Speeches & Floor Statements

Reducing Health Care Costs: Examining How Transparency Can Lower Spending and Empower Patients

Posted on September 18, 2018

Opening Statement

The Senate Committee on Health, Education, Labor and Pensions will please come to order.

Senator Murray and I will each have an opening statement, and then I will introduce the witnesses.

Then we will hear from the witnesses and senators will each have 5 minutes to ask questions.

As any American, even the Secretary of the Department of Health and Human Services, knows, it can be very difficult to find out how much a simple health care test will cost, before a doctor’s visit.

Secretary Azar recently told the story of his doctor ordering a routine echo cardio stress test.  

He was sent down the street and admitted to the hospital, where, after considerable effort on his part, he learned the test would cost him $3,500.

After using a website that compiled typical prices for medical care, he learned the same test would have cost just $550 in a doctor’s office.

Secretary Azar said that consumers are so in the dark they often feel “powerless.”

The Internet has made it easier for consumers to know more about what they want to purchase before they actually buy it. 

You can easily read an online review and compare prices for everything from a coffee maker to a new car.

This is true for everything else but not for health care – the cost of health care has remained in a black box. 

Any one of us who has received a medical bill in the mail has wondered what you’re actually paying for.

For years, patients were more or less okay with not knowing the true cost of their health care because insurance companies, or the government, paid most of the bills.

However, as premiums have increased, more Americans are covered by plans with high deductibles, which means they are often paying lower monthly premiums in exchange for spending more out-of-pocket when they go to the doctor or fill prescriptions.

According to the Kaiser Family Foundation, 51 percent of all single covered workers  in 2017 had a deductible of at least $1,000, which is Kaiser’s threshold for a high deductible. This is an increase from 34 percent in 2012.

And because Americans themselves are footing more of their health care bills, more are showing an interest in shopping around as Secretary Azar did when he had his heart test.   

Today’s hearing, the fourth in a series on reducing the cost of health care, is an opportunity to learn how we can improve what information is easily available about the cost and quality of health care, so patients can make the best health care decisions for them, their families, and their wallets.

Without better information, health care stays in that black box, making it hard for Americans to be good consumers, make good decisions, and pay reasonable amounts for necessary health care.

Senator Paul has talked about how, with an elective surgery such as Lasik, a patient is more likely to call doctors’ offices to find the best price, calling an average of four different doctors to find the best price for the corrective eye surgery.

As patients have shopped around for Lasik, the price started to dramatically decrease – it has gone down 75 percent over the last 15 years, according to Senator Paul.

The black box also disguises the quality of care. This is important because we often think high cost equals high quality.

For example, Stephen Joel Trachtenberg, who has spoken freely about raising tuition to raise the profile of George Washington University while he was President, has said, “People equate price with the value of their education.” 

While the price of tuition – unlike health care -- is easily available on universities’ websites, deciphering the quality of education and health care is hard.

Improving transparency in health care prices and quality is an area where the private sector and states are largely leading the charge.

For example, medical centers like the Surgery Center of Oklahoma and St. George Surgical Center, one of our witnesses today, list the prices for the surgeries they offer on their website so patients know up front how much their surgeries will cost.  

Healthcare Bluebook, represented by another witness, is a tool that helps employees find the best price for the highest quality care in their area, using their employer sponsored insurance.

This is useful to lower costs because, for example, the amount a patient pays for cataract surgery in Memphis can range from as little as $2000 to more than $8000.

In 2017, the state of Maine passed a bill requiring health insurers to split the savings with a patient if the patient shops around and chooses a doctor that is less than the average price the insurer pays.   

In Oregon, the state compiles data on insured residents and uses this information to run a tool similar to Healthcare Bluebook that allows patients to compare the costs of procedures at different hospitals.

While the private sector is largely leading the charge on making health care information more easily available, the federal government can also play a role to help patients, and witnesses today can inform Congress about steps we can take.

Secretary Azar told the story of finding out the price of his heart test in speech announcing the Administration would focus on increasing price transparency.

For example, in April, Centers for Medicare and Medicaid Services Administrator Seema Verma announced that by January 2019 hospitals that participate in Medicare or Medicaid must list their current standard prices online.

In an age when you can compare different prices and check a dozen reviews when shopping for a new BBQ grill, Americans should be able to know the cost of their health care.