with affordability.
While one of the biggest drivers of rising premiums and out of pocket expenses is hospital prices, those prices are not all the same. And the latest data shows how to take advantage of new transparency tools to create savings.
Across Texas, the cost of the same medical procedure can vary dramatically from one hospital to another, even within the same city. It can even vary substantially within the same hospital, depending on who is paying.
Take childbirth, for example. In Central Texas, the median price for vaginal delivery is $2,355. In one extreme example, though, the price can rise as high as $11,804. That’s a difference of over $9,400! That’s not a typo. For another common procedure, knee arthroscopy to repair knee injuries, the median price is $2,798. But in another jaw-dropping example, the price for the procedure can run as high as $70,200.
Making informed decisions through better price transparency
This price variation underscores an important fact: not all care is priced the same at every facility, even when the quality is comparable. The good news? With better price transparency, Texas employers and insurance companies now have tools to make informed decisions when negotiating health insurance plans. And they should be passing this information along to patients to help them make more informed choices about where to get the best bang for their buck. With more awareness, individual Texans should know that shopping for hospital services can make a difference to their pocketbooks.
Hospital price transparency laws passed in 2021 have helped shine a light on these discrepancies. While compliance was initially slow — only 31% of hospitals posted their prices in early 2022 — Texas has come a long way since then. By this year, 81% of hospitals were providing pricing data.
Why does this matter during open enrollment? If employers make more informed choices, that can have a significant impact on the premiums and plans that are offered next year. Armed with more transparent pricing data, Texas policymakers can also help ensure our health care market is a healthy and competitive one and that affordable, high-quality care remains a priority.
At Texas 2036, we’ve made it easy to see many of these price differences. Our interactive dashboard at www.texas2036.org/hospital-price-transparency provides a snapshot of the range of prices offered by Texas hospitals for a variety of common procedures like childbirth and MRIs.
Texans have always been problem solvers. Just as we’ve tackled other big challenges, our state can innovate and put into place policies that ensure our health care market can respond to the rising price of health care.
By embracing transparency, we can help Texans spend less without compromising care.