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Nationwide Claims Database Could Shed Light on Secret Hospital Prices

The opaque hospital pricing system leaves patients in the dark and unable to make informed decisions, but a recent legislative proposal could help strip secrecy from the system through the creation of a federal all-payer claims database.

A hospital room
A doctor and nurse confer inside a room used for flu patients at a Georgia hospital in January 2018. (Robert Ray/The Associated Press)

Price negotiations between health care providers and insurance companies are often kept confidential, making it difficult for researchers and policymakers to know what influences those prices — and ultimately how to make health care more cost-effective and accessible. But consumers have an opportunity to help make the health pricing system more transparent by supporting the Lower Health Care Costs Act, which requires all health plans to disclose and report insurance claims across the country.

The legislative proposal was introduced by Lamar Alexander (R‑Tenn.), chairman of the Senate Committee on Health, Education, Labor and Pensions, and its ranking member, Patty Murray (D‑Wash.). It is significant because it calls for the creation of a federal all-payer claims database — or APCD — that collects health insurance claims data from public and private insurance payers across the country.

APCDs are nothing new — in fact, they have proven to be very effective at the state level because they collect demographic and diagnostic data on patients, as well as treatments paid for by insurance. But a comprehensive nationwide database of insurance claims would be a novel tool and could be a game changer for researchers and policymakers — and eventually benefit the patient.

Here’s how:

  • More comprehensive research and data are needed to shed light on quality and costs of care, assess low value-care, and study the performance of new models to reduce health spending.
  • Current federal rules require transparency only about hospitals’ official price list, which often has nothing to do with what insurance plans and patients actually pay. National studies on health care costs have historically relied on Medicare data, which is limited since it mainly yields information about older populations. State APCDs — which have been used for a variety of health studies — are limited and may exclude claims from self-insured employer-sponsored plans due to a 2016 Supreme Court decision that barred required reporting at the state level.
  • Thus, a national APCD would be an enormous leap forward for researchers and their ability to inform policy making. It would enable a new generation of health research that would inform policy ideas that make pricing more effective and efficient.

You can support the creation of a federal APCD by:

    • Contacting your members of Congress.
    • Encouraging policymakers to pass comprehensive solutions to lower health care costs.
    • Signing the letter below in support of a national APCD.

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