U.S. GOVERNMENT PUBLISHING OFFICE

57–076 PDF WASHINGTON : 2024

S. HRG. 118–442

HEALTH CARE TRANSPARENCY:

LOWERING COSTS AND

EMPOWERING PATIENTS

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING

UNITED STATES SENATE

ONE HUNDRED EIGHTEENTH CONGRESS

SECOND SESSION

WASHINGTON, DC

JULY 11, 2024

Serial No. 118–21

Printed for the use of the Special Committee on Aging

(

Available via the World Wide Web: http://www.govinfo.gov
(II)

SPECIAL COMMITTEE ON AGING

ROBERT P. CASEY, JR., Pennsylvania, Chairman

KIRSTEN E. GILLIBRAND, New York

RICHARD BLUMENTHAL, Connecticut

ELIZABETH WARREN, Massachusetts

MARK KELLY, Arizona

RAPHAEL WARNOCK, Georgia

JOHN FETTERMAN, Pennsylvania

MIKE BRAUN, Indiana

TIM SCOTT, South Carolina

MARCO RUBIO, Florida

RICK SCOTT, Florida

J.D. VANCE, Ohio

PETE RICKETTS, Nebraska

ELIZABETH LETTER, Majority Staff Director

MATTHEW SOMMER, Minority Staff Director
(III)

C O N T E N T S

Page

Opening Statement of Senator Robert P. Casey, Jr., Chairman ......................... 1

Opening Statement of Senator Mike Braun, Ranking Member ........................... 2

PANEL OF WITNESSES

Chris Whaley, Ph.D, Associate Director of the Center for Advancing Health

Policy Through Research, Associate Professor of Health Services, Policy,

and Practice, Brown University School of Public Health, Providence, Rhode

Island .................................................................................................................... 4

Chris Deacon, JD, Principal Owner, VerSan Consulting, LLC, Moorestown,

New Jersey ........................................................................................................... 6

Cora Opsahl, MBA Health Fund Director, 32BJ Health Fund, New York,

New York .............................................................................................................. 8

Sophia Tripoli, MPH, Senior Director of Health Policy, Families USA, Washington, D.C. ........................................................................................................... 10

CLOSING STATEMENT

Closing Statement of Senator Mike Braun, Ranking Member ............................ 26

APPENDIX

PREPARED WITNESS STATEMENTS

Chris Whaley, Ph.D, Associate Director of the Center for Advancing Health

Policy Through Research, Associate Professor of Health Services, Policy,

and Practice, Brown University School of Public Health, Providence, Rhode

Island .................................................................................................................... 31

Chris Deacon, JD, Principal Owner, VerSan Consulting, LLC, Moorestown,

New Jersey ........................................................................................................... 38

Cora Opsahl, MBA Health Fund Director, 32BJ Health Fund, New York,

New York .............................................................................................................. 40

Sophia Tripoli, MPH, Senior Director of Health Policy, Families USA, Washington, D.C. ........................................................................................................... 42

QUESTIONS FOR THE RECORD

Chris Whaley, Ph.D, Associate Director of the Center for Advancing Health

Policy Through Research, Associate Professor of Health Services, Policy,

and Practice, Brown University School of Public Health, Providence, Rhode

Island .................................................................................................................... 63

Cora Opsahl, MBA Health Fund Director, 32BJ Health Fund, New York,

New York .............................................................................................................. 65

Sophia Tripoli, MPH, Senior Director of Health Policy, Families USA, Washington, D.C. ........................................................................................................... 69

STATEMENTS FOR THE RECORD

Statement of 75 Alliances, Unions, and Employers .............................................. 75

Statement of Patient Rights Advocate.Org ............................................................ 77

Statement of Leukemia and Lymphoma Society .................................................. 78

Statement of American Hospital Association ........................................................ 81

Statement of AHIP .................................................................................................. 85

Statement of Healthsystem Association of Pennsylvania .................................... 90

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HEALTH CARE TRANSPARENCY:

LOWERING COSTS AND

EMPOWERING PATIENTS

U.S. SENATE

SPECIAL COMMITTEE ON AGING

Washington, DC.

The Committee met, pursuant to notice, at 10:00 a.m., Room 138,

Dirksen Senate Office Building, Hon. Robert P. Casey, Jr., Chairman of the Committee, presiding.

Present: Senators Casey, Blumenthal, Warren, Warnock, Braun,

Vance, and Ricketts.

OPENING STATEMENT OF SENATOR

ROBERT P. CASEY, JR., CHAIRMAN

Chairman CASEY. Good morning. The Senate Special Committee

on Aging will come to order. Today’s hearing will examine transparency in health care, and how it affects the ability of patients to

access affordable health care. This is a very important topic as the

cost of health care continues to rise, and it is clear we must do

more, here in the Senate and throughout the Congress, to bring

down costs for the American people.

I am proud to say we have made some progress, though we have

more ground to cover, much more to do. Over the last several

years, Democrats have passed several health packages to lower

health care costs for Americans. Through the American Rescue

Plan Act, Democrats reduced health care costs by bringing down

the cost of premiums and expanding eligibility for health care coverage savings. I was proud to support the Inflation Reduction Act,

so called IRA, which is actively bringing down health care costs for

Medicare beneficiaries. It is also increasing transparency and affordability as the federal government, through Medicare, can now

negotiate prescription drug prices under the Medicare program.

The IRA capped insulin costs at $35 a month for seniors, and

then we saw insulin manufacturers extend those savings to all patients who pay out-of-pocket for insulin.

The IRA also includes a provision that caps prescription drug

costs at $2,000 out-of-pocket each year for Medicare beneficiaries.

This provision, which goes into effect this coming January 1st, will

save Medicare beneficiaries an estimated $7.4 billion in 2025 alone.

This is a lifeline for older Americans and shows us the opportunity

to help Americans without Medicare who are still subject to high

out-of-pocket drug costs.
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That is why I am introducing the Capping Prescription Drug

Costs Act with nine of my Senate colleagues. This legislation expands on the success of the IRA and extends prescription drug cost

savings to the commercial health care market by capping out-ofpocket costs at $2,000 annually for individuals and $4,000 annually

for families. Nationwide, 173 million people under the age of 65

have private health insurance either from an employer plan or in

the non-group market. This legislation, the Capping Prescription

Drug Costs Act will ensure that prescription drugs are more affordable for these tens of millions of Americans.

While we have come a long way to make health care more affordable and accessible, I look forward to hearing from our witnesses

today and discussing how transparency can shine a light on high

health care costs and ways to decrease those costs for every American.

I turn next to Ranking Member Braun.

OPENING STATEMENT OF SENATOR

MIKE BRAUN, RANKING MEMBER

Senator BRAUN. Thank you, Mr. Chairman.

Health care costs have risen astronomically from where they

were just a few decades ago, to now approaching 18 percent of our

GDP, and it has all occurred very simply, because the health care

industry has disguised itself as being part of free enterprise, which

embraces transparency, competition, no barriers to entry, and most

importantly, an engaged consumer. You know that none of that

really applies to our current industry. You heard the Chairman

talk about when you do operate like an unregulated utility you are

going to have government getting involved, so the key is do we go

there, when this place is going broke systematically over the last

decade or two, and in a place that is running $2 trillion deficits,

or do we reform the industry?

For anyone that is a CEO within the industry, I would suggest

that you do what all the rest of us have done that run businesses—

embrace competition. Deal with an engaged consumer in full transparency.

I mean, if we keep going down this trail, we are going to end up

not only exacerbating the $2 trillion deficits we currently have, it

is going to get even worse.

I was able to keep costs low in my own business. It can be done.

I was so sick and tired of hearing how lucky I was that it was only

going up five to ten percent every year. I found out how much the

insurance companies were making on then what was a 300-employee plan that hardly had any claims, but they were making a

fortune on it, and that is because even we did not have the full

breath of options, and when I found out how lucrative it was to be

in the insurance business, we self-insured, and then threw everything and the kitchen sink at prevention and wellness, and actually

on the user side only, controlled costs. My employees got every

wellness and prevention tool, and they became health care consumers, and in that method, we cut costs by over 50 percent, and

have not had premium increases in 16 years.

Industry, wake up. It can be done. We need more tools, and we

need you to get with it.
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President Trump put in place regulations requiring hospitals and

insurers to disclose prices. President Biden has continued to support it. The hospitals have tried to skirt it, mostly from the time

that happened.

Today I am releasing a report that highlights the need for Congress to enact additional transparency across the health care supply chain. This is not going to go away, and it is a single place in

our Federal Government that if we get it right we can reduce our

deficits, the government will have a bill to pay that his less, if the

providers shrink themselves down to where it is in most other

economies and maybe not do it from a command system from government but because entrepreneurism and the markets are working.

The House passed the Lower Costs, More Transparency Act.

That is a huge step to get us where we are needing to go.

I am on Health, Education, Labor, and Pensions. Another crazy

thing about this place, they have got a hearing right now. It is at

the same time this is, and we have never gotten that straight since

I have been here. I will try to jump there.

Bernie Sanders and I introduced the Health Care PRICE Transparency Act 2.0, a landmark bill to reveal health care prices for

Americans that mirrors the House bill in many ways. I want to

thank Senators Warren and Fetterman, who are members of this

Committee, for joining as cosponsors.

I want to cite someone in the audience here, Cynthia Fischer,

who has been the most passionate individual I know. She has run

a business over the years about keeping this in the limelight. It requires providers to publish actual prices, not estimates.

Another major component of the bill states that group health

plans have the right to review and audit their claims data, and we

cannot do that that has got to happen nationally, and states need

to accommodate that. This will allow self-insured employers and

unions to make changes to their plan and save money for their

beneficiaries. Our bill puts the power back in the hands of Americans, it starts to make it consumer driven, and it starts to break

up the oligopoly, the monopoly nearly, of how health care is provided currently.

I ask unanimous consent to enter into the record two statements,

one from Power to the Patient and another from Patient Rights Advocate with 75 signatures in support of this legislation.

Chairman CASEY. Without objection.

Senator BRAUN. I look forward to continuing to work with my

colleagues on both sides of the aisle to get the Health Care Price

Transparency Act 2.0 to the President’s desk.

It is time to deliver for our seniors, our families, and Americans

all across the country.

I would now like to play a video telling just one of the thousands

of stories about the impact price transparency can have on patients.

Thank you to Patient Rights Advocate for submitting this story

and for their leadership in the fight to bring power to patients.

[Video plays.]

Chairman CASEY. Thank you, Ranking Member Braun.
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I will now turn to our four witnesses. I will introduce our first

witness, and Ranking Member Braun will introduce our second and

third, and then I will introduce our fourth.

Our first witness is Dr. Christopher Whaley from Providence,

Rhode Island. Dr. Whaley is Associate Director of the Center for

Advancing Health Policy Through Research at Brown University.

He also serves as Associate Professor in the Department of Health

Services, Policy, and Practice at Brown University School of Public

Health. His research is largely centered on health care price transparency and evolving market structure and the effect of such

changes on overall health spending and quality of care for patients.

Doctor, thank you for being with us today and sharing your expertise with the Committee.

Dr. WHALEY. Thank you, Chairman Casey and Ranking Member

Braun.

Chairman CASEY. Doctor, we will just introduce all the witnesses

and then I will turn to you, if that is okay.

Senator BRAUN. It is my pleasure to introduce Chris Deacon. She

is the founder of VerSan Consulting LLC. She advocates for costeffective strategies that benefit both employers and employees. Ms.

Deacon has held pivotal roles within the State of New Jersey, notably as a director of a state employee health benefits program, and

school employee health benefit programs.

Her career in the public sector began with serving as Deputy Attorney General and then Special Counsel to Governor Chris

Christie. She earned her Juris Doctor from Rutgers School of Law.

Thank you for testifying today.

It is my pleasure also to introduce Cora Opsahl. She is the director of 32BJ Health Fund. She ensures that member and families

of the union have affordable and high-quality health care. Under

Ms. Opsahl’s leadership, the 32BJ Health Fund has saved more

than $35 million annually. That is impressive. She holds an MBA

from St. Louis University. Thank you for being here today.

I yield back.

Chairman CASEY. Thank you, Ranking Member Braun. Our

fourth and final witness is Sophia Tripoli. She is from Washington,

DC. Sophia is the Senior Director of Health Policy at Families

USA, an organization that seeks to achieve accessible and affordable health care for all Americans. Her work is largely focused on

lowering costs of health care and improving health care delivery for

Americans.

Thank you very much for being here today and for testifying and

for sharing your knowledge with the Committee.

Now we will turn to you, Doctor, for your opening statement.

STATEMENT OF CHRIS WHALEY, PH.D, ASSOCIATE DIRECTOR

OF THE CENTER FOR ADVANCING HEALTH POLICY THROUGH

RESEARCH, ASSOCIATE PROFESSOR OF HEALTH SERVICES,

POLICY, AND PRACTICE, BROWN UNIVERSITY SCHOOL

OF PUBLIC HEALTH, PROVIDENCE, RHODE ISLAND

Dr. WHALEY. Thank you. Chairman Casey, Ranking Member

Braun, and other members of the Committee, thank you for the opportunity to testify today.

My name is Christopher Whaley. I am an Associate Professor of

Health Care Policy at the Brown University School of Public
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Health, where I focus on health care price transparency and the

evolving structure of U.S. health care markets.

The United States leads the world in health care spending in

large part due to high and variable prices. Rising health care

spending strains government finances and erodes worker wages,

particularly for middle-and lower-income Americans. Prices are

opaque, fueling consolidation and leading to patient frustration

with the U.S. health care system.

These challenges have important implications for aging Americans. First, many elderly individuals receive private insurance,

most commonly from their current or former employers, and thus

are impacted by high and variable prices.

Second, high health care costs and patient financial burdens lead

to reductions in high-value and necessary care. For the under–65

population to age healthily, it is critical that they have access to

affordable health care.

Finally, high and differential prices drive health care consolidation, which erodes access to care and the quality of care for Medicare beneficiaries.

In response, policymakers have undertaken efforts to increase

price transparency. However, many of these efforts are currently

incomplete. Today I will discuss impacts of price transparency and

ways to improve the use of price transparency data in the U.S.

health care system.

First, it is important to recognize that price transparency is not

a cure-all for the health care system but rather is critical to improve the efficiency and regulatory oversight of health care markets in the United States. While patients have an ethical recent to

know prices, many do not actually shop for care. However, my research has shown how entrepreneurs and innovators can use price

transparency to improve health insurance benefit designs and to

create competition in health care markets.

In addition, price transparency is critical for enabling employers

and other purchases to fulfill their fiduciary obligations to provide

health insurance benefits to the workforce at fair prices. An appropriate use of price transparency is to serve as a hub that enables

other benefit design innovation and inform policies that reduce

spending and improve quality.

As a few examples, and as discussed in more detail in my written

remarks, we have collected data from many employers in the State

of Indiana and report what they are paying for hospital care. After

seeing that they were paying some of the highest prices for hospital

care in the country, these employers have used this type of price

transparency data to both negotiate for lower prices on behalf of

the workforce and also push for state policies to make Indiana

health care markets more competitive.

In other examples, the State of Oregon public employees and

schoolteacher have used price transparency data to implement a

reference-based pricing program that caps prices at 200 percent of

what Medicare pays. This program saved over $100 million in public funds in the program’s first two years.

My co-panelist from 32BJ has used price transparency data to

design a targeted insurance network that excludes inefficient pro-
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viders. These savings from this type of program resulted in a

$3,000 bonus for New York City service workers.

To allow for these types of innovations to occur nationwide, recent Federal policies seek to increase price transparency through

two main requirements. First, hospitals are required to post prices

for 300 shoppable services, and second, insurers are required to

post their full set of negotiated rates.

The insurer-posted coverage and transparency data represents

probably the most complete view into health care prices in the

United States. While these data have certainly had a rollout process, researchers such as myself are now using these data to more

completely understand health care markets in the United States

and entrepreneurs are using these data to drive health care market

competition.

While a terrific resource, these data can certainly be improved by

reducing duplicate entries and posting of prices among providers

who do not actually perform services. Requiring insurers to limit

posted prices to providers who actually perform service or potentially include the number of services billed would greatly improve

data quality and accessibility. These data could also be centrally

hosted by CMS using modern data base technologies.

Additionally, despite the 2021 Consolidated Appropriations Act

provisions, many employers and purchasers do not have access to

their own plan claims data. Proposed bipartisan legislation codifies

access to self-funded plans’ claim data, and these data are necessary for employers to be responsible fiduciaries and purchasers

of health care services on behalf of their workforce.

In conclusion, the large variation in health care prices and

opaque nature of prices in the United States drives frustration

with the U.S. health care system. Federal policies to improve transparency are important first steps, and I believe that building on

these efforts will improve the U.S. health care system and lower

spending, particularly for aging Americans.

Thank you, and I look forward to your questions.

Chairman CASEY. Dr. Whaley, thanks so much for your testimony.

We will now continue testimony with Ms. Deacon.

STATEMENT OF CHRIS DEACON, JD, PRINCIPAL OWNER,

VERSAN CONSULTING, LLC, MOORESTOWN, NEW JERSEY

Ms. DEACON. Chairman, Ranking Member, and distinguished

members of the Committee, thank you for the opportunity to testify

today on the critical issue of transparency in health care.

Imagine, if you will, that you are the CFO of a company where

you give the company credit card to your suppliers and vendors. Instead of receiving an itemized statement at the end of the month

you receive one paper with one number—no receipts, no details,

just the total amount owed. No business would ever allow such a

practice.

Yet this is exactly what happens in our health care system today.

Employers are forced to hand over the company credit card to Blue

Cross Blue Shield, Cigna, Aetna, United, allowing them to pledge

company dollars and member dollars to a health care system that

can charge whatever they want, however they want, with little to
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no accountability or oversight. That is why we are here today.

Transparency, or rather lack of transparency, facing employers and

unions that are responsible for purchasing health care for almost

160 million Americans.

You likely know the statistics and the alarming rate at which

health care costs are growing, but I know the people behind these

statistics. As the former administrator for the State of New Jersey’s public sector health plans, I know firsthand how the lack of

transparency impacts our teachers, firemen, police officers, and

public sector workers.

Sadly, this year in New Jersey, over 200 school positions will be

eliminated due to budget constraints, constraints largely driven by

health benefit costs, and public safety workers are facing a 16 percent premium hike, eroding years of wage growth and further

stretching scarce public safety resources.

ERISA, which governs most employer sponsored health plans in

the country, is intended to protect plan participants and beneficiaries by mandating that plan sponsors act as fiduciaries. When

employers lack access to meaningful claims data and transparent

information on the cost and quality of care, the promise of ERISA

remains unfulfilled.

Let me share three examples that illustrate the magnitude of

this issue.

At the Mayo Clinic in Jacksonville, Florida, if you were to use

your Federal Employee Health Benefits Blue Cross Blue Shield

card for an arthrocentesis procedure it would cost you and the Federal Government approximately $2,500, but if you were to not use

your card and pay cash, you would pay just $392. That is six times

more.

At the University of Pennsylvania Hospital in Philadelphia, the

cash price for an ACL repair is approximately $9,500, but if you

are a servicemember and you use your TRICARE coverage your

price, and the Federal Government’s price, is $37,489. That is almost a 300 percent markup.

Or consider when a third-party administrator, or TPA, overpays

for a claim or pays a claim in error with a self-funded employer or

union’s money. If—and I emphasize ′′if′′—the TPA seeks to correct

their error and recover the employer’s funds, it will cost them.

TPA’s regularly charge employers 25 to 50 percent of the recovered

payment. This is the ultimate fox guarding the henhouse.

Finally, there are the misaligned financial incentives that play

out when a TPA is able to pay providers one price and then charge

the employer or the union many times more for the exact same

claim. In several recently unsealed court documents out of a case

in the Central District of California, it was revealed that a group

health plan paid over $4 million for one claim, but the provider

only received approximately $876,000 of that $4 million. What accounted for the difference? Cigna kept over $2.5 million in fees, and

their subcontractor, Multiplan, kept another $678,000. The fees

were over three times higher than what the provider was actually

paid.

These examples are just the tip of the iceberg in terms of the

waste, abuse, and inefficiencies in the current market, driven, in
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large part, by the lack of transparency and meaningful access to

data for employers.

If we expect employers and unions to exert any type of market

forces to rein in health care costs we must empower them with actionable data and transparent pricing. The company credit card has

been abused for too long by the PBMs and TPAs. It should not be

unreasonable to demand receipts for payment, itemized statements,

and the ability to protect our businesses and plan members, and

that is what S. 3548 uniquely accomplishes, in a superior manner,

in my opinion, to the Lower Cost More Transparency Act with respect to access to claims data. Federal lawmakers must rebalance

the information asymmetry to empower employer purchasers and

unions to push back against egregious pricing, gross overreach, and

profiteering. This will help protect the American workers’ paychecks and ensure a fair, more accountable health care system for

all.

Thank you.

Chairman CASEY. Ms. Deacon, thanks very much for your testimony.

Ms. Opsahl.

STATEMENT OF CORA OPSAHL, MBA, HEALTH FUND

DIRECTOR, 32BJ HEALTH FUND, NEW YORK, NEW YORK

Ms. OPSAHL. Good morning. Thank you Chairman Casey,

Ranking Member Braun, and the rest of the Committee on Aging

for inviting me to speak today.

My name is Cora Opsahl, and I am the Director of the 32BJ

Health Fund. The 32BJ Health Fund is a self-insured, Taft-Hartley

benefit fund that provides health benefits to over 200,000 union

members and their families. Our members are essential workers

who work in the real estate industry, security officers, school workers, and airport workers. We are based primarily in the New York/

New Jersey area, but we have families up and down the East Coast

including Pennsylvania and Massachusetts.

The fund is jointly governed by a board of trustees appointed by

the Union and the Employers, and we provide high-quality benefits

with no premium sharing, $0 in-network deductibles, and low innetwork copays. We believe the fund has an important role in tackling the problem of health care affordability, and we have spent

years doing just that by leveraging our data, challenging the status

quo, and finding innovative ways to manage our benefit.

Having access to our claims data is foundational to our work,

and we have been fortunate to have access to our medical, pharmacy, and ancillary claims data. We use this data to understand

our health care spend, make benefit decisions, and ensure we are

a good steward of the fund’s resources, because of our data, we

know the following:

In 2023, we spent $1.4 billion in health care. Of the $1.4 billion,

55 percent is spent on inpatient and outpatient care. In 2021, we

paid 271 percent over Medicare prices for the same care, which is

up from 219 percent of Medicare in 2016, and in the past 10 years,

health care has risen from 17 percent of total compensation to 37

percent of total compensation. Wages have gone up 54 percent but

health care costs have gone up a whopping 230 percent, and to put
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that into a dollar amount, our members could have had $5,000

more in annual wages had health care spend risen at just the same

rate of inflation.

While having your data and being able to see how your benefit

is being spent is important, as a plan we know this is only the first

step. The next step is taking action on the data.

In 2018, after spending 10 years looking at our claims data, it

became abundantly clear to us that we needed to address the prices

we were paying. The data showed we were paying wildly different

prices for the same procedures, depending on what hospitals our

members went to. For example, we were paying approximately

$10,000 for a colonoscopy at New York Presbyterian system versus

approximately $4,000 at Mount Sinai Hospital system. The same

pattern was true at other high-priced systems. Based on our data,

we tiered our network on price beginning in 2019. Members could

still access the higher-priced hospitals, but they would have to pay

higher copays to do so.

While we had won the right to tier our plan in 2019, in 2021,

New York Presbyterian told Anthem, Blue Cross Blue Shield, that

they would have to be preferred in all networks, leveraging a

clause in their contract. In 2022, the fund won permission to remove them from our network. This change has saved the plan approximately $35 million every year by members receiving care from

lower-priced facilities and providers.

In the most recent contract negotiations, the union and employers leveraged the savings in our benefits to give union members a

one-time bonus, the largest wage increase in contract history, and

a pension increase, and they were able to limit employer premium

contribution increases to no more than three percent every year

through 2027.

While these benefit changes showcased our ability to leverage

our data, both changes also illuminated the contract terms between

providers and carriers that obstruct, hinder, and limit the ability

for us and other employers to take action on their data.

Recently, the Health Fund led a procurement for a medical and

hospital benefit third party administrator, or carrier. We were adversely affected by anti-competitive contract provisions between

providers and carriers, such as requirements to be in network,

anti-steering and anti-tiering provisions, limitations in how claims

are allowed to be paid, and even limitation in access to claims data.

Due to these contract provisions, every TPA bidder, except one, was

unable to meet our network requirements, including that New York

Presbyterian remain out of network.

Other provisions routinely demanded by hospitals include restrictions on retroactive claim reviews, exclusion of ′′lesser-of′′ provisions, and limits on payment recoupment. None of those contract

provisions are beneficial to the employer-sponsored plans or their

membership. The experience showcased how difficult it is for employers and self-funded plans, even of our size, to have a highly

competitive bid process.

We would not be where we are today without access to our data,

allowing the union and employers to give raises and limit premium

increases, ensuing our members can continue to have access to

high-quality and affordable care. Employers having access to their
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claims data and the terms in which their benefits are being managed are essential for them to be able to do the same thing. That

is why we need the Braun-Sanders bill, and Section seven in particular.

Thank you for having me.

Chairman CASEY. Ms. Opsahl, thank you for your testimony. We

will turn to our final witness, Ms. Tripoli.

STATEMENT OF SOPHIA TRIPOLI, MPH, SENIOR DIRECTOR

OF HEALTH POLICY, FAMILIES USA, WASHINGTON, D.C.

Ms. TRIPOLI. Chairman Casey, Ranking Member Braun, and

members of the Committee, thank you for the opportunity to testify

today. It is an honor to be with you. On behalf of Families USA,

a leading national nonpartisan voice for health care consumers, I

want to thank you for this critical discussion.

No one in America could have to choose between going to see

their doctor and buying groceries to feed their family. Yet almost

half of all Americans do not get needed medical care because of the

cost, and 48 million older Americans fear they will not be able to

afford lifesaving care.

Every American knows that we pay too much for the health care

we get, but many Americans do not know why—because health

care consolidation, particularly among hospitals, has eliminated

competition and allowed monopolistic pricing to push our Nation’s

families to the brink of financial ruin.

Particularly concerning is that health care is one of the only sectors in the U.S. economy where consumers are blinded to health

care prices until after they have received a service and a subsequent bill. This lack of transparency is a major barrier to the

health care sector competing based on fair prices and high-quality

care, and there is no question that our Nation’s families are suffering the consequences.

Take the story of Kyunghee Lee from Mentor, Ohio. Once a year

she goes to a rheumatologist for a steroid injection in her hand to

relieve pain associated with her arthritis. Each round of injections

costs her $30, but in 2021, when she arrived at her usual office for

her usual treatment she found they had moved up one floor in the

building. She thought nothing of it until weeks later she received

a bill for nearly $1,400. Ms. Lee’s infusion clinic was moved from

an office-based practice to a hospital-based setting, resulting in a

price increase of almost 4500 percent for the exact same service,

from the exact same provider, or take the story of Ben Los and his

then 5-year-old son from Monument, Colorado. In 2022, Ben and

his wife rushed their son to the doctor after he began experiencing

seizures. They were referred to a specialist and received confirmation that their son’s EEG scan would be covered. Weeks later the

Los family received a bill for $2,500. When they called the hospital

about the bill they were told it was a facility fee, that the physician

service was covered, but now they had to pay the hospital.

Frustrated with a bill he could not pay and grappling with his

son’s health, Ben wanted answers about why this happened, but

found it nearly impossible to determine who actually owned the

hospital. It was a giant black box. Ultimately, Ben discovered that

this hospital system raked in billions of dollars in profits just in
11

the first nine months of 2022, all while he was struggling to pay

his medical bill.

These stories are far too common in the U.S. health care system,

particularly since the role of hospitals in our economy has shifted

drastically over the last 60 years. What were once local charitable

institutions built to serve the community have now become large

corporate entities, focused on maximizing revenue rather than improving health. Fundamentally, the business interests of the sector

are no longer aligned with the health and financial security of the

patients they serve.

Study after study shows that privately insured consumers and

employers are paying two to three times what Medicare pays for

the same hospital services. Commercial insurance prices for hospitals and physician services in more monopolistic markets like

Florida, South Carolina, and Tennessee, cost at least twice as much

as the same services in competitive markets.

Take the average price of a knee replacement, which costs three

times more in Sacramento, California, than in Tucson, Arizona, or

the price of an MRI at Mass General Hospital in Boston, that costs

five times more just depending on the insurance carrier. These

higher prices result in higher premiums, lower take-home pay, and

higher cost-sharing for the more than 176 million Americans who

get health insurance through their employer or directly from a

health plan.

Medical monopolies are forming in nearly every state, whether it

is a private equity-backed firm buying up hospitals and then cutting service lines and laying off workers, as we see is the case of

Steward Health System in Massachusetts, or price gouging and

suppressing wages in the case of UPMC in Pennsylvania, or the

giant medical monopoly that is HCA Healthcare, which has facilities in 20 states, including Indiana, Georgia, Florida, and South

Carolina. Notably, HCA Healthcare ended 2023 with more than $5

billion in profits, on $65 billion in revenues, allowing their CEO to

take home a salary of more than $21 million. These billions of dollars of profits are made on the backs of people like Ben Kyunghee

Lee, and the one-third of Americans who cannot afford to buy groceries or pay their rent because of rising health care costs.

Congress has used its power to rein in the corporate abuses of

Big Oil, Big Tobacco, Big Banks, and Big Tech. Last year, the Senate examined how to protect people from price gouging for concert

tickets. It is past time to scrutinize big health care corporations

and protect families in America from the greed of medical monopolies.

We urge this Committee to support well-vetted, bipartisan solutions, including strengthening and codifying price transparency

rules, implementing site-neutral payment, and addressing dishonest billing, increasing transparency of ownership data, limiting

harmful contracting terms, and strengthening FTC and DOJ enforcement of anti-competitive practices.

This Committee has a responsibility to put the needs of our Nation’s families ahead of the greed of big health care corporations.

Our health is not a game, and no one should be allowed to play

Monopoly with it.
12

I thank the Committee for your time and look forward to answering any questions.

Chairman CASEY. Ms. Tripoli, thank you for your testimony. I

will start our round of questions.

Dr. Whaley, I will start with you, and I am grateful for your testimony today. We all know health care costs in the country are continuing to rise. Hospital costs have risen faster than health care

costs overall. These increasing costs directly impact Americans’ access to health care, and before we get to solutions, which we are,

of course, trying to arrive at today, we need to understand the underlying causes of these high prices.

What are the major—and if you can just, and I know this is part

of your testimony, if you can itemize again for us the major drivers

of rising hospital costs, in particular.

Dr. WHALEY. We know that in particular hospital costs are driven by provider consolidation, and are actually not driven by differences in quality of care, and I think this is particularly relevant

because over the last two decades we have seen over 2,000 hospital

mergers in the United States, which have resulted in a hospital

market that is incredibly concentrated.

Chairman CASEY. 2,000 mergers, in what time period?

Dr. WHALEY. Over the last two decades.

Chairman CASEY. That is an alarming number.

I wanted to turn next to Ms. Tripoli. As we know, the cost of

health care has implications at all levels of our economy. Health

care spending affects both government and employers. It affects,

obviously, patients and families. As costs rise and patients continue

to struggle to afford care, which often results in delayed care or

care that is actually foregone, in 2022, more than a quarter of

adults reported delaying or foregoing health care due to the costs,

so it is a disincentive to seek out the care they need. Others may

still receive needed care but go into medical debt when they do so.

Here are kind of two questions in one. How do high hospital costs

impact the lives of patients. That is one, and the second question

is what might an unexpected surgery or other medical expense

mean for a family’s budget?

Ms. TRIPOLI. Thank you very much for the question. I think high

hospital costs, what it means is an increasing impact on our premiums, for example, increasing cost sharing, and what many folks

do not actually realize is that for people in the commercial market

for employees that more of their take-home pay is going to rising

health care costs instead of being able to come home with them to

afford things like buying groceries.

At the same time, premiums are increasing much faster than

workers’ wages, so we are creating a real crisis, from workers who

are showing up every single day, doing exactly what they should

be doing, and yet they are continuing to struggle to afford the skyrocketing costs of health care.

Chairman CASEY. Any examples you have, or walk me through,

if you can, the scenario of an unexpected surgery or other medical

expense in terms of a family budget.

Ms. TRIPOLI. Absolutely. I think data suggests that more than

half of Americans have no emergency savings on hand, and of the

ones that do, they have less than $1,000 on hand at any given mo-
13

ment, so you are talking about an emergency surgery or any type

of unexpected health care need, that would literally bankrupt the

American family that more than half of Americans would not be

able to afford the care. That is why we are seeing 100 million

Americans, and growing, with medical debt.

Chairman CASEY. Thank you. I wanted to move to another question before my time runs out. We have discussed hospital costs, obviously. I also wanted to focus, as well, on prescription drugs. We

know those costs account for a high percentage of health care

spending. I mentioned my legislation, Capping Prescription Drug

Costs Act. Senator Warnock and I have introduced that together.

That would expand on the success of the IRA provision on extending prescription drug costs to patients.

What can high prescription drug costs mean for a family that is

already struggling to make ends meet?

Ms. TRIPOLI. Absolutely. I mean, we know that 30 percent of

adults do not actually take their prescription drug medication, either rationing the drug, skipping it, or foregoing it altogether because they cannot afford it, and that actually results in 125,000

deaths a year. For most people, not being able to afford their drugs,

not being able to afford their medical care, is literally a decision

between life or death.

Chairman CASEY. Give me that number again. You said

125,000——

Ms. TRIPOLI [continuing]. deaths per year.

Chairman CASEY. Caused by——

Ms. TRIPOLI. Adults not being able to afford their prescription

drugs, either from delaying care, rationing their medication, or

foregoing taking the drug altogether.

Chairman CASEY. Mr. Tripoli, thanks for your testimony and answers to those questions.

I will turn to the Ranking Member.

Senator BRAUN. Thank you, Mr. Chairman. I am going to start

with Ms. Deacon and Ms. Opsahl. This whole idea of claims data,

for the benefit of the Committee and other listening, on self-insured

plans why has that not been the default that you will get it? What

has the industry done to keep the one thing, when you do have,

like when I formed my own plan we finally got rid of the profit

margin that the insurance company was making. Give us a little

background on why they have been so begrudging in terms of giving that basic information.

Ms. Deacon, I will start with you, and then Ms. Opsahl will go

next. Go ahead.

Ms. DEACON. I think the example I gave in my opening remarks

is probably the best example of why a carrier or a TPA would not

want a self-funded employer to have access to their data. What you

will see in the data is that you are often paying above billed

charges. You might also see that the rate you are paying under

their negotiated discounts can be six times, ten times higher than

the cash rate, and what they have done to sort of block access to

this data over the years, anything from draconian NDA provisions,

proprietary data formats, claiming that the data is proprietary and

confidential, limited data sharing provisions, implementing prohibitive cybersecurity policies in order to access your own data, and
14

even so far as limiting what data warehouses are able to share

with employers and third-party——

Senator BRAUN. That is the ultimately behavior of a monopoly,

and remember, they are the supplier, and this is going against

their own customers, and that, to me, is indicative of why we are

in the pickle we are in.

Has this been the general dynamic across all states? Have some

places been able to fix that? Has it just happened recently, where

plans have been able to sue to get the information? Give me a little

kind of background on how long we have been dealing with this

and what has kind of cracked the ice at this point.

Ms. DEACON. It has been a long time that self-funded employers

are dealing with a lack of access to data, but with the Consolidated

Appropriations Act of 21, we had hoped that some of the provisions

in that act would lead to more access to claims data. Employers

were restricted from entering into contracts that would limit their

access to claims data. However, in practice, that has not necessarily played out how we had hoped it would, and employers are

still facing these roadblocks and barriers in getting access to their

claims data, but the sort of crack that you mentioned is we now

have this law so that employers are litigating. They are filing suit

to say this is my——

Senator BRAUN. Are they winning mostly, or are they losing?

Ms. DEACON. We have not really had a case that has come all

the way to decision. We are at the outset of some of those cases,

and some of them have settled outside of the public domain, so we

do not necessarily know what——

Senator BRAUN. All insurance companies basically do this.

Ms. DEACON. All of the big ones, yes.

Senator BRAUN. All of the big ones, so maybe it needs to be

where employers start looking at other than the big guys that seem

to not want to bargain fairly, with information that should not be

theirs in the first place.

Ms. Opsahl, can you kind of explain how you finally cracked

through, how long it took, and are you still wrestling with it?

Ms. OPSAHL. Thank you so much for the question. I will start

with, yes, we are still wrestling with it. We just recently went

through a procurement, and still had to reassert our agreement

and right to this claims data.

I look at claims data as receipt for payment. You do not pay your

credit card bill without an itemized list. You should not be paying

claims. As a self-funded employer, it is our responsibility to pay

these claims.

We won the right to get our claims data a little over 15 years

ago, but had to do that through leaving a big carrier and coming

back. It should not take employers having to go through a comprehensive procurement process to have to win enough power to

get access to their claims data, but again, we still fight that today.

If we want to add a new field—we were just talking about this this

morning—add a new field, well, that is in System A, and we are

actually pulling this from System B, and so it is going to take nine

months to add this flag that says whether or not, you know, which

hospital systems and things of that nature.
15

It is not simple. It is not easy, and I have eight people on my

staff who look at the data every day to even see how good it looks.

Senator BRAUN. Thank you. I am out of time but I do have another round of questions, but I would like to point out to the public,

I do not know of one other industry where we have had to bring,

at the federal government level, a transparency bill. Every other

industry out there engages with an informed consumer, and you

have got that information on the Web, you have got it so many

places. In my own business I remember it was so competitive, your

customers would put you on speed dial to see who was going to give

the best price, and you could have accomplished that all within

about four or five minutes. We are so far from that. The industry

better take note that it is not normal to operate the way they do.

I will yield back for now.

Chairman CASEY. Ranking Member Braun, thank you for your

questions, and as you all know, on a Thursday we have got Senators that are in and out, competing demands, especially competing

hearings, as Senator Braun mentioned. He and I are both members

of the HELP Committee, so we cannot transport ourselves quite

yet, but we are going to be in and out. People will be in and out

today, but I wanted to thank Senator Ricketts for being here. He

might have close to 100 percent attendance record. There is some

prize for him somewhere, but I will turn next to Senator Ricketts.

Senator RICKETTS. Thank you, Mr. Chairman. Thank you, Ranking Member, and thank you to all of our witnesses for being here

today to provide testimony.

As the population of the United States ages it is vital that we

take a closer look at the institutions and programs that we trust

to take care of them. It is our job to protect America’s most vulnerable citizens and ensure that they are equipped with the tools to

make the best decisions for their own care. In addition, we must

ensure that programs like Medicare and Medicare Advantage have

accurate and easily understandable information that is accessible

for those who rely on it.

This past February I held an Aging Committee hearing in my

home State of Nebraska, and we focused on educating older Americans on health plans through Medicare. While there are resources

through Medicare and state health insurance assistance programs,

SHIPS, many older Americans fail to become properly educated on

the wide variety of health plans.

For 2024, it is estimated that there are a total of 8,676 different

Medicare Advantage plans. According to a recent report, one of the

biggest challenges with Medicare Advantage plans is poor patient

education. If a person enrolls in Medicare Advantage when they

first become eligible for Medicare they can switch to original Medicare and Medigap within the first 12 months of their plan. However, if an enrollee fails to switch their plan within that first 12

months, there are additional requirements to switch back to Medicare and a Medigap plan that can be very challenging.

Ms. Tripoli, it is often the case that older Americans sign up for

plans that do not cover many of their needs and cover their outof-pocket costs. Do you have recommendations for addressing this

issue, and maybe education gaps? What can we do to be able to
16

help folks who are getting ready to make this decision to be able

to make the right plan choice for them?

Ms. TRIPOLI. I mean, absolutely. I think in general we need a lot

more transparency of information across the health care system.

Medicare Advantage is no different. One of the things that we often

see in Medicare Advantage is a very aggressive marketing of supplemental benefits, for example, and plans are using it as a hook

to get seniors to sign up for the plan and then they are enrolled

and they actually find out, oh, that is not exactly the benefit that

was marketed to me.

I think one of the solutions both around supplemental benefit

and just in general is we need much more transparency. We need

more data that is accessible for researchers, for the public, and for

policymakers to understand what is actually happening underneath

the hood of the health care system, so we can have more targeted

decisions to make sure that consumers, the end user of the health

care system, are actually getting the care they need, that is affordable, and it is meeting their health needs.

Senator RICKETTS. As we were talking about this transparency,

is this something where we would be able to require, like these

plans, to be able to provide—I don’t know, we were talking about

some of the cost differences in different procedures. Certainly,

there are common things that our seniors need or get requirements. Is that something that maybe the plans should have to be

able to talk to seniors about and say, hey, for a typical thing that

our seniors are going to need this is what it may cost you?

Ms. TRIPOLI. Absolutely. Seniors and older Americans and just

the general public needs much more data about the cost of care and

the quality of care that is associated with that cost, so they can understand what is the value of what I am getting, and then they can

make more informed choices about plan selection, whether they

need a service, whether they want to shop for one MRI at this hospital versus another hospital, but yes, absolutely.

Senator RICKETTS. Actually, you bring up a great point there, because we have talked a lot about costs and transparency on costs.

How do we go about tackling the quality aspect of it? Some of the

folks have mentioned the quality as an aside, but how do we educate consumers on that quality aspect of it too, because there is always a cost-quality tradeoff. How do we measure the providers on

that quality?

Ms. TRIPOLI. I think you are asking probably the million-dollar

question right now. Obviously, we have a lot of quality reporting

requirements, but there are a lot of requirements, and there is not

necessarily a harmonized set of quality measures that we can pull

down and assign to a specific service, so we actually need quite a

bit of work on the quality side, and CMS, as well as multiple stakeholders from a lot of different sectors have been working to address

this issue, but it takes time, and much more work is needed.

Senator RICKETTS. Great. Thank you.

Ms. Deacon, in 2020, Congress passed legislation to stop thirdparty administrators of self-insured employer and union health

care plans from writing contracts that denied plans access to their

data on prices and health services, but it sounds like, from earlier
17

legislation, this legislation has it stopped the gag clauses from

being implemented?

Ms. DEACON. Thank you for the question. In my experience, no,

it has not. I have worked with multiple employers and unions that

continue to face these roadblocks, and again, some of the examples

that I gave earlier, draconian NDA clauses that even if they are

getting access to the data they cannot do anything with it. They

cannot audit their own claims. They cannot look for retrospective

payment reviews, so it is very limited even when they are getting

access to the data, but that is when, and I would say that, by and

large, we have not had the sea change that we were hoping for

after that law.

Senator RICKETTS. Thank you. Mr. Chairman, if I could just have

another minute or so.

Chairman CASEY. Sure.

Senator RICKETTS. I would like you, Ms. Deacon, to comment on

the quality question, as well.

Ms. DEACON. The quality question?

Senator RICKETTS. Yes, because again, there is cost-quality. How

do we tackle that part of it?

Ms. DEACON. Yes. To sort of echo Ms. Tripoli’s point, there is a

lot of work that needs to be done on the quality side, as well. CMS

obviously has some star ratings on hospitals. We have different associations and stakeholders that are also issuing quality ratings,

but what I will say is that the consumer today, unfortunately, is

left with sort of improperly correlating brand name and high cost

with quality, but as Dr. Whaley would probably attest, there is no

direct correlation between increased price and higher quality. In

fact, oftentimes it is the inverse.

Again, we need to provide consumers and purchasers with more

information on quality so they are not left to make that decision,

an improper correlation on their own.

Senator RICKETTS. Yes, and just to be clear, when you are talking about the star ratings on hospitals, that is the hospital, in general. It is not about a particular procedure that hospital may be

doing, right?

Ms. DEACON. That is right.

Senator RICKETTS. Even that data does not really mean that

much to an individual who is getting a procedure in one hospital

versus another because the hospital may have a high star rating

but it may do this procedure particularly poorly versus another

provider.

Ms. DEACON. Right.

Senator RICKETTS. Fair?

Ms. DEACON. Yes, absolutely, and they might be great at transplants, but, you know, not necessarily cardiac, so we definitely need

more information on the quality side.

Senator RICKETTS. Great. Thank you, Ms. Deacon. Thank you,

Mr. Chairman.

Chairman CASEY. Thank you, Senator Ricketts. Senator Warren.

Senator WARREN. Thank you, Mr. Chairman, and thank you and

Ranking Member Braun for holding this hearing on price transparency. For almost every other type of service you can look up the

price before deciding whether or not to purchase, but when it
18

comes to health care it is virtually impossible, even though Americans are paying more for health care than any other country in the

world, so when patients need health care they should be able to

easily find out the price of those services.

Here is something else they should be able to find out easily—

who owns the hospital or the physician practice that you or a loved

one may visit to receive that care? Today nearly 80 percent of doctors are employed by corporate entities, including private equity

firms, and once in control, these firms raise their prices and cut

corners to line their own pockets while the quality of care suffers.

Let me start with you, Dr. Whaley. You are an expert on private

equity in health care. If a patient wanted to find out whether a

neighborhood hospital or a primary care practice was owned by private equity, how hard would that be to do?

Dr. WHALEY. Senator Warren, I think it is virtually impossible

for a patient to know whether or not their doctor’s office is owned

by a private equity company.

Senator WARREN. Yes, so virtually impossible, because private

equity firms do not have to report ownership, it is nearly impossible to find out if the doctor’s office you visit is owned by one of

these corporate vultures.

Well, let’s ask about the workers. How hard is it for the workers

to find out? Ms. Opsahl, you lead the health fund at labor union

32BJ. If one of your members wanted to find out if a potential employer of any kind was owned by a private equity company, how

simple would that be to do?

Ms. OPSAHL. Similar to what Dr. Whaley said, next to impossible, and I would even say as the employer or as the sponsor of

the plan, I do not know who I am writing my self-funded checks

to, as well.

Senator WARREN. Okay, so next to impossible, virtually impossible. I am sensing a trend here. Patients cannot find this information. Workers cannot find this information. Even antitrust regulators have a hard time finding this information. These are the

agencies that are responsible for cracking down on anti-competitive

behavior, and they cannot get their hands on these data, and it

matters because private equity ownership has real consequences

for the families and the workers who need help here.

Dr. Whaley, once private equity firms take over health care companies what happens to health care costs and quality?

Dr. WHALEY. Several studies have shown that when a private equity company acquires a health care practice, whether it be a physician or a hospital or other type of health care provider, prices increase quite substantially. We have also seen evidence, particularly

in nursing homes, that quality goes down, again quite substantially.

Senator WARREN. I just want to relate this to the earlier line of

questions, where you said people are using higher price as a signal

that they are going to get better care, and yet the data show us

that when private equity takes over, price goes up and quality of

care actually goes down. Is that right, Dr. Whaley?

Dr. WHALEY. That is what the host of studies that have examined the question have said.
19

Senator WARREN. So not just one study. You see it across the

board in all of the studies that have looked at this.

You know, I saw this firsthand in Massachusetts after private

equity drove Steward Healthcare into bankruptcy, and that is why

I introduced the Corporate Crimes Against Healthcare Act, which,

among other things, would require private equity-owned health

care companies to publicly report mergers, acquisitions, changes in

ownership and control, and financial data, so at least the information would be out there.

Let me ask, Dr. Whaley, would these data help state and federal

regulators prevent crises like the Steward failure in the future?

Dr. WHALEY. I think having accurate and transparent data on

ownership is incredibly important and can help both state and federal regulators monitor health care markets and get ahead of what

is happening in many cases.

Senator WARREN. Yes. It is shameful that these firms can hide

in the shadows while patients and workers suffer. My Corporate

Crimes Against Healthcare Act would shine a light on private equity’s most parasitic practices. I would also claw back compensation

from private equity executives that drive portfolio companies into

bankruptcy. It would impose criminal penalties on executives when

their failure result in patient deaths, and it would empower regulators to prevent crises like Steward from ever happening again.

There is a lot of work we need to do here, Mr. Chairman. Thank

you.

Chairman CASEY. Senator Warren, thanks for your questions. I

will turn to Senator Vance.

Senator VANCE. Thank you, Mr. Chairman, and thanks to you

and the Ranking Member for your work on this, and thanks to the

four of you for being here with us.

I have to sort of give special credit to both the Ranking Member

and also to President Trump’s administration for, I think, working

a lot and getting a lot done on the question of price transparency,

and obviously there is a lot more to do. I know Senator Braun has

a bill that has done a lot on this space, and hopefully we can get

some work on it.

I wanted to direct my questions to you, Ms. Deacon, and ask a

little bit about just the connection between price transparency and

actual price, because it is something that, you know, as somebody

who has never worked in the health care space, at least not directly, I do not fully understand this entirely.

The basic argument, as I get it, is that if you provide more price

transparency it gives people more information to negotiate better

prices for certain services and so forth, but then obviously if you

are an individual, self-insured, maybe small group insurance, it is

going not be a little harder for you to negotiate a price than if you

are part of a large group plan where effectively the insurance company is negotiating the price for you, so I am just very curious.

Walk me through the interaction here between, especially for

smaller consumers, between price transparency and hopefully lowering health care prices.

Ms. DEACON. Great. I think for a small business that provides

health insurance for their members, whether self-funded or fully

insured, they have an incentive and a financial reason to ensure
20

that their members are going to the most cost-effective hospitals or

providers in their area, and so that does not just mean the cheapest or lowest price but that is price and quality.

If a small employer, that might not be able to have the weight

of negotiation power with a big hospital or with a carrier, has this

information they might be able to direct their members to the highvalue provider that is in their community. Perhaps they have to

drive an additional five miles or maybe even 10, but if they are

able to send their members to high-value providers that they have

access to they can dramatically lower their costs, without having

to have the might of hundreds of thousands of lives behind them.

Senator VANCE. Got it, and so part of this, effectively, is employers, especially small employers, effectively using their claims data

effectively, right. What are some of the barriers to using that

claims data? Why don’t we already just have the system? Why can’t

they do it already?

Ms. DEACON. I mean, I believe that most of the carriers today do

not have an incentive. In fact, they have a disincentive to provide

access to that information to employers, because they know what

employers will see and they know what employers can do with

that.

Senator VANCE. When you say carriers, do you mean insurers?

Ms. DEACON. Yes, third-party administrators in the case of a selfinsured employer, or a carrier in a fully insured product, but absolutely, you know, especially for small employers, one of the reasons

that the Braun-Sanders bill is so important is because it makes

this data available in a standardized format that we know every

carrier and/or TPA has access to, and it has the capability of providing that information in specifically standardized formats that

they are using today, so small employers will really benefit from

access to tools and technology that can leverage that standardized

formatting in the claims data to really do a good job managing

their health care costs for their businesses and their employees.

Senator VANCE. Got it. Well, thank you, Ms. Deacon. It sounds

like a good endorsement of the Braun-Sanders bill, and apologies

to the other three for not getting to you. Thank you all for being

here. Thanks.

Chairman CASEY. Thank you, Senator Vance. I will turn next to

the Ranking Member.

Senator BRAUN. Thank you, Mr. Chairman. Ms. Tripoli, I would

like you to talk about another aberration in the hospital system—

site neutrality, in this whole business of when hospitals buy clinics.

Explain to the American public, to the Committee what that is

about.

Ms. TRIPOLI. Absolutely. Site-of-service payment differentials

really originate in Medicare payment, where Medicare pays more

for services performed in an outpatient department than it does for

the same service and the same quality if it is performed in a physician’s office, and what this does is it does two things. First, it creates this incentive to push patients to higher costs of care settings,

which, of course, increases the cost for everybody, and second, it

creates a financial incentive, an economic incentive, for hospital

systems to actually buy up physician practices, rebrand them as
21

outpatient department, and all that is really happening is they

change the sign on the door to name it a hospital outpatient clinic.

Senator BRAUN. That average jack in price is about 40 percent?

Ms. TRIPOLI. Yes.

Senator BRAUN. That is why hospitals now comprise about 45

percent of the health care dollar because they have bought up so

many clinics, and as soon as they buy the clinics the prices go up.

That is another ripoff that happens nowhere else. Thank you for

explaining it.

I want to expose this part of what was really essentially when

I fixed it in my own business. The consumer is really disengaged,

and then complains about the bill, holds his or her breath, three

to four months later when you get it, and hope that the plan was

right, and I have never seen a business either, for the folks that

can afford it, and when the insurance companies told me that it is

minor health care, and the overutilization of it, and the fact that

there is no skin in the game among consumers, that that has driven costs high.

I mentioned earlier, insurance should be for indemnifying

against critical illness or accident. I would like your opinion, Dr.

Whaley and Ms. Deacon, on how do we get what drives most markets would be unfettered competition, no barriers to entry, price

transparency, but an engaged consumer? How important is that

part of the equation on the people that can afford it to be shopping

around for their primary health care and to where we take insurance out of it completely?

That is what I did. That was a key element that actually brought

it into line, because my employees became health care consumers

and they exercised their power in doing it. Dr. Whaley?

Dr. WHALEY. I think that aspect is critical. I think one really

good example actually comes from the California Public Employees

Retirement System, or CalPERS, which recognized the huge variation in price that was not tied to quality and the exact same siteof-care differentials that we just discussed, and so what they did

is they decided to give consumers skin in the game and said to patients, ′′We know that there are low-priced providers and we are

going to fully cover those providers. If you want to go to a higherpriced, inefficient provider then you are going to have to pay that

difference.′′

What we have seen in several studies with CalPERS is that over

90 percent of patients chose the lower-priced provider, and there is

a huge reduction in prices, an improvement in quality, and substantial savings.

Senator BRAUN. Ms. Deacon?

Ms. DEACON. Yes. I definitely believe that there is a greater role

that the consumer can play if and when they get access to good information and actual price. Again, this is one of the reasons that

real prices, as opposed to estimates, are so important. When you

get access to real prices, as opposed to estimates, you are much

more likely to rely on those for your financial well-being and making decisions, so there is a set of what we will call shoppable services that you are able to do, that engage in that consumerism, but

then there is the other sort of set of services, and more have to do

with inpatient stays and sort of unplanned services, and that is
22

really when the employer or plan sponsor has to step in and take

a role in terms of making better decisions and choices in who are

they letting into their network, what they are paying for that network rate, and the value that they are getting for their members

and for their business.

Senator BRAUN. By the way, before my time runs out, back in

2008, the insurance companies told me that if you can create a

market and an engaged consumer you will save so much money. By

then dealing with the slim amount of information—that was 16

years ago—it happened every time. When you had to pick up the

phone, get on the Web, you were experiencing 30 to 70 percent savings.

They also told me you would save so much money you can protect your employee with not having to engage in the coinsurance,

which is when you have a significant illness or accident you blow

outside the deductible and that is what takes you to bankruptcy

court. We got rid of that, and also got rid of copayments, and that

has held everything flat since then, so they became health care

consumers. People love it, because sooner or later you have a critical illness or a bad accident, and when you never have to pay outside your deductible and you help save money by shopping within

a broken system, imagine if providers would make that easy what

we could do to lower health care costs.

Thank you.

Chairman CASEY. Thank you, Ranking Member Braun. I knew

that Senator Warnock was on his way, and he appeared exactly at

the right time. Senator Warnock.

Senator WARNOCK. Thank you very much, Chair Casey and

Ranking Member Braun. Great to work with both of you on so

many important things. Chair Casey, I am especially grateful to be

working with you on the Capping Prescription Costs Act, so we can

finish the job of the Inflation Reduction Act when it comes to lowering drug costs. That means so much for the populations that we

are discussing in this hearing.

Nearly 15 years after the passage of the Affordable Care Act, 10

states have not extended access to affordable Medicaid coverage for

nearly three million Americans, in my own State of Georgia more

than 600,000 Georgians. Ms. Tripoli, there is a lot of

mischaracterizations about who is left in the coverage gap. Can you

paint a picture for us about those who are left behind? Who are

these people?

Ms. TRIPOLI. Absolutely. These are people who are very poor,

who do not currently meet the eligibility or category requirements

to qualify for Medicaid in states that have not expanded, in the 10

states, but they also fall underneath the Federal poverty level, so

they do not qualify for subsidies in the marketplace either, and

these are disproportionately people of color, disproportionately people with disabilities, and without access to health care it is very

difficult road. They essentially have to forego or delay care, and we

know that that often exacerbates their health conditions and can

be often a life-or-death situation.

Senator WARNOCK. Disproportionately people of color.

Ms. TRIPOLI. That is right.

Senator WARNOCK. Disproportionately the working poor.
23

Ms. TRIPOLI. That is right.

Senator WARNOCK. Working people, and I underscore that because we hear a lot of moralizing in this space, in so many of our

government spaces, about people needing to work, but often our

policy literally gets in the way of people who are quite literally

dying to get to work, and I say that, and I am thinking about

Heather Payne, a traveling nurse in Dalton, Georgia. I have gotten

to know Heather. She was my guest at the State of the Union address. I talked to her this morning. She is a relatively young

woman who has had a series of strokes that literally changed her

life. She was a traveling nurse, and sometimes she had health care

and sometimes she did not, so she has found herself in a terrible

situation, and the tragic irony that here she is a traveling nurse

who has dedicated her whole career to caring for people, and she

has had to put off essential medical procedures because she simply

cannot afford to pay out-of-pocket costs and cannot afford plans on

the Marketplace because she does not qualify for subsidies.

I literally talked to her about this this morning. I could both hear

and feel her stress around these issues, even as she is trying to get

her life together. She wants to go on and get another nursing degree and hopefully get her health back I order, but she cannot see

the specialist she needs, so that is why today I am introducing the

Bridge to Medicaid Act, with Chair Casey’s support, which would

temporarily extend subsidies to people in the coverage gap to buy

private insurance.

Ms. Tripoli, how does access to affordable health care benefit people like Heather who are in the coverage gap?

Ms. TRIPOLI. I mean, simply it is a lifeline. It allows them to

have access to the preventive services—cancer screening, prescription drug medication, diabetes management——

Senator WARNOCK. They want to get back to work.

Ms. TRIPOLI. Exactly

Senator WARNOCK. I am encouraged by recent developments, and

I believe we are closer than ever to closing the coverage gap in all

50 states, for those who want to make this a red/blue issue. Most

of the states have expanded, blue states and red states, but as

those conversations continue, people like Heather are caught in the

crosshairs, so my legislation would give vulnerable Americans access to affordable health care while state politicians, I hope, move

closer to making the right decision for their constituents.

I am a pastor, but those who are not moved by the moral argument, you know, that would be sad.

Let me underscore the economic argument. A report from the

Georgia Health Initiative, in March 2024, found that closing the

coverage gap would create 51,264 jobs statewide, and boost economic output by $9.3 billion during the first three years of full expansion. That is just in the State of Georgia. Not to mention that

we saw $3 billion of uncompensated care that our hospitals had to

carry in Georgia in 2021 alone, while politicians play this game.

Can you talk about how states have benefited economically from

Medicaid expansion?

Ms. TRIPOLI. Absolutely. I think that is exactly right, and I think

the other economic benefit for states who have expanded, particularly states with a lot of rural hospitals, is that we have seen, in
24

states that have expanded Medicaid, we have seen a reduction in

the amount of rural hospitals that have had to close their doors,

so Medicaid expansion is very important, obviously important for

people to get access to care, and important for the economy, as

well.

Senator WARNOCK. Thank you so very much, Ms. Tripoli, and

thanks to all of our witnesses. Georgians and Americans in nine

other states cannot afford to wait around for state leaders to make

the right choice, and that is why today I am proud to introduce,

along with Chair Casey, the Bridge to Medicaid, which temporarily

extends subsidies to the millions of Americans in the coverage gap.

This legislation is not a replacement for full Medicaid expansion,

but we are doing it because people like Heather Payne cannot wait.

Georgia still, by the way, has the option to fully expand, and $1.2

billion in additional Federal funding will be waiting for Georgia

when it finally does the right thing.

Thank you so very much.

Chairman CASEY. Thank you, Senator Warnock, and thank you

for your work on these issues, especially Medicaid, all these years.

Senator Braun, the Ranking Member, just went to the HELP

hearing, so I want to make sure that we have time to close so I

can get to the same hearing. We are juggling today.

I want to note for the record, as well, that Senator Blumenthal

joined us earlier, and as I said today, it is a busy Thursday, but

we are grateful for those who attended the hearing. We are certainly grateful for the expertise and experience brought to this

Committee by the witnesses.

As we heard today, rising health care costs are a terribly significant problem for so many Americans, and this issue has to be addressed. As hospital prices rise, individuals are increasingly faced

with the unacceptable decision, the awful decision to delay or forego necessary care or go into medical debt to receive lifesaving

health services. Improving transparency is one of the many policy

proposals that has the potential to help lower costs for patients.

As we heard today, especially from Ms. Tripoli, a broader rethinking of economic incentives in the health care sector is necessary to better meet the goal that we all share to improve health

for both patients and families. Along with transparency measures

we must continue efforts to address all factors impacting health

care costs.

We have heard from our witnesses today about the various factors driving up hospital costs, and we know that patients also

struggle with costs associated with prescription drugs, costs associated with doctor visits, and health insurance premiums.

I look forward to working with my colleagues to address rising

health care costs and ensure that all Americans can afford quality

care.

I will have Ranking Member Braun submit his closing remarks

for the record, and I want to thank again all of our witnesses for

being here, for taking the time to be with us, and to provide your

expertise to the Committee.

If any Senator has additional questions for the witnesses or

statements to be added to the hearing record, the record will be
25

open for seven days, until next Tuesday, July 18th. Thank you all

for participating today. We are adjourned.

[Whereupon, at 11:20 a.m., the hearing was adjourned.]
26

CLOSING STATEMENT OF SENATOR

MIKE BRAUN, RANKING MEMBER

Thank you, Chairman Casey. Thank you to our witnesses for

sharing your testimonies and personal experiences.

Today, we heard about the importance of health care price transparency and how access to this information will lower costs for

Americans. We need policies that empower patients and provide

employers with the information necessary to create the best health

care benefit for their employees. With transparency throughout the

health care supply chain, Americans will be able to see the cost of

health care services before they receive them. This will increase

competition and lower prices as patients have the ability to shop

around for the best price and highest quality.

I hope today we recognized that there are bipartisan solutions

that thoughtfully address this issue.

I am encouraged by the work being done by all of our witnesses

here today, and I appreciate our Committee’s focus on this issue.

I yield back.
APPENDIX

Prepared Witness Statements

31

1 Employer Health Benefits Survey. KFF. Published October 18, 2023. Accessed July 8, 2024.

https://www.kff.org/health-costs/report/2023-employer-health-benefits-survey

2 Centers for Medicare & Medicaid Services. Historical/CMS. https://www.cms.gov. Published

December 13, 2023. https://www.cms.gov/data-research/statistics-trends-and-reports/nationalhealth-expenditure-data/historical

3 Arnold D, Whaley CM. Who Pays for Health Care Costs? The Effects of Health Care Prices

on Wages. RAND Corporation; 2020. https://www.rand.org/pubs/working—papers/WRA621-

2.html

4 Baicker K, Chandra A. The Labor Market Effects of Rising Health Insurance Premiums.

Journal of Labor Economics. 2006;24(3):609-634. doi:10.1086/505049

5 Brot-Goldberg Z, Cooper Z, Craig SV, Klarnet LR, Lurie I, Miller CL. Who Pays for Rising

Health Care Prices? Evidence from Hospital Mergers. Published online June 2024. doi:10.3386/

w32613

6 Anand, Priyanka. 2017. Health insurance costs and employee compensation: Evidencefrom

the national compensation survey. Health Economics, 26(12): 1601 1616.

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

PREPARED WITNESS TESTIMONY

Dr. Chris Whaley

Chairman Casey, Ranking Member Braun, and members of the Committee, thank

you for the opportunity to testify today. My name is Christopher Whaley. I am an

associate professor of Health Policy at the Brown University School of Public Health

and Associate Director of the Center for Advancing Health Policy through Research

(CAHPR). My research focuses on health care price transparency, the impacts of

evolving health care markets, and studying employer and purchaser innovations

that are enabled by price transparency information.

In the United States, employers and purchasers of health care play a significant

role in shaping the U.S. healthcare system. Employers provide health insurance for

over 160 million Americans the largest source of health insurance in the United

States.1 In most cases, employers select employee plan offerings and thus determine

the types of health plans available to their employees and their families. Employers

also play a critical role in financing the U.S. healthcare system. Collectively, employer-sponsored insurance accounts for approximately $1.4 trillion in health care

spending.2The average premium for an employer-sponsored family health insurance

plan is now nearly $24,000. As health care spending has increased over the last two

decades, employers have reduced wages for workers.3 4 5 6

Particularly for lower-income households, rising health care costs for employersponsored insurance create financial burdens when receiving care, which can limit

access to care, because health benefits are financed from wages, employers have

both a legal and moral obligation to be responsible fiduciaries when they purchase

health benefits on behalf of their employees.

Unfortunately, many employers face challenges purchasing affordable health care

coverage that provides real value for their workers, as more often than not they are

having to make decisions while blind to prices for services in the marketplace. Many

employers cannot access plan claims data, limiting their ability to monitor prices negotiated on their behalf and prudently design plan offerings. Furthermore, even

when employers can access comparative cost information, they far too often face consolidated provider markets with limited access to lower-price, high-quality providers. The combination of a lack of price transparency and health care consolidation has made fulfilling their fiduciary obligations challenging for even the most engaged employers and purchasers.

My testimony today will focus on why making price information transparent is

critical for addressing health care affordability and ensuring efficient health care

markets. I will make three main points:

1. Health care prices in the United States are high and variable and are driven by provider consolidation and market power, and those high prices are not linked

to increases in quality.

2. Rather than placing the responsibility of navigating the US healthcare system on patients, effective price transparency can be a hub that enables impactful

programs and policies developed by employers and policymakers that improve access

to lower-priced, high-quality providers and ensure health market competition.
32

7 Anderson GF, Reinhardt UE, Hussey PS, Petrosyan V. It s The Prices, Stupid: Why The

United States Is So Different From Other Countries. Health Affairs. 2003;22(3):89-105. doi: doi.

https://www.org/10.1377/hlthaff.22.3.89

8Whaley CM, Kerber R, Wang D, Kofner A, Briscombe B. Prices Paid to Hospitals by Private

Health Plans: Findings from Round 5 of an Employer-Led Transparency Initiative. RAND Corporation; 2024. Accessed July 8, 2024. https://www.rand.org/pubs/research—reports/RRA1144-

2.html

9 Robinson J, Whaley C, Dhruva S. Prices and Complications in Hospital-Based and Freestanding Surgery Centers. The American Journal of Managed Care. 2024;30:179-184. Accessed

July 8, 2024. https://www.ajmc.com/view/prices-and-complications-in-hospital-based-and-freestanding-surgery-centers

10 Cooper Z, Craig SV, Gaynor M, Van Reenen J. The Price Ain t Right? Hospital Prices and

Health Spending on the Privately Insured. Q J Econ. Published online 2018. doi:10.1093/qje/

qjy020

11Liu JL, Levinson ZM, Zhou A, Zhao X, Nguyen P, Qureshi N. Environmental Scan on Consolidation Trends and Impacts in Health Care Markets. RAND Corporation; 2022. Accessed January 19, 2024. https://www.rand.org/pubs/research—reports/RRA1820-1.html

12Whaley C, Paul DRL, Perkins J. Addressing Site-of-Care Payment Differentials in the

United States Health Care System. Brown University School of Public Health 2024.Accessed

July 8, 2024. https://www.cahpr.sph.brown.edu/sites/default/files/documents/

Site%20Neutral%20Payment%20Policy%20Brief-2.pdf

13 Richards MR, Seward JA, Whaley CM. Treatment consolidation after vertical integration:

Evidence from outpatient procedure markets. Journal of Health Economics. 2022;81:102569.

doi:https://www.doi.org/10.1016/j.jhealeco.2021.102569

14Zhao X, Richards MR, Damberg CL, Whaley CM. Market Landscape and Insurer-Provider

Integration: The Case of Ambulatory Surgery Centers. Health affairs scholar. 2024;2(6).

doi:https://www.doi.org/10.1093/haschl/qxae081

15 Rooke-Ley H, Shah S, Fuse EC. Medicare Advantage and Consolidation s New FrontierThe

Danger of UnitedHealthcare for All. New England Journal of Medicine. Published online July

6, 2024. doi:https://www.doi.org/10.1056/nejmp2405438

3. There are potential steps Congress and the federal government could consider to increase both transparency on prices and ownership structure in health care

markets and enable price transparency to reach its cost-containment potential.

U.S. Health Care Prices are High and Variable

The United States leads the world in health care spending, largely due to high

prices.7 Prices also vary considerably, both within and across markets. Several studies document substantial variation in U.S. health care prices. My recent research

shows employer and private insurance prices for hospital care average 254 percent

of Medicare. However, prices are below 200 percent of Medicare in states like Arkansas, Iowa, and Michigan, but over 300 percent of Medicare in states of West Virginia, Florida, and Georgia.8 In addition, both Medicare and commercial insurers

pay roughly twice as much for common services, such as laboratory tests, diagnostic

imaging services, and outpatient surgeries, performed in hospital-based settings

than non-hospital sites of care.9

High and variable health care prices are often not linked to quality and are driven

by provider consolidation and market power. Over the last two decades, U.S. health

care provider markets have experienced three main types of consolidation. The first

involves horizontal consolidation, primarily driven by hospital and health system acquisition of other hospitals. U.S. health care markets have seen over 2,000 hospital

mergers. Hospital mergers lead to meaningful increases in prices, without improvements in quality.10 11 The second form of consolidation involves vertical consolidation, where large entities, primarily hospitals and health systems, acquire intermediaries, primarily physician practices. Over the last decade, the share of U.S.

physicians employed by a hospital or health system has approximately doubled.

Currently, over half of U.S. physicians are employed by a hospital or health system.

Driven by site-of-care payment differentials in both Medicare and commercial payment rates, this form of consolidation changes referral patterns for many downstream services, thereby increasing both Medicare and commercial spending.12 13 A

more recent form of vertical integration involves insurers directly acquiring both

physician practices and other types of providers.14 Particularly for Medicare Advantage populations, this form of consolidation raises concerns about access to care and

payment gaming.15 Finally, the latest wave of health care consolidation is driven

by private equity, which owns a growing share of U.S. physician practices. Studies

show private equity acquisition leads to price increases without commensurate gains

in access or quality. Importantly, these models of consolidation disadvantage the
33

16Prager E, Schmitt M. Employer Consolidation and Wages: Evidence from Hospitals. American Economic Review. 2021;111(2):397-427. doi:https://www.doi.org/10.1257/aer.20190690

17Whaley CM, Arnold DR, Gross N, Jena AB. Physician Compensation In Physician-Owned

And Hospital-Owned Practices. Health Affairs. 2021;40(12):1865-1874. doi:https://www.doi.org/

10.1377/hlthaff.2021.01007

18 Beaulieu ND, Dafny LS, Landon BE, Dalton JB, Kuye I, McWilliams JM. Changes in Quality of Care after Hospital Mergers and Acquisitions. New England Journal of Medicine.

2020;382(1):51-59. doi:https://www.doi.org/10.1056/nejmsa1901383

19Levin JS, Komanduri S, Whaley C. Association Between Hospital, Physician Vertical Integration and Medication Adherence Rates. Health Services Research. Published online October

22, 2022. doi:https://www.doi.org/10.1111/1475-6773.14090

20Whaley CM, Zhao X, Richards M, Damberg CL. Higher Medicare Spending On Imaging And

Lab Services After Primary Care Physician Group Vertical Integration. Health Affairs.

2021;40(5):702-709. doi:https://www.doi.org/10.1377/hlthaff.2020.01006

21Whaley C, Chafen Schneider J, Pinkard S, et al. Association Between Availability of Health

Service Prices and Payments for These Services. Journal of the American Medical Association.

Published online October 22, 2014.

22Desai S, Hatfield LA, Hicks AL, Chernew ME, Mehrotra A. Association Between Availability of a Price Transparency Tool and Outpatient Spending. JAMA. 2016;315(17):1874-1881.

doi:10.1001/jama.2016.4288

23Desai S, Hatfield LA, Hicks AL, et al. Offering A Price Transparency Tool Did Not Reduce

Overall Spending Among California Public Employees And Retirees. Health Affairs.

2017;36(8):1401-1407. doi:10.1377/hlthaff.2016.1636

24 Chernew M, Cooper Z, Hallock EL, Scott Morton F. Physician agency, consumerism, and

the consumption of lower-limb MRI scans. J Health Econ. 2021;76:102427. doi:10.1016/

j.jhealeco.2021.102427

healthcare workforce, with physicians and nurses receiving lower pay following consolidation.16 17

While high and variable prices directly impact those with commercial insurance,

they also have important implications for aging Americans. First, many over-65 individuals receive private insurance, most commonly from current or former employers, and are thus impacted by high and variable prices. Second, numerous studies

show the health impacts of high healthcare costs for patients in the form of reductions in high-value and necessary care. For the under-65 population to age healthily,

it is critical that they have access to affordable health care. Finally, high and differential prices drive health care consolidation, which erodes access to and quality

of care for Medicare beneficiaries.18 19 20

What is the role of price transparency in addressing rising health care

costs?

Due to the high and variable nature of U.S. health care prices, improving price

transparency has been a potential policy option for several years. Early price transparency models relied on patient-driven use through apps and online tools.21 Despite initial promise, these models had little success.22 23 Relying on patients to

navigate the complexities of the U.S. healthcare system with even the best price

transparency tools is a challenging task.24 However, the lack of usable price transparency limits the ability of researchers to understand health care markets, entrepreneurs from adding competition to healthcare markets, and regulators from monitoring market conduct and competition. Rather than placing the responsibility of

navigating the US healthcare system on patients, effective price transparency can

be a hub that enables impactful programs and policies. Several employers and purchasers have used price transparency to redesign benefits.

Example 1: California Public Employees Retirement Systems (CalPERS)

The California Public Employees Retirement System (CalPERS), which provides

health benefits to approximately 1.4 million individuals, recognized the wide variation in prices within their network that was not tied to clinical outcomes. Rather

than implementing a punitive high-deductible plan, they worked in conjunction with

their labor representatives to design a steerage program that uses financial incentives to encourage the use of lower-priced providers and non-hospital providers.
34

25 Robinson JC, Brown TT. Increases In Consumer Cost Sharing Redirect Patient Volumes

And Reduce Hospital Prices For Orthopedic Surgery. Health Affairs. 2013;32(8):1392-1397.

doi:https://www.doi.org/10.1377/hlthaff.2013.0188

26 Robinson JC, Brown TT, Whaley C, Finlayson E. Association of Reference Payment for

Colonoscopy With Consumer Choices, Insurer Spending, and Procedural Complications. JAMA

Internal Medicine. 2015;175(11):1783. doi:https://www.doi.org/10.1001/jamainternmed.2015.4588

27 Robinson JC, Brown TT, Whaley C. Reference Pricing Changes The Choice Architecture Of

Health Care For Consumers. Health Affairs. 2017;36(3):524-530. doi:https://www.doi.org/10.1377/

hlthaff.2016.1256

28Murray RC, Brown ZY, Miller S, Norton EC, Ryan AM. Hospital Facility PricesDeclined As

A Result Of Oregon s Hospital Payment Cap. Health Affairs. 2024;43(3):424-432. doi:https://

www.doi.org/10.1377/hlthaff.2023.01021

29SEIU 32BJ Healthcare Savings Case Study. PatientRightsAdvocate.org. Accessed July 8,

2024. https://www.patientrightsadvocate.org/seiu-32bj-healthcare-savings-case-study

30 Abelson R. Many Hospitals Charge Double or Even Triple What Medicare Would Pay. The

New York Times. https://www.nytimes.com/2019/05/09/health/hospitals-prices-medicare.html.

Published May 9, 2019.

31Mathews AW. These Employers Took On Healthcare Costs, and the Fight Got Nasty. WSJ.

Published September 28, 2023. https://www.wsj.com/health/healthcare/these-employers-took-onhealthcare-costs-and-the-fight-got-nasty-54674114

32Whaley CM, Vu L, Sood N, Chernew ME, Metcalfe L, Mehrotra A. Paying Patients To

Switch: Impact Of A Rewards Program On Choice Of Providers, Prices, And Utilization. Health

Affairs. 2019;38(3):440-447. doi:https://www.doi.org/10.1377/hlthaff.2018.05068

33Whaley CM, Dankert C, Richards M, Bravata D. An Employer-Provider Direct Payment

Program Is Associated With Lower Episode Costs. Health Affairs. 2021;40(3):445-452. doi:https://

www.doi.org/10.1377/hlthaff.2020.01488

Across several services, this program reduced spending by approximately 20 percent

and improved care quality.25 26 27

Example 2: State of Oregon Hospital Reimbursement Caps and All-Payer Claims

Database

A similar example comes from the State of Oregon. Recognizing the wide variation

in hospital prices, Oregon passed legislation that caps the prices of hospital care at

200 percent of the Medicare rates for Oregon’s public employees and educators. My

colleagues have demonstrated that this program led to over $100 million in savings

in the first two years of the program, without impacts on the quality of care or the

provider workforce.28 If adopted among other states, we estimate that this model

could reduce public employee spending by approximately $7 billion, which could be

used to increase public employee pay or returned to taxpayers, and nearly $90 billion if expanded to the broader commercial market. Oregon also invested in an allpayer claims database, which allows state authorities to monitor price and spending

trends.

Example 3: 32BJ Health Fund - Private-Sector Adoption of Innovations

These innovations are also being adopted by private-sector organizations. In one

notable example, the 32BJ Health Fund, which provides health benefits to approximately 200,000 service workers, reviewed its claims data and realized some providers had exceptionally high prices. After several attempts at negotiation, 32BJ excluded a single hospital from its network. This decision saved the Health Fund approximately $100 million per year, which it returned to its workers in the form of

the largest worker pay increase in its history and a $3,000 bonus for each member.29

Example 4: Indiana employers using data to push for policy changes

Another example comes from employers in the state of Indiana. Through the Employer s Forum of Indiana, we worked with Indiana employers to analyze their

claims data and found they were paying some of the highest prices in the country.30

In addition to using price transparency data to monitor prices negotiated on their

behalf and to inform both benefit design and purchasing decisions, Indiana employers pushed for legislation that limits facility fees and adds additional transparency

to Indiana health care markets.31 These efforts use price transparency data to add

oversight into an opaque market and inform policies that improve market competition.

These are notable examples and there are many more entrepreneurs and

innovators that are using price transparency data to develop similar programs that

steer patients to lower-priced providers,32 modernize payment methods in ways that

align incentives between patients, providers, and payers,33 and add competition to

health care markets.
35

34Department of Health and Human Services. 45 CFR Part 180. Published November 27,

2019. https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-E/part-180#180.40

35FAQS about Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 49.; 2021. https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/

FAQs-Part-49.pdf

36MRF Tracker. Turquoise Health.Accessed July 8, 2024. https://www.turquoise.health/mrf—

tracker

37Patient Rights Advocate. Sixth Semi-Annual Hospital Price Transparency Report February

2024. Patient Rights Advocate; 2024. https://www.patientrightsadvocate.org/semi-annual-reportfeb2024

38Mittler JN, Abraham JM, Robbins J, Song PH. To be or not to be compliant? Hospitals initial strategic responses to the federal price transparency rule. Health Services Research. Published online November 6, 2023. doi:https://www.doi.org/10.1111/1475-6773.14252

While these policies and programs are designed to fit the needs of each group’s

market and population, a common theme is that each group relied on price and network data, most commonly from medical claims data, to innovate. These organizations also take seriously their responsibilities as health care purchasing fiduciaries.

These types of models are critical to ensure affordable access to high-quality providers across the aging lifecycle.

What more can be done to enable price transparency to reach its cost

containment potential?

In recognition of the importance of price transparency, recent federal policies have

sought to expand access to price transparency information. On January 1, 2021, requirements for hospitals to negotiate their prices for all items and services went into

effect.34 Following that, on July 1, 2022, a federal rule went into effect that requires

health plans to disclose the negotiated prices they pay physicians and facilities for

each item they provide, known as Transparency-in-Coverage (TiC) data.35 Both of

these policies greatly expand health care price transparency.

While there have been some concerns with the implementation of the rules, there

have been significant positives to each. The insurer-posted (TiC) data provides the

most comprehensive view of U.S. health care prices currently available. There were

initial concerns about the TiC data usability, but researchers, including myself, have

been able to use data to measure price variation. Entrepreneurs are also using these

data to improve benefit design innovations.

While these data are important, they, like most things, can also be improved.

There are several steps Congress and the federal government could consider to increase price transparency in health care markets and enable price transparency to

reach its full cost-containment potential.

Increase compliance enforcement and standardization of hospital-posted price

transparency data

The hospital-posted price transparency data represent an initial step into expanding access to price transparency. However, compliance with requirements to post negotiated rates for 300 shoppable services could have been better, largely due to more

enforcement. While recent enforcement has increased, compliance still needs to improve, with estimates suggesting that only 16 to 35 percent of hospitals are fully

compliant.36 37 Other studies find strategic non-compliance is related to a hospital

s market environment.38 Even among complying hospitals, data formats, reported

services, and price measurements vary widely. To ensure that these data are useful

for informing policy decisions, it is important for CMS to enforce compliance and

standardize data submission.

Reduce the duplicative prices and prices for providers that do not perform listed

services from the TiC data and centralize data posting

The TiC data include many duplicative prices and prices for providers that do not

perform listed services. These features greatly inflate the size of the TiC data, reducing its applicability and accuracy. Second, the TiC data are completely updated

on a monthly basis, which further adds barriers to data use. To further improve this

innovative resource, CMS could require insurers to only post prices for providers

with submitted claims for a given procedure. CMS could also limit monthly updates

to new or changed prices, rather than a complete data refresh.

Additionally, the TiC data are currently hosted individually by plans and insurers. CMS could centralize TiC data by acting as a central hub for hosting these

data. The data are also currently posted in non-standard data formats, which contributes to inflated data size. CMS could use common modern database technologies
36

39The Perils Of PECOS: Using Medicare Administrative Data To Answer Important Policy

Questions About Health Care Markets. Forefront Group. Published online January 7, 2021.

doi:https://www.doi.org/10.1377/forefront.20201222.615286

40 Hearing on Strengthening U.S. Economic Leadership: The Role of Competition in Enhancing

Economic Resiliency. Published online 2024. https://www.judiciary.senate.gov/committee-activity/

hearings/strengthening-us-economic-leadership-the-role-of-competition-in-enhancing-economic-resiliency

41 Consolidated Appropriations Act, 2021 (CAA)/CMS. https://www.cms.gov. https://

www.cms.gov/marketplace/about/oversight/other-insurance-protections/consolidated-appropriations-act-2021-caa

42Kraft Heinz Co. Employee Benefits Administration Board, et al., v. Aetna Life Insurance

Company, 2:23-cv-00317, District Court, E.D. Texas, June 30, 2023, https://

www.versanconsulting.com/post/kraft-heinz-co-employee-benefits-administration-board-et-al-vaetna-life-insurance-company; Massachusetts Laborers Health & Welfare Fund v. Blue Cross

Blue Shield of Massachusetts, 66 F.4th 307 (1st Cir. 2023), April 25,2023, https://

www.casetext.com/case/mass-laborers-health-welfare-fund-v-blue-cross-blue-shield-of-mass-1;

Owens & Minor, Inc. and Owens & Minor Flexible Benefits Plan v. Anthem Health Plans of

Virginia, Inc., 3:23-cv-00115, February 13, 2023, https://www.millerchevalier.com/sites/default/

files/resources/General—Alerts/2023-02-13—Owens-v-Anthem—Complaint.pdf; Bricklayers,

Craftworkers, Sheet Metal Workers Unions v. Elevance, 3:22-cv01541-VLB, December 5, 2022,

https://www.documentcloud.org/documents/23378734-bricklayers-craftworkers-sheet-metal-workers-unions-v-elevance.

43 118th Congress S.3548 - Health Care Prices Revealed and Information to Consumers Explained Transparency Act. https://www.congress.gov/bill/118th-congress/senate-bill/3548/all-info

to allow a broad set of users to access the data and substantially reduce data size

and complexity without losing any valuable data.

Require a centralized national database to enhance transparency of provider ownership and control

While existing transparency efforts primarily focus on prices, provider ownership

and affiliation arrangements are often complex and opaque. Existing data resources

do not adequately track ownership structure, limiting appropriate measurement of

consolidation activities and policies to guard against adverse impacts of consolidation.39 Researchers, and importantly, policymakers, lack comprehensive data on who

owns or controls health care entities and physician practices. Many provider organizations are organized through complex corporate structures that obscure the identity of the owner or control entity and prevent accountability.40 Patients often have

little information on their physician s actual employer. As a result, estimates of both

the extent and impacts of consolidation are limited and incomplete. Ownership

transparency could be improved by requiring provider organizations to report not

just direct ownership but also management, joint venture, and related arrangements. Developing a centralized national database to enhance the transparency of

provider ownership and control will allow for a more complete understanding of the

true extent and effects of consolidation in US health care markets, including

changes in prices, utilization, and quality of care.

Ensure that self-funded purchasers have access to data on price, utilization, and

quality

While these efforts have been primarily focused on expanding access to publiclyavailable price transparency data, many employers and self-funded purchasers rely

on medical claims data to measure prices, track quality, and ensure access to efficient providers. Yet, many employers and purchasers face barriers in accessing their

medical and pharmacy claims data. The 2021 Consolidated Appropriations Act

(CAA) removes many restrictive and anti-competitive clauses from plan contracts,

but does not ensure that self-funded purchasers have access to their claims data.41

As a result, many employers have had to sue to get access to their own data.42 It

is important that purchasers have access to data on price, utilization, and quality

that these data provide. Proposed bipartisan legislation codifies access to these data,

which are necessary for self-funded plans to be responsible fiduciaries and monitor

prices negotiated on their behalf.43

Conclusion

Health care prices in the United States are high, variable, and opaque. High

prices are both a cause and a consequence of health care consolidation, which has

left many communities with a single provider system and worsened access to highquality care. Arguably, the most significant bipartisan federal agreement in recent

years has centered on enhancing transparency in healthcare pricing. In combination

with expanded insight into provider ownership and management, broadened transparency can help employers and health care purchasers fulfill their fiduciary obliga-
37

tions to provide access to high-quality and affordable care. It also aids regulators

and policymakers in overseeing healthcare market competitiveness and ensuring patient access to high-quality, cost-effective care. While not a cure-all for the U.S.

healthcare system, given the widespread impact on all individuals navigating the

healthcare system, these initiatives enjoy substantial public backing. To accomplish

these goals, Congress can improve the existing Transparency-in-Coverage policies

that provide substantial insight into US health care prices, ensure transparent reporting of provider ownership and management, and codify self-funded employer

and purchaser access to their claims data.
38

1 https://www.nj.com/education/2024/07/nj-schools-are-cutting-hundreds-of-jobs-this-summerheres-why.html

2https://https://www.turquoise.health/health—systems/mayo-clinic/services/

?q=Arthrocentesis+%28drainage%29+of+joint&service—name=arthrocentesis-drainage-of-joint

3https://https://www.turquoise.health/health—systems/university-of-pennsylvania-health-system/service—category/musculoskeletal/

4 htttps://https://www.dockets.justia.com/docket/california/cacdce/8:2020cv00269/772742 See attached TML Recovery Services, Ltd. unsealed exhibit

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

PREPARED WITNESS TESTIMONY

Chris Deacon

Chairman, Ranking Member, and distinguished members of the Committee,

Thank you for the opportunity to testify today on the critical issue of transparency

in healthcare. Imagine, if you will, you are the CFO of a company where you give

the company credit card to your vendors and suppliers. Instead of receiving an

itemized statement at the end of the month, you are handed a sheet of paper with

one number-no receipts, no details, just the total amount owed. No employer would

ever allow such a practice. Yet, this is exactly what happens in our healthcare system today. Employers hand over the company credit card to Blue Cross Blue Shield,

Aetna, United, Cigna, Optum and CVS, allowing them to pledge company dollars

to a healthcare system that can charge whatever they want, however they want,

simply because they can.

Where are the checks and balances in healthcare? Balance necessarily requires

equal access to information, and that is why we are here today.

Transparency. Or rather, the lack of transparency facing employers and unions

that are responsible for purchasing healthcare for over 160 million Americans.

You likely know the statistics and the alarming rate at which healthcare costs are

growing, but I know the people behind these statistics. As former administrator for

the State of New Jersey employee health plan I know first-hand how the lack of

transparency impacts our teachers, firemen, police officers, and public sector workers. Sadly, this year in New Jersey over 200 school positions will be eliminated due

to budget constraints, driven in large part by the cost of health benefits.1

ERISA, which governs most employer sponsored health plans in the country, is

intended to protect plan participants and beneficiaries by mandating that plan sponsors act as fiduciaries. When employers lack access to their own data and transparent information about the cost and quality of care, they are unable to fulfill

ERISA’s promise.

Let me share three examples to illustrate the magnitude of this issue:

–At Mayo Clinic in Jacksonville, if you were to use your Federal Employee

Health Benefit BCBS card for an arthrocentesis procedure it would cost you and the

federal government $2,516.2 If you were to pay cash for the same procedure, you

would pay just $392.60. That is six times more than the cash rate. At University

of Pennsylvania Hospital, the cash price for an ACL repair is $9,523.36,3 but if you

are a service member covered by TRICARE, your price is $37,489.74, that is 294%

more than the cash rate.

–Or consider when a third-party administrator, or TPA, pays twice for a

claim in error, or pays for an improperly upcoded claim, because TPAs act as middlemen, similar to a PBM, and uses the employer’s funds to pay claims, they bear

none of the risk. And when a TPA pays the inflated or improper bill with the employer or unions’ funds, there is no obligation for the TPA to recover those payments. If, and I emphasize IF, the employer is lucky enough to benefit from an attempted recovery, it will be less the TPA’s savings fee, ranging anywhere from 25-

50%. This is the ultimate fox guarding the hen house.

–But TPA’s are not always ′′overpaying;′′ in fact, quite often they are paying

providers one sum, and then charging the employer many times more for the same

claim. In several recently unsealed court documents it was revealed that an employer sponsored health plan paid $4,078,652.42 on a claim, but the provider only

received $875,809.76.4 What accounted for the difference? Cigna took $2,524,898.98

in fees, and their subcontractor Multiplan took $677,943.68. The fees were 2.9 times

the provider’s payment.
39

These examples are the tip of the iceberg in terms of the waste, abuse and inefficiencies in the current market, driven in large part by lack of transparency and

meaningful access to data. Though we may increasingly be able to pull up the hospital prices, and carrier negotiated rates, unless and until employers are able to

have access to run their own numbers, identifying this type of conduct will remain

elusive to employers and unions.

If we expect employers and unions to exert any type of market forces to reign in

healthcare costs, we must empower them with actional data and transparent pricing. The company credit card has been abused for too long by the PBMs, TPAs and

other industry players. It should not be unreasonable to demand for receipts of payment, itemized statements, and the ability to protect their members. This is what

S3548 uniquely accomplishes, in a superior manner, in my opinion to the Lower

Cost More Transparency Act. Federal lawmakers must rebalance the information

asymmetry to empower employer purchasers and unions to push back against egregious pricing, unfair billing practices, gross overreach, and profiteering. This will

help protect the American workers’ paychecks and ensure a fairer, more accountable

healthcare system.

Thank you.
40

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

PREPARED WITNESS TESTIMONY

Cora Opsahl

Good morning. Thank you Chairman Casey, Ranking Member Braun, and the rest

of the Committee on Aging for inviting me to speak this morning.

My name is Cora Opsahl, and I am the Director of the 32BJ Health Fund. The

32BJ Health Fund is a self-insured, Taft-Hartley benefit fund that provides health

benefits to over 200,000 union members and their families. Our members are essential workers who work in the real estate industry, security officers, school workers,

and airport workers. We are based primarily in the New York/New Jersey area, but

we have families up and down the East Coast including Pennsylvania and Massachusetts. The Fund is jointly governed by a board of trustees appointed by the

Union and the Employers, and we provide high-quality health benefits with no premium sharing, $0 in-network deductibles, and low in-network copays. We believe

the fund has an important role in tackling the problem of healthcare affordability,

and we have spent over a decade doing just that by leveraging our data, challenging

the status quo, and finding innovative ways to manage our benefit.

Having access to our claims data is foundational to our work. For almost 20 years,

we have been fortunate to have access to our medical, pharmacy, and ancillary

claims data. We use this data to understand our healthcare spend, make benefit decisions, and ensure we are a good steward of the Fund’s resources, because of our

data, we know the following:

–In 2023, we spent $1.4 billion in healthcare.

–Of the $1.4B we spend in healthcare, 55% is spent on inpatient and outpatient care

–In 2021, we paid 271% over Medicare prices for the same care, which is up

from 219% of Medicare in 2016

–In the past 10 years, healthcare has risen from 17% of total compensation

to 37% of total compensation; wages have gone up 54% but healthcare costs have

increased 230%; and to put that into a dollar amount, our members could have had

$5,000 more in annual wages had healthcare spend risen at the same rate of inflation

While having your data and being able to see how your benefit is being spent is

important, as a plan we know this is only the first step. The next step is taking

action on this data.

In 2018, after spending over 10 years looking at our claims data, it became abundantly clear to us that we needed to address the prices we were paying. The data

showed we were paying wildly different prices for the same procedures, depending

on what hospitals our members went to. For example, we were paying approximately $10,000 for a colonoscopy at NY Presbyterian system versus approximately

$4,000 at Mount Sinai Hospital system. The same pattern was true at other highpriced hospitals. Based on our data, we tiered our network on price beginning in

2019. Members could still access the higher priced hospitals, but they would have

to pay higher copays to do so.

While we had won the right to tier our plan in 2019, in 2021, NY Presbyterian

and our carrier, Anthem, were up for their network renewal. During that renewal,

NY Presbyterian told Anthem they would have to be preferred in all networks,

leveraging a clause in their contract. Eventually, NY Presbyterian granted the Fund

permission to remove them from our network only in 2022. This change has saved

the plan approximately $30M every year by members receiving care from lower

priced facilities and providers. Additionally, in the most recent contract negotiations, the union and employers leveraged the savings in our benefits to give union

members a one-time bonus, the largest wage increase in contract history, a pension

increase, and limit employer premium contribution increases to no more than 3%

every year through 2027.

While these benefit changes showcased our ability to leverage our data, both

changes also illuminated the contract terms between providers and carriers that obstruct, hinder, and limit the ability for us or any employers to take action on their

data.

Recently, the Health Fund led a procurement for a medical and hospital benefit

third party administer, or carrier. We were adversely affected by anti-competitive
41

contract provisions between providers and carriers. The provider contracts included

items such as requirements to be in network, anti-steering and anti-tiering provisions, limitations in how claims are allowed to be paid, and even limitation in access

to claims data. For us, the network inclusion and other contracting demands of hospitals limited participation of TPA bidders in our procurement process. Every TPA

bidder, except one, was unable to meet our network requirements, including that

NY Presbyterian remain out of network. Other network provider contract provisions

routinely demanded by hospitals include restrictions on retroactive claim reviews,

exclusion of lesser-of provisions, and limitations on overpayment recoupment. None

of those contract provisions are beneficial for employer sponsored plans or their

membership. This is just one example of how difficult it is for employers and selffunded plans, even of our size, to have a highly competitive bid process.

While our bidding process faced limitations by the anti-competitive contracting

provisions in provider and carrier contracts, we would not be where we are without

access to our data, allowing the Union and Employers to give raises and limit premium increases ensuing our members can continue to have access to high quality

and affordable care. Employers having access to their claims data and the terms in

which their benefits are being managed are essential for them to be able to do the

same thing. That s why we need the Braun Sanders bill, and section seven in particular.

Thank you for having me.
42

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

PREPARED WITNESS TESTIMONY

Sophia Tripoli

Chairman Casey, Ranking Member Braun, members of the Committee, thank you

for the opportunity to testify at this critical hearing focused on health care affordability and the harmful impact of medical monopolies that flourish under our health

care system’s lack of transparency and healthy competition. It is an honor to be with

you today.

My name is Sophia Tripoli, and I am the Senior Director of Health Policy at Families USA. For more than 40 years, Families USA has been a leading national, nonpartisan voice for health care consumers working to achieve our vision of a nation

where the best health and health care are equally accessible and affordable to all.

In October 2022, we launched the Center for Affordable Whole Person Care to affirm and enhance our commitment to revolutionize America’s health care system to

hold the health care industry accountable for delivering affordable, equitable, highquality and person-centered health care.

We greatly appreciate the work of this Committee to examine and advance bipartisan solutions to lower costs and improve health system transparency for aging

Americans and families across the country. This work is urgently needed: Our

health care system is in crisis, evidenced by a severe lack of affordability and poor

quality. It is going to take all of us working together, across political party and

health policy philosophy, from rural and urban communities alike, to fix it.

You have the support of the American public as you work to address these issues.

Ninety-three percent of Americans agree that our country is paying too much for

the quality of health care we receive, and more than half of adults in that same

poll said that their most recent health care experience was not worth the cost.2 The

majority of Americans now rate the quality of health care as subpar, including 31%

saying it is ‘only fair’ and 21% calling it ‘poor.’3 Recent polling shows that almost

90% of voters say it is important for this Congress to take action to reduce high

health care prices, particularly hospital prices, including 95% of Biden voters and

85% of Trump voters.4

The U.S. Health System in Crisis: Harming Families, Workers, Employers,

and Taxpayers

The United States is in the midst of a health care affordability and quality crisis.

High and rising health care prices, particularly for hospital stays and prescription

drugs, are a direct threat to the health and wellbeing of every American, negatively

impacting our access to health care, our ability to earn a living wage, and the health

of our national and local economies. At its core, this crisis is driven by a fundamental misalignment between the business interests of the health care sector and

the health and financial security of our nation’s families - a business model that allows industry to set prices that have little to do with the quality of the care they

offer.

Broken incentives within our current system reward building local monopolies

and price gouging instead of rewarding success in promoting the health, wellbeing

and financial security of families and communities.5 This is particularly acute when

looking at the shifting role of hospitals in our economy over the last 60 years.6 What

were once local charitable institutions built to serve the community have now become large corporate entities focused on maximizing revenue rather than improving

health.7 Americans in far too many communities have watched as their local hospitals became health systems, and those health systems were bought by large health

care corporations. What many in the public and policymaking community are beginning to realize is how much this has destroyed any real competition in our health

care sector, allowing hospitals to dramatically increase their prices every year with

little to no transparency into the true costs associated with delivering care.8 And

health care consumers have been left holding the bag.

Impact on Families and Workers

More than 100 million Americans face medical debt; a quarter of all Americans

forgo needed medical care due to the cost; and a third of Americans indicate that

the cost of medical services interferes with their ability to secure basic needs like
43

buying groceries and paying rent.9 In addition, more than a quarter of older Americans, who spend more on health care than any other age group, report being very

concerned they will be unable to pay for lifesaving health care in the future.10

Not only do consumers and patients experience high health care prices in the form

of expensive medical bills, but high health care costs also affect the economic vitality

of middle-class and working families by crippling the ability of working people to

earn a living wage. Rising prices are a major contributor to skyrocketing health insurance costs, which come directly out of workers’ paychecks as annual increases

in premiums and cost sharing.11 This results in stagnating wages, rising income inequality, and ultimately leaves workers with less in take home pay over time, making it more difficult for them to afford housing, pay their regular expenses, send

their children to school, and retire.12

Today’s real wages - wages after accounting for inflation - are roughly the same

as four decades ago, yet employer health insurance premiums have risen dramatically.13 The total cost of a family employer-sponsored insurance (ESI) plan increased

an astounding 272% in the past two decades, rising from $6,438 annually in 2000

to $23,968 in 2023.14 As a result, a U.S. family of four with a median income of

roughly $95,000 annually is estimated to have lost more than $125,000 in wages

over roughly the same time period.15 A recent analysis by Families USA found that

if policymakers do not take action to rein in high and rising hospital prices and the

harmful business practices of large heath care corporations, low- and middle-income

workers - a group that disproportionately includes people of color - could lose another $20,000 in wages by 2030.16 At the same time, nearly 90% of large employers

say that rising health care costs will threaten their ability to provide health care

benefits to employees over the next five to 10 years if costs are not lowered.17 The

rising costs of health care have already contributed to record numbers of businesses

no longer providing critical worker benefits, including retiree health benefits, disproportionately harming older adults who rely on these benefits during retirement.

As a result, older Americans are increasingly exposed to high and rising health care

costs. In fact, out-of-pocket health care spending for older Americans grew a staggering 41% between 2009 and 2019.18

To make matters worse, workers are increasingly subjected to health insurance

plans with larger cost-sharing requirements, including higher-deductible health

plans, in an effort to contain rising health care spending and costs. Deductible-related costs for workers have grown significantly, with the average annual deductible

for an individual employee’s coverage nearly doubling in just a decade, from $1,025

in 2010 to $2,004 in 2021.19 Importantly, the 153 million Americans who rely on

ESI for health insurance cannot always access the care they need, with more than

a quarter putting off or postponing needed medical care due to the high cost.20

Impact on Taxpayers and Our Economy

High and rising health care costs not only threaten the health and financial security of American individuals and families but are also a critical problem for the federal government, state governments, and taxpayers. National health expenditures

(NHE), which includes both public and private spending on health care, have grown

from $27.1 billion in 1960 to nearly $4.5 trillion in 2022.21 Relative to the size of

the economy, NHE grew from 5% of gross domestic product (GDP) in 1960 to 17.4%

in 2022.22 The largest proportion of this spending is on hospital care, which accounts

for a 30 percent share at a whopping $1.4 trillion annually.23

The situation is expected to get much worse, with NHE projected to climb to $7.2

trillion by 2031, and high and rising health care costs projected to continue to grow

faster than the economy, hitting nearly 20% of GDP by 2031.24 That means a fifth

of our economy will be spent on health care. This far outpaces what similarly situated countries spend on health care: On a per capita basis, the U.S. spent $12,555

in 2022 - over $4,000 more per person than any other peer nation.25

Notably, the excessive cost of health care does not generally buy Americans higher-quality care or even higher volumes of care. In fact, the opposite is true. Despite

spending two to three times more on health care than other peer countries, the

United States has some of the worst health outcomes, including some of the lowest

life expectancy and highest infant mortality rates.26 These health outcomes are even

worse for people of color who experience higher rates of illness and death across a

range of health conditions compared with their white counterparts.27 And the vast

majority of our nation’s seniors have at least one chronic health condition, with

many dealing with multiple health issues.28
44

Lack of Transparency Provides Cover to Medical Monopolies and their

Unjustifiably High Prices

Importantly, America’s health care affordability crisis stems from high, rising, and

variable prices across a wide range of health care goods and services, particularly

for hospital care and prescription drugs. For example, the price of Humira - a drug

used to treat arthritis - is more than four times as expensive in our country as in

the United Kingdom and almost twice as expensive as in Germany.29 The average

price of a hospital-based MRI in the United States is $1,475,30 while that same scan

costs $503 in Switzerland and $215 in Australia.31

What’s more, health care is one of the only markets in the U.S. economy in which

consumers are blinded to the price of a service until they receive a bill after the

services are delivered.32 Consumers and employers, who are the ultimate purchasers

of health care, have limited insight into what the prices of health care goods and

services are. For the majority of Americans (66%) who receive health care through

private insurance, health care prices are established in closed-door negotiations between large hospital corporations and health plans based on who has more market

power.33 These health care prices, often referred to as the negotiated rate, are buried in proprietary contracts without insight into or oversight over the price of health

care services by the public and policymakers.34

These exorbitant, opaque, and unjustifiable prices are largely due to trends in

health care industry consolidation across the U.S. that have eliminated healthy competition and allowed monopolistic pricing to flourish.35 This consolidation has taken

place without meaningful regulatory oversight or intervention, and is becoming

more acute.36

The end result is a system with few truly competitive health care markets left:

95% of metropolitan statistical areas (MSAs) having highly concentrated hospital

markets, nearly 80% of MSAs having highly concentrated specialist physician markets, and 58% of MSAs having highly concentrated insurer markets.37 Consolidation

has been particularly pronounced among hospitals, drug companies, and pharmacy

benefit managers and is made worse by the increasingly harmful role of private equity firms in the U.S health care system:

–Hospitals, health systems and other providers have rapidly consolidated, via

horizontal and vertical integration, into large health care corporations, amassing

outsized market power in order to increase prices for hospital care year after year.

In fact, over 1,500 hospital mergers have occurred between 1998 and 2017, with an

estimated 40% of those mergers taking place from 2010 to 2015.38 Moreover, between 2013 and 2021, the percentage of physician practices that were hospitalowned rose from 15% to 53%, and the percentage of physicians employed by a hospital rose from 27% to 52%.39

–Drug manufacturers have increasingly engaged in anti-competitive behavior

and transactions to similarly amass significant market power, regularly buying up

or paying off their competition in order to game the U.S. patent system and price

gouge our nation’s families for prescription medications. The vast majority (70%) of

drug industry profits now go to only a small number (25) of the top prescription

drug companies in the country.40

–Pharmacy benefit managers, as third-party administrators designed to serve

as middlemen between health insurers and drug makers, have increasingly merged

with insurers and pharmacies to increase their own market power to negotiate pricing structures that serve their financial interests, often to the detriment of securing

more affordable prescription medicines for consumers. This has led to the top three

PBMs controlling 80% of the PBM market.41

–Health insurers are increasingly consolidated. Between 2006 and 2014, the

four-firm concentration ratio - the extent of market control held by the four largest

firms, Aetna, Anthem Blue Cross Blue Shield, UnitedHealthcare and Cigna - for the

sale of private insurance increased from 74% to 83%.42 This results in monopolistic

health care prices that lead to unaffordable health care and poorer quality.43 There

is also growing vertical integration between insurers and health care providers;

UnitedHealthcare for instance now employs almost 50,000 physicians as of 2021,

and their reported share of medical expenses that flow to employed providers or

other related businesses increased nearly 250% between 2016 and 2019.44

Widespread consolidation across the health care system has been compounded by

the growing role of private equity (PE) firms over the last decade. Once largely uninvolved in the U.S. health care system, PE firms are increasingly purchasing and

reselling a variety of health care provider organizations in order to make short term

profit, largely to the detriment of the financial wellbeing of those providers and ultimately to health care access and affordability in a community. In 2020, health care
45

became the second largest sector for private equity investment, accounting for 18

percent of all reported deals, up from 12 percent in 2010.45 Private equity investors

spent more than $750 billion on health care acquisitions between 2010 and 2019.46

The business model of private equity firms is fundamentally misaligned with ensuring that our nation’s families have the high-quality, affordable, and equitable

health care they need and deserve. PE firms often apply a very short-term profit

driven business model (a three-to-seven- year period) to their investment strategy,

characterized by buying a health care entity that is struggling financially or offers

short-term growth potential, investing in it, saddling it with debt, and then selling

their stake to generate profit.47

Further, recent studies show that PE ownership was associated with a number

of harmful health care impacts, including but not limited to:

–Decreases in health care quality and patient safety: PE owned hospitals experience a 25% increase in hospital-acquired conditions, including a 27% increase

in patient falls and an almost 38% increase in infections.48 Researchers say that

these outcomes may be partially due to ′′decreased staffing, changes in operator

technique, poorer clinician experience,′′ among other potential causes;49

–Increases in health care prices and charge-to-cost ratios: PE owned hospitals

charge $400 more per inpatient day on average compared to non-PE owned hospitals;50 and

–Increased out-of-network costs due to PE firms buying up specialty physician

staffing firms.51

Without question, widespread and largely unchecked health industry consolidation has led to the deterioration of healthy competition across and within U.S.

health care markets and has had a significantly negative impact on the affordability

and quality of American health care.52 Importantly, most health care consolidation

has not resulted in reduced costs through economies of scale, improved care coordination or quality oversight as industry proponents have argued.53 In fact, the evidence overwhelming confirms that consolidation has produced exploitative markets

that drive high prices and costs without improving the quality of care.54

In many cases, consolidation is actually associated with reductions in health care

quality.55 For instance, one study found that mortality risk among heart attack patients is significantly higher in more concentrated hospital markets.56 On top of

that, consolidation often leads to reduced geographic access to needed providers,

which can contribute to longer travel times and serious health consequences, particularly for rural communities.57 For example, rural hospitals that merge with larger hospital systems are more likely to eliminate key service lines in primary care,

maternal and neonatal health, surgery, mental health, and substance use disorder

services post-merger, significantly reducing access to critical health care services

and threatening the health and wellbeing of rural communities.58 Moreover, increasing the distance to the nearest site of health care can result in people living in all

types of communities not getting the care they need due to a lack of transportation

or the time needed to get there, disproportionally affecting older Americans, racially

and ethnically marginalized groups, those with low incomes, and people with disabilities.59

A Closer Look at Hospital Consolidation

Nowhere is the negative impact of consolidation more evident than the rising cost

of hospital stays and services, which have increased dramatically in the last decade

and make up a large portion of increasing health care costs overall.60 These cost increases have occurred despite lower hospital utilization and are largely due to escalating prices, which are the result of hospitals buying other hospitals and community doctors to eliminate competition and form big health care corporations and

medical monopolies.61

Between 1990 and 2023, hospital prices increased 600%, and just since 2015, hospital prices have increased as much as 31% nationally, now accounting for nearly

one-third of U.S. health care spending, and growing more than four times faster

than workers’ paychecks.62 Importantly, hospital prices are not only high, but have

become essentially irrational:

–In 2020, across all hospital inpatient and outpatient services, employers and

private insurers paid on average 224% of what Medicare pays for the same services.63:

–Prices at hospitals in concentrated markets are 12% higher than those in

markets with four or more rivals without any demonstrated improvement in quality

or access to care.64
46

–Prices for the exact same service vary widely, sometimes even within a single hospital system:

–A colonoscopy at a single medical center in Mississippi can range from

$782 to $2,144 depending on insurance.65

–At one health system in Wisconsin, an MRI costs between $1,093 and

$4,029 depending on level of insurance.66

–Across the country, the average price for a knee replacement ranges

from $21,976 in Tucson, Arizona to $60,000 in Sacramento, California.67

–The price of an MRI at Mass General Hospital in Boston Massachusetts

ranged from $830 to $4,200, depending on the insurance carrier.68

Importantly, America’s health care workers are also suffering ill-effects of being

trapped in this greed-driven system. Following hospital mergers, wages for nurses

and skilled workers stagnate: Wage growth was found to be 1.7% below the average

national wage growth for these workers following horizontal mergers.69 Research on

high-impact mergers shows that over the four years post-merger, wages might be

6.8% lower for nurses and pharmacy workers and 4% lower for other skilled workers, in comparison to what wages could have been without the merger.70 This is

compounded in rural areas: Research from 2015 showed that after a merger some

rural hospitals decreased their spending on employee salaries by more than $1000

per full-time equivalent employee.71 Hospital consolidation has also been shown to

have negative impacts on staffing ratios. Following an acquisition in North Carolina

by HCA Healthcare in 2019, nurses in that system experienced nurse-to-patient

ratio changes and staffing cuts, in addition to closures of primary care offices and

cutbacks of other services.72 This left nurses and other health care workers caring

for more patients with less time and fewer resources, which the Federal Trade Commission (FTC) cautioned would lead to patient harm in the form of ′′higher health

care costs, lower quality, reduced innovation and reduced access to care.′′

73

Congress Should Root Out Corporate Greed and Fix our Broken System

It does not have to be this way. We know what the major drivers of high and irrational health care prices are, and we know how to fix them. This Committee has

previously examined potential abuses in health care and taken steps to conduct

oversight over the quality of care delivered in nursing homes and explore root

causes of high prescription drug prices. Since the late 1800’s Congress has leveraged

its power to break up harmful monopolies, rein in corporate abuses and drive improved transparency across a wide array of other industries and sectors, ranging

from big oil to big tobacco to big banks to big tech.74 Last year the Senate even examined how to promote healthy competition in entertainment and protect consumers from the monopolistic pricing practices exhibited by Ticketmaster.75 Now is

the time to turn full attention to the health care industry and ask the hard and

necessary questions about the impacts of medical monopolies on health care affordability that pose a direct threat to the health and wellbeing of every American.

The House of Representatives has already advanced well-vetted, bipartisan, and

commonsense legislation that would remedy some of the most obvious health system

failings. The Lower Costs, More Transparency Act, which passed the House in an

overwhelming bipartisan vote in December 2023, would make crucial progress by

codifying and strengthening price transparency rules, expanding site neutral payments, and advancing billing transparency, among other reforms. Several Members

of Congress have introduced other meaningful solutions, including Ranking Member

Braun’s legislation: S. 3548, the Health Care PRICE Transparency Act 2.0 and S.

1869, the Site-based Invoicing and Transparency Enhancement (SITE) Act. Some of

these provisions, in addition to other important policy solutions, are discussed in

further detail below.

Strengthen Price Transparency

Unveiling prices is a critical step towards achieving truly affordable health care,

improved health, and more competitive health care markets across the U.S. health

care system. Price transparency pulls back the curtain on prices so that policymakers, researchers, employers, and consumers can see how irrational health care

prices have become and take action to rein in pricing abuses.76 Further, unveiling

prices can specifically inform where the highest and most irrational prices are occurring in the health care system, so policymakers can implement targeted policy solutions to bring down the cost of health care.77 All Americans, and particularly older

Americans who heavily rely on the health care system, should be able to easily access the price of health care services at a hospital or health care facility before they

receive care.
47

Consumer advocates have long sought transparency in health care prices. Following years of consumer advocacy, the Center for Medicare and Medicaid Services

(CMS) finalized the Hospital Price Transparency Rule and the Transparency in Coverage Rule, which require hospitals and insurers respectively to disclose health pricing information, including their negotiated rates, and to provide consumer-friendly

online tools to allow consumers to compare prices and estimate out-of-pocket costs.78

But many large hospital corporations have bucked the federal requirements and are

actively working to keep their prices hidden.79

The Lower Costs, More Transparency Act makes clear, without any exception,

that all hospitals and insurers are required to post the underlying price of health

care services, in a machine readable and consumer-friendly format. The Health Care

PRICE Transparency Act 2.0 would advance transparency by taking bold steps to:80

–Impose data sharing standards.

–Require machine-readable files of all negotiated rates and cash prices between plans and providers, not estimates.

–Expand price transparency quirements to clinical diagnostic labs, imaging

centers, and ambulatory surgical centers.

–Require pricing data standards including all billing codes for services.

–Require actual prices for 300 shoppable services with all services by 2025.

–Require attestation by executives that all ices are accurate and complete.

–Increase maximum annual penalties to $10,000,000 (includes specific minimum and maximum penalties according to number of hospital beds in the facility).

–Prevent pre-emption of state price transparency laws, except for ERISA

group health plans.

–Codify the Transparency in Coverage (TIC) rule.

–Provide group health plans the right to access, audit, and review claims encounter data.

The American public is in broad agreement about the need for action on price

transparency, with polling showing that a large majority (95%) of the public say it

is important for Congress to pass a law to make health care costs more transparent

to patients, including 60% who call this a top priority.81

Enact Site Neutral Payment and Billing Transparency

Market inefficiencies that stem from site-specific payment rates in Medicare are

a significant problem which, if addressed, could save American families and health

care payers billions of dollars.82 Since commercial insurance and Medicaid often

adopt Medicare payment policies, the broken payment incentives in Medicare are

amplified across payers. These site-of-service payment differentials drive care delivery from physician offices to higher-cost hospital outpatient departments.83 This

shift is a major driver of higher spending on health care services which require

lower resources such as office visits and minor procedures.84 Importantly, these payment differentials create a financial incentive for hospitals to consolidate by buying

physician offices and rebranding them as off-campus outpatient hospital departments (HOPDs) and facilities in order to receive higher payments.85 This type of

consolidation - vertical integration between hospitals and physicians - leads to a

growingly anticompetitive market where hospitals increase market power to demand

even higher prices from commercial payers.86 These higher commercial prices are

then passed on to American families and come directly out of workers’ paychecks,

typically as monthly health insurance premiums.87

Currently, hospitals that own doctors’ offices that have been rebranded as off-campus HOPDs are allowed to charge a ′′facility fee′′ in addition to the higher fees they

bill for the physician services they provide.88 The result is that consumers not only

receive a bill for the visit with the physician but also for the use of the hospital

facility where the visit occurred.89 These bills together (the physician fee and the

facility fee) amount to a higher total cost for the consumer than if the service was

provided in the physician’s office.90

We are encouraged that Members of Congress are working to address payment

differentials across sites of service that incentivize further consolidation and are a

major driver of unaffordable care for America’s families. The Lower Costs, More

Transparency Act takes important steps toward fostering healthier competition in

health care markets by advancing billing transparency reforms and expanding site

neutral payments for drug administration services to help ensure consumers pay the

same price for the same service regardless of where that service is performed. It

would enact billing transparency reforms so that off-campus hospital outpatient departments are required to use a separate identifier when billing to Medicare or commercial insurers to ensure large hospital systems do not overcharge for the care
48

they deliver in outpatient settings. It would also enact site neutral payments for

physician-administered drugs in outpatient settings, which is estimated to save the

highest-need chemotherapy patients more than $1,000 on cost sharing a year.91 The

Congressional Budget Office (CBO) estimates that site neutral payments for physician-administered drugs and billing transparency reforms would generate $3.74 billion and $403 million in savings, respectively, over ten years.92 These policies are

welcome first steps to addressing misaligned payment incentives that lead to higher

costs for patients without meaningfully improving quality.

Bipartisan legislation introduced by Ranking Member Braun, S. 1869 Site-based

Invoicing and Transparency Enhancement (SITE) Act, would go even further to expand site neutral payments for outpatient services, end exemptions in Medicare billing rules that keep many facilities from having to charge the same price for the

same service, and require that health systems establish and bill using a unique National Provider Identifier number for each and every off-campus outpatient department.93 The bill is projected to save the government as much as $40 billion based

on previous CBO estimates.94

Ultimately, Congress could make significant strides in addressing medical monopolies by implementing comprehensive site-neutral payment policies as recommended

by MedPAC in 2023, and eliminating site-dependent reimbursement distortions that

indirectly incentivize acquisition of non-hospital patient access points.95 CBO estimates that this policy could save Medicare approximately $140 billion over the next

decade.96 And the Committee for a Responsible Federal Budget projects that these

policies could reduce health care spending by $153 billion over the next decade, including lowering premiums and cost-sharing for Medicare beneficiaries by $94 billion and for those in the commercial market by $140-466 billion.97

Ban Anticompetitive Contracting Practices

We also urge Congress to take a close look at anticompetitive practices and

clauses in health care contracting agreements between providers and insurers that

give large entities in highly consolidated markets the upper hand in contract negotiations to build networks and set prices. Many of these contracts include terms that

limit patient access to alternative sources of higher-quality, lower-cost care. Congress made important progress by banning gag clauses in executed contracts between insurance plan issuers and providers or provider networks as part of the Consolidated Appropriations Act of 2021. This policy has the potential to enable consumers and employers to be more informed purchasers of health care and to unveil

fundamental information that policymakers, employers, researchers and other

stakeholders need to identify health care markets with the highest prices and build

policy that encourages healthier competition.

Congress should further prohibit large hospital systems from using their monopoly power to employ anti-competitive contracting practices when negotiating with insurers and other health care providers, as this is one of the primary ways medical

monopolies are able to charge high and rising prices.98 These prohibitions should include the use of ′′all-or-nothing,′′ ′′anti-steering,′′ and ′′anti-tiering′′ clauses in contracts between health care providers and insurers. ′′Anti-tiering′′ and ′′anti-steering′′

clauses restrict the plan from directing or incentivizing patients to use other providers and facilities with higher quality and lower prices; and ′′all-or-nothing′′

clauses require health insurance plans to contract with all providers in a particular

system or none of them. ese contracting terms too often limit consumers from accessing higher-quality and lower-cost care.99

Bipartisan legislation led by Senate HELP Committee Chairman Sanders, S.2840,

the Bipartisan Primary Care and Health Workforce Act,100 includes provisions to

ban anticompetitive terms in facility and insurance contracts, estimated by CBO to

increase revenues by $3.2 billion over a 10-year window.101

Ensure Transparency in Ownership

Additionally, we urge the Committee to continue to explore opportunities to improve transparency around the ownership interest of health care corporations, particularly when it comes to private equity. We support legislative provisions considered by committees of jurisdiction in the U.S. House of Representatives that would

require providers to annually report changes in ownership, and hope that Congress

will consider integrating these or similar provisions back in to any final health care

transparency legislation that is sent to the President’s desk. Without insight into

how profits from health systems are ultimately being funneled it is very difficult to

identify potential abuses, leaving private equity firms free to purchase health systems in order to drive profits through upcoding, surprise billing, and other questionable business practices.
49

Strengthen FTC Oversight Authority

Policymakers should prevent future horizontal, vertical, and cross-market mergers

that undermine healthy competition in health care markets and drive unaffordable

care by ensuring the Federal Trade Commission (FTC) and the U.S. Department of

Justice (DOJ) are fully applying federal antitrust laws to horizontal integration,

such as mergers between hospitals and other health systems, pharmacy benefit

managers and drug companies; and vertical integration, such as mergers between

physician practices and hospitals, health plans and pharmacy benefit managers.

Specifically, Congress should improve the infrastructure needed to monitor anticompetitive mergers and contracting practices among health care corporations by increasing FTC and DOJ funding for anti-trust enforcement, and by giving the FTC

authority to investigate and rein in anti-competitive practices by non-profit health

care entities, including non-profit hospitals. Special attention should be given to PE

firms and the smaller transactions that may traditionally fall below existing thresholds of review. Congress should increase the number of health care transactions reported to FTC and DOJ and subject to anti-trust review and enforcement by reducing the Hart-Scott-Rodino Act reporting threshold.102

Congress has the Power to Fix our Broken System - And Families Can’t Afford to Wait

Over the last year there has been growing bipartisan momentum in Congress to

advance policies that improve health care system transparency, end pricing abuses,

and deliver on promises to make health care more affordable. Congress has a clear

and immediate opportunity to put the needs of families ahead of the demands of

corporate greed, and people all across the country are desperately awaiting action.

Consider the story of Ben Los from Colorado, whose encounter with our health

care system’s lack of transparency came at the most vulnerable time for his young

family:

In September of 2022, Ben Los’s 5-year-old son began experiencing seizures.

After rushing him to the doctor, Ben and his wife were referred to a specialist within

their insurance network, an hour and a half away from their Colorado Springs

home. They got the EEG scan for their son and were in and out of the specialist’s

office in 45 minutes where they were assured, ′′yes, absolutely this is covered.′′ t two

months later, the Los family received a bill for $2,518 for the appointment. After calling the hospital to find out why they were being charged for something they had confirmed multiple times was covered, the hospital claimed this was for ′′facility fees.′′

The appointment itself was covered, but now the hospital was defending the charge

stating, ′′Well, you paid the clinic staff, but now you also have to pay the hospital.′′

After extensive efforts, Ben was able to speak to somebody near the top of the

hospital’s administration, who negotiated the bill down to a 75% reduction under a

classification of charity care. During this time Ben engaged with an investigative

journalist in Denver and found out the hospital is owned by one company, which is

owned by another company, and so on. When they finally identified the overarching

owners of the health system, they discovered those owners profited billions of dollars

in the first nine months of 2022 alone. ′′You can’t tell me that there is no way for

the hospitals to pay their employees when they’re raking in the kinds of net profits

that they’re claiming every single year,′′ said Ben.103

Patients experience egregious price hikes for the very same services they’ve previously received in the very same outpatient settings. For instance, Kyunghee Lee,

a then 72-year-old retiree who lives in Mentor, Ohio:

Kyunghee Lee has arthritis and once a year she would go to a rheumatologist

for a steroid injection in her hand to relieve pain in her knuckles. For a few years,

each round of injections st her $30. In 2021, she arrived at her usual office and the

rheumatologist she regularly saw had moved to a new floor of the building - just one

floor up. She didn’t think anything of it, as the rest of the appointment went as

usual, until she received a bill for $1,394. The infusion clinic that Lee went to had

been moved from an office-based practice to a hospital-based setting, and as a result

the price of the same service she had been relying upon increased a staggering

4,546%. Lee’s bill had a $1,262 facility fee attached, making up the majority of the

increase in cost, even though she saw the same doctor and received the same treatment as the years prior. Lee and her family didn’t know what they would do about

the shot in the following year when the story was reported.104
50

In some cases, patients receive bills for facility fees when they never even set foot

inside a medical facility of any kind. Take the story of Brittany Tesso and her then

3-year-old son Roman from Aurora, Colorado:

In 2021, Roman’s pediatrician referred him to Children’s Hospital Colorado to

receive an evaluation for speech therapy. With in-person visits on hold due to the

COVID-19 pandemic, the Tessos met with a panel of specialists via videoconference.

The specialists, who appeared to be calling from their homes, observed Roman speaking, playing, and eating. Later, Mrs. Tesso received a $700 bill for the one-hour video

appointment. Then, she received another bill for nearly $1000. Thinking it was a

mistake, Mrs. Tesso called to question the second bill. Despite the fact that the Tessos

never set foot inside the hospital, she was told the bill was a ′′facility fee′′ designed

to cover the costs of being seen in a hospital-based setting.105

In addition to jeopardizing financial security for individual patients and their families, widespread health system consolidation risks the health and economic security

of entire communities:106

Hahnemann University Hospital opened in Philadelphia, Pennsylvania in

1885. For more than 130 years, it served primarily lower income residents, until

2018 when it was purchased by Paladin Healthcare, a private equity firm. Over the

course of about 18 months, Paladin Healthcare laid off physicians, nurses, and other

workers, while steering the hospital towards bankruptcy and closure.107 Questions

and concerns were raised by local, state, and national officials as to whether the motivation for these decisions came from the value of the land on which the hospital

sat being seen as more valuable to the private equity firm than the nearly 500-bed

charity hospital itself.108 Despite the local community’s longstanding reliance on this

centrally located hospital, Hahnemann University Hospital closed its doors in August

2019. Shortly thereafter, the land was put up for sale. addition to residents losing

access to care, thousands of employees lost their jobs and 550 medical residents were

displaced.109

A broad range of stakeholders have endorsed and supported critical policy solutions to address consolidation and improve transparency, including organizations

representing consumers, patients, workers, small and large employers, and primary

care clinicians.110 Large majorities of voters support a range of policies to lower

prices. Voters from both sides of the aisle broadly support:111

–Requiring hospitals to provide real prices in advance, not estimates (93%)

–Limiting outpatient fees to the same price charged by doctors in the community (85%)

–Preventing hospitals from engaging in business tactics that reduce competition (75%)

–Limiting mergers and acquisitions (74%)

Beyond these immediate steps, policymakers should focus on a broader redesign

of the economic incentives of the health care sector to align with consumers and

families. Ultimately, policy solutions should reorient health care payment and delivery to the goal that we all have - improved health for ourselves and our families

that is affordable and economically sustainable.

Thank you again for holding this hearing today and for your leadership in addressing the challenges posed to older Americans and their families by our health

care system’s lack of transparency and affordability. Congress should seize this momentum to immediately implement commonsense policies that rein in abusive

health care prices and make health care more affordable for everyone: patients,

workers, and taxpayers alike. The journey to fully transform our health care system

is long, but Congress holds the power to take the next critical steps. Families USA

stands ready to support you in this essential and urgently needed work.
51

FOOTNOTE REFERENCES
52
53
54
55
56
57
58
59

Questions for the Record

63

1 Centers for Medicare & Medicaid Services (CMS). Enforcement Actions . www.cms.gov. Published September 10, 2024. www.cms.gov/priorities/key-initiatives/hospital-price-transparency/

enforcement-actions

2 Robinson JC, Brown TT, Whaley C. Reference Pricing Changes The Choice Architecture Of

Health Care For Consumers. Health Affairs. 2017;36(3):524-530. doi:doi.org/10.1377/

hlthaff.2016.1256

3Murray RC, Brown ZY, Miller S, Norton EC, Ryan AM. Hospital Facility Prices Declined As

A Result Of Oregon s Hospital Payment Cap. Health Affairs. 2024;43(3):424-432. doi:https://

doi.org/10.1377/hlthaff.2023.01021

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

QUESTIONS FOR THE RECORD

Dr. Chris Whaley

Senator Kirsten Gillibrand 

Question:

A recent report showed that less than 36 percent of hospitals were fully compliant

with transparency requirements issued by the Centers for Medicare and Medicaid

Services Hospital Price Transparency Rule. Dr. Whaley, what should the Federal

government do to increase and enforce compliance?

Response:

Starting in 2021, hospitals have been required to post negotiated rates for 300

shoppable services. However, compliance with this policy has been low, in part due

to lax enforcement. To date, fewer than 20 hospitals have been penalized for not

posting prices.1 To further increase compliance, an immediate step for CMS is to

fully enforce penalties for non-compliance. Ensuring compliance through complete

enforcement will provide a greater degree of transparency and accountability around

U.S. healthcare prices.

Question:

How would increased transparency in healthcare pricing specifically benefit small

employers who struggle the most to access their data? What impact could this have

on their ability to provide competitive benefits?

Response:

Health care costs come directly from worker paychecks and other benefits, employers who provide health benefits to their workforce have a legal and moral fiduciary obligation to be responsible fiduciaries and purchasers. It is not possible to fulfill this fiduciary obligation without insight into prices and contracts negotiated on

behalf of employers and purchasers. Access to both medical claims data and contract

information is the clearest way for employers and purchasers to ensure prices align

with received value.

With access to their data, employers and purchasers have innovated, including:

– The California Public Employees Retirement System (CalPERS), which uses

targeted financial incentives to steer patients to lower-priced, high-quality providers. For a range of shoppable services, my work shows that this program reduces

spending by approximately 20% and leads to quality improvements.2

– The of Oregon public employees and school teacher s plan, which limits hospital prices to 200 percent of Medicare. By limiting hospital prices, this program reduced annual spending by approximately four percent for the plan.3

Question:

The average drug price increase between January 2022 and 2023 was 15.2 percent. The Capping Prescription Costs Act of 2024 would cap individual cost-sharing

for prescription drugs to help those with limited incomes and high costs. Dr.

Whaley, which sector of the health care market has benefitted the most from higher

drug prices? Which sector has suffered the most? Which sector would a patient outof-pocket cap affect?

Response:

Many studies show high patient out-of-pocket costs for prescription drugs reduce

adherence to medication management. Particularly for chronic conditions, reduc-
64

4 Congressional Budget Office (CBO). Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services.; 2012. www.cbo.gov/sites/default/files/cbofiles/attachments/

43741-MedicalOffsets-11-29-12.pdf

5Goldman DP, Joyce GF, Zheng Y. Prescription Drug Cost Sharing: Associations With Medication and Medical Utilization and Spending and Health. JAMA. 07;298(1):61 69. doi:10.1001/

jama.298.1.61

tions in medication management due to cost leads to increases in hospitalizations,

emergency department visits, and overall healthcare spending.4 5 Thus, policies, including limits on out-of-pocket costs for chronic condition medications, that limit patient financial burden for medication management can improve health and reduce

spending. These policies are particularly important for lower-income Americans and

those with multiple chronic conditions. However, a key challenge with these programs that limit patient out-of-pocket burden is that they are borne by a patient

s pharmacy benefit, while savings due to improved health accrue to a patient s medical insurer. Aligning incentives between prescription drug and medical insurance

coverage could spur programs that reduce patient financial burden for chronic condition medications.
65

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

QUESTIONS FOR THE RECORD

Cora Opsahl

Ranking Member Mike Braun 

Question:

As detailed in the Wall Street Journal, the 32BJ Health Fund’s decision to remove

a large hospital system, New York-Presbyterian, from its network in 2022 and the

subsequent payment demands made by New York-Presbyterian are emblematic of

the outsized market influence of hospitals. As you state in your testimony, these

contracting practices ultimately impact not just cost, but transparency and the

member experience. Can you describe how the events reported by the Wall Street

Journal influenced the health fund’s ability to select a benefit administrator, and

any other consequences that resulted?

Response:

New York-Presbyterian’s demands as described in the Wall Street Journal article

limited the 32BJ Health Fund’s ability to select a third part administrator (TPA)

vendor during a standard procurement process. This is the latest example of New

York-Presbyterian’s anti-competitive practices, which the 32BJ Health Fund has

been challenging for years.

As our testimony references, in 2018, we sought to tier our network after our

claims data showed certain hospitals, including New York-Presbyterian, charged significantly more for some services without relation to quality. The Health Fund’s

TPA at the time indicated their contract with New York-Presbyterian prohibited the

tiered arrangement. After a public campaign, New YorkPresbyterian agreed to be

placed in a non-preferred tier with a significant copay differential.

In 2021 New York-Presbyterian informed the 32BJ Health Fund’s TPA that the

TPA would have to reduce its non-preferred co-pay structure. Targeted programs accessible through hospitals selected on the basis of competitive bidding and superior

quality performance, including our Maternity Program could not be continued in

their current design. In 2022, the 32BJ Health Fund was able to remove New YorkPresbyterian from its network after their refusal to negotiate directly with the

Health Fund to provide participants with high-quality care at affordable prices and

another public campaign.

In 2023, the 32BJ Health Fund embarked on a standard procurement process to

select a TPA vendor that could administer the 32BJ Health Fund’s hospital and

medical benefits.

In April 2024, after months of deliberation, the 32BJ Health Fund Trustees terminated final contract negotiations with its newly selected TPA vendor after the vendor reported they could no longer maintain New York-Presbyterian as an out-of-network facility unless the 32BJ Health Fund complied with New YorkPresbyterian’s

demand for additional payments amounting to tens of millions of dollars that New

York-Presbyterian claimed it was owed for out-of-network emergency services provided to 32BJ Health Fund participants in 2023. No documentation or list of claims

was provided at that time with this demand, and the 32BJ Health Fund’s review

of its records determined that the payment demand was without merit, and no additional payment was made.

Instead of using the arbitration processes that the federal law provides through

the No Surprises Act to resolve this type of payment disputes, New

YorkPresbyterian attempted to make this additional payment part of the contract

negotiations between the TPA vendor and the 32BJ Health Fund.

After this demand by New York-Presbyterian, the 32BJ Health Fund terminated

its contract negotiations with that TPA vendor. This left the 32BJ Health Fund no

choice other than selecting the only TPA vendor with an existing agreement with

New York-Presbyterian to be out-of-network for the 32BJ Health Fund. The Health

Fund has been told that New York-Presbyterian intends to remove this provision

in the agreement when its contract with the newly selected TPA vendor is up for

renewal in 2025.
66

1 Rochman, Harvey. (November 29, 2023). The Gag Clause Prohibition Compliance Deadline

Is Approaching: What Plans and Issuers Need to Know. https://www.manatt.com/insights/newsletters/health-highlights/the-gag- clause-prohibition-compliancedeadline-is

Question:

You mention in your testimony that hospitals use their market power to make

contract demands that impact the ultimate terms agreed upon between your thirdparty administrator of the medical and hospital benefits provided by your health

fund. Based on the news reported by the Wall Street Journal, is this essentially

what happened with New YorkPresbyterian? Can you share more about the impact

of this on the Fund?

Response:

Yes, the demands made by New York-Presbyterian impacted the 32BJ Health

Fund’s ability to select a vendor during our 2023 medical and hospital benefit third

party administrator (TPA) procurement. New York-Presbyterian demanded additional payments they claimed they were owed for out-of-network emergency services

provided to 32BJ Health Fund participants in 2023 with no documentation or list

of claims provided at that time. In April 2024, the 32BJ Health Fund’s newly selected TPA vendor reported they could no longer maintain New York-Presbyterian

as an out-of-network facility unless the 32BJ Health Fund complied with this additional payment demand by New York-Presbyterian. This left the 32BJ Health Fund

no choice other than selecting the only TPA vendor with an existing agreement with

New York-Presbyterian to be out-of-network for the 32BJ Health Fund.

Question:

What further policy recommendations do you have beyond transparency proposals?

Response:

Prohibiting anti-competitive contracting practices in hospital provider contracts is

an important step to realign healthcare system incentives to enable employer-sponsored health plans like 32BJ Health Fund to better steward their resources for the

benefit of plan participants.

The 32BJ Health Fund recommends Congress expand on recent legislation that

bans certain anti-competitive contracting clauses in hospital provider contracts. In

the Consolidated Appropriations Act (CAA) of 2021, Congress enacted a prohibition

of gag-clauses that restrict certain information sharing with health plans and health

insurance issuers.1 While the CAA enactment of the gag-clause prohibition was a

positive step forward, more action is needed to regulate other common anti-competitive contracting practices.

State legislatures have also made attempts to ban or regulate anti-competitive

contracting practices but have encountered resistance from the hospital lobbies

when proposals are filed. The Hospital Equity and Affordability Legislation

(′′HEAL′′) Act, which passed in New York State in 2022, bans health plan and provider contract provisions that restrict the disclosure of provider claims cost, price,

or quality information. However, other anti-competitive contracting practices -- ′′allor-nothing′′ and ′′anti-tiering′′ clauses -- were removed from the final version of the

HEAL Act following opposition by the Greater New York Hospital Association.

Congress should pursue enacting Federal regulations to prohibit ′′most favored

nation, ′′anti-tiering/anti-steering,′′ and ′′all-or-nothing′′ clauses in provider and insurer contracts. Given the opposition experienced in State legislatures, further action is needed by Congress to protect employers and self-funded plans from these

anti-competitive contracting practices by providers and carriers that impact the ability to steward health plan resources effectively. We strongly encourage Congress to

continue advancing proposals that ban anti-competitive contracting practices.

Question:

What actions can we take to decrease health costs?

Response:

There is no silver bullet for decreasing health care costs, but rather targeted policies that can help to lower healthcare costs. One policy in particular that would provide constructive relief for employer-sponsored health is enacting site neutral payment policies.

Under current Medicare fee schedules, reimbursement is typically higher for routine procedures provided at a hospital outpatient department versus a freestanding

doctors’ office. Site-neutral payment policies seek to eliminate downstream incentives for hospital acquisition and mergers by instituting price regulation on routine

services that are safe to be delivered at a freestanding doctor’s office.
67

2Key Takeaways from the Site-based Invoicing and Transparency Enhancement (SITE) Act2023-06-13 (crfb.org)

3Lower Costs, More Transparency Act (2023). House Committee on Energy and Commerce.

https://energycommerce.house.gov/LCMT

4Sullivan, P. (March 5, 2024). Hospitals and PBMs seem to have dodged big federal reforms,

for now. Axios Health. https://www.axios.com/2024/03/05/hospitals-pbms-dodge-reforms-congress

5 Equalizing Medicare Payments Regardless of Site-of-Care (February 21, 2021). Committee

for a Responsible Federal Budget. https://www.crfb.org/papers/equalizing-medicare-payments-regardless-site-care

6 Uttley, L., Hyde, F., HasBrouck, P. and Chessen, E. (May 2018). Empowering New York Consumers in an Era of Hospital Consolidation

7Gagne, M. (March 4, 2024). Will patient care, costs in CT improve with Nuvance-Northwell

merger? ‘Cautiously optimistic.’ Newstimes. https://www.newstimes.com/news/article/danburynorwalk-hospital- nuvance-northwell-merger18695997.php.

8 Audited Financial Statements for FY 2022, as posted on Electronic Municipal Market Access

(https://emma.msrb.org/)

There are multiple site-neutral proposals before Congress today. Introduced in the

U.S. Senate in June 2023, the Site-based Invoicing and Transparency Enhancement

Act (the SITE Act), proposes updating Medicare reimbursement at off-campus hospital outpatient departments to follow site-neutral requirements these facilities were

previously exempted from in the 2015 Bipartisan Budget Act.2 Also in the current

session, in December 2023, the U.S. House of Representatives passed the Lower

Costs, More Transparency Act, which would ensure Medicare pays the same prices

for physician-administered drugs in different settings.3 However, in March 2024, the

bipartisan legislation stalled in Congress.4

There are potential savings across commercial payers if site-neutral payments

were enacted beyond Medicare fee schedules. The Committee for a Responsible Federal Budget estimates commercial payors could save between $140 and $466 billion

in the next 10 years if a site-neutral payment policy were implemented nationwide.5

We strongly encourage Congress to continue advancing proposals that enact

siteneutral payment policies for Medicare and commercial insurers and self-funded

plans.

Question:

What impacts have you experienced because of health care consolidation?

Response:

As the hospital markets where 32BJ Health Fund participants’ care is provided

are becoming increasingly consolidated, participants are experiencing shifts in

where their routine care is provided.

New York State and City, where a majority of 32BJ Health Fund participants’

healthcare is provided, has experienced hospital market consolidation. One 2018

study reviewing hospital consolidations in New York State found the 12 largest systems now control half of all the acute care hospitals in New York and 70 percent

of the inpatient acute care beds.6 New York hospitals continue to pursue consolidation. In February 2024, Northwell Health announced a proposal to acquire the

Nuvance Health system, which operates seven hospitals in Connecticut and New

York State. The proposed merger would expand the Northwell System to include 28

total hospitals valued at $20 billion.7

While large hospital systems are merging in New York, their net financial assets

are also growing. From 2016-2022, collectively, six academic medical centers in the

New York City region (New York-Presbyterian, Northwell Health, New York University Langone, Mount Sinai Hospital, Catholic Health Services of Long Island,

and Montefiore Health System) increased its total net assets from $16 billion to $24

billion. New York-Presbyterian recorded the highest total net assets among these

hospitals in 2022 at nearly $11 billion.8

At the same time net financial assets increased for large hospital systems in the

New York City region, the site of care for some routine procedures also shifted for

32BJ Health Fund participants. The 32BJ Health Fund reviewed its claims to examine changes in billing from office settings to hospital outpatient departments. The

analysis showed a shift over time in the site of care for many routine procedures

like allergy shots, acupuncture, and glaucoma screenings from doctors’ offices to hospital outpatient departments. In 2016, 29% of nonemergency CT scans for 32BJ

Health Fund participants in New York were conducted in hospital outpatient departments, meaning 71% took place in doctors’ offices. By 2022, the number of these

CT scans conducted in hospital outpatient departments rose by 12 percentage

points, and the number in doctors’ offices decreased by the same amount.
68

Without further regulatory action from Congress to reduce incentives for hospital

consolidation, 32BJ Health Fund participants may continue to experience changes

in their location for routine care and navigate concentrated hospital markets.

Senator Kirsten Gillibrand 

Medicare for All Act 

The current medical system is complicated and is not patient friendly. The Medicare for All Act would simplify this process and ensure every American has access

to quality, affordable health care regardless of income.

Question:

Ms. Opsahl, would Medicare as a uniform health care insurance plan simplify the

health care process for union members and their families?

Response:

The 32BJ Health Fund strives to simplify access to and maintain affordable

healthcare for our plan participants. We also value efforts to do the same for all

working Americans. Containing hospital prices is a critical prerequisite for success

in any global healthcare delivery, access and cost reform effort. Policies to maintain

affordable healthcare for both the payer or purchaser and the patient, like regulating inflated hospital prices, is a foundational step to achieving broader healthcare

reform.

Capping Prescription Costs Act of 2024 

The average drug price increase between January 2022 and 2023 was 15.2 percent. The Capping Prescription Costs Act of 2024 would cap individual cost-sharing

for prescription drugs to help those with limited incomes and high costs.

Question:

Ms. Opsahl, how much of the overall Health Fund costs do prescriptions contribute to the 32BJ Health Fund?

Response:

In 2023, the 32BJ Health Fund spent $1.4B in total on medical and pharmacy

benefits. Of the $1.4B the 32BJ Health Fund spent in 2023 on medical and pharmacy benefits, 18% ($262M) was spent on pharmacy benefit costs.

Question:

How would a cap on out-of-pocket costs affect the union members’and their family’s health care costs?

Response:

Price caps, and other drug pricing mechanisms, are but one way for the 32BJ

Health Fund to manage prescription costs. The 32BJ Health Fund is responsible for

creating and implementing a cost-effective plan design that offers plan participants

accessible and affordable prescription drug benefits. We contract with vendors, such

as pharmacy benefit managers (PBMs) to provide benefits to plan participants.

Maintaining affordable prescription drug benefits for our participants is a guiding

principle in our vendor partnerships. In 2021, the 32BJ Health Fund transitioned

our PBM vendor to OptumRx with the CoreTrust Group Purchasing Coalition. After

the first year of this change, the 32BJ Health Fund saved 15% on prescription drug

cost spend and 10% in the second year. The 32BJ Health Fund will continue to

prioritize access and affordability in the prescription drug benefits provided to our

participants.
69

1 Robert A. Berenson et al., Addressing Health Care Market Consolidation and High Prices,

The Urban Institute https://www.urban.org/sites/default/files/publication/101508/addressing—

health—care—market—consolidation—and—high—price s—1.pdf. See also, Naomi N. Levey,

′′100 Million People in America are Saddled with Health Care Debt,′′ Kaiser Health News, June

16, 2022, Health https://khn.org/news/article/diagnosis-debt-investigation-100-million-americanshidden-medical-debt/

2 Health Care Cost Institute, 2020 Health Care Cost and Utilization Report, May 2022. https://

healthcostinstitute.org/images//pdfs/HCCI—2020—Health—Care—Cost—and—Utilization—Report.pdf; The Impact of Hospital Consolidation on Medical Costs. NCCI Insights. 2018. https://

www.ncci.com/Articles/Pages/II—Insights—QEB—Impact-of-Hospital-Consolidation-on-MedicalCosts.aspx

3Sophia Tripoli, Frederick Isasi, and Eliot Fishman, Bleeding Americans Dry: The Role of Big

Hospital Corporations in Driving Our Nation’s Health Care Affordability and Quality Crisis

(Washington, DC: Families USA, September 2022), https://familiesusa.org/wp-content/uploads/

2022/09/People-First-Care—Role-of-Hospitals.pdf.

4Katherine Keisler-Starkey and Lisa N. Bunch. ′′Health Insurance Coverage in the United

States: 2020.′′ United States Census Bureau. September 2021. https://www.census.gov/library/

publications/2021/demo/p60-274.html. See also, Sarah Kliff and Josh Katz. ′′Hospitals and Insurers Didn’t Want You to See These Prices. Here’s Why.′′ The Upshot: The New York Times. August 21, 2021. https://www.nytimes.com/interactive/2021/08/22/upshot/hospital-prices.html

5 Jaime S. King. ′′Examining State Efforts to Improve Transparency in Healthcare Costs for

Consumers: Testimony before the House Committee on Energy and Commerce and Subcommittee on Oversight and Investigations.′′ U.S. House of Representatives. July 17, 2018.

https://docs.house.gov/meetings/IF/IF02/20180717/108550/HHRG-115-IF02-Wstate-KingJ20180717.pdf

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

QUESTIONS FOR THE RECORD

Sophia Tripoli

Senator Kirsten Gillibrand 

Compliance 

A recent report showed that less than 36 percent of hospitals were fully compliant

with transparency requirements issued by the Centers for Medicare and Medicaid

Services Hospital Price Transparency Rule.

Question:

Ms. Tripoli, how would patients benefit from hospitals posting price transparency

data in a standardized format?

Response:

The United States is in the midst of a severe health care affordability and quality

crisis, stemming from high, rising, and variable prices across a wide range of health

care goods and services, particularly for hospital care.1 Large health care corporations have destroyed competition in the health care sector, and hospitals are dramatically increasing their prices year after year without any oversight from policymakers.2 This practice has become a central strategy in the business model of

health care corporations: generate profit by buying up other hospitals and doctors’

offices to become large corporate health care systems that can increase health care

prices, and then block policymakers and the public from seeing those prices, while

maximizing service volumes of the highest-priced services.3 The ability of hospitals

to increase prices year over year is the direct result of their ability to keep the underlying price of health care service hidden from public oversight and scrutiny.

Health care is one of the only markets in the U.S. economy in which consumers

are blinded to the price of a service until they receive a bill after the services are

delivered. For the majority of Americans (66%) who receive health care through private insurance, health care prices are established in closed-door negotiations between large hospital corporations and health plans based on who has more market

power.4 These health care prices, often referred to as the negotiated rate, are buried

in proprietary contracts without insight into or oversight over the price of health

care services by the public and policymakers.5

It is critical that we achieve meaningful price transparency to infuse healthy competition back into the health care system and not allow large hospital corporations

to secretly set their prices to price gouging levels at the expense of the health and
70

6 Robert A. Berenson, Jaime S. King, and Katherine L. Gudiksen, et al., ′′Addressing Health

Care Market Consolidation and High Prices,′′ The Urban Institute, January 2020, https://

www.urban.org/sites/default/files/publication/101508/addressing—health—care—market—consolidation—and—h igh—prices—1.pdf.; See also, Jaime S. King, ′′Examining State Efforts to Improve Transparency in Healthcare Costs for Consumers: Testimony before the House Committee

on Energy and Commerce and Subcommittee on Oversight and Investigations,′′ U.S. House of

Representatives, July 17, 2018, https://docs.house.gov/meetings/IF/IF02/20180717/108550/HHRG115-IF02-Wstate-KingJ-20180717.pdf

7Phillip Longman and Harris Meyer, ′′Why Hospitals Keep Their Prices Secret,′′ Washington

Monthly, July 6, 2020, https://washingtonmonthly.com/2020/07/06/why-hospitals-keep-theirprices-secret/

8 ′′Transparency in Coverage Final Rule Fact Sheet (CMS-9915-F),′′ Centers for Medicare &

Medicaid Services, October 29, 2020, https://www.cms.gov/newsroom/fact-sheets/transparencycoverage-final-rule-fact-sheet-cms-9915-f.

9PatientsRightsAdvocate.org, ′′The Fifth Semi-Annual Hospital Price Transparency Compliance Report,′′ PatientsRightsAdvocate.org, July 2023, https://www.patientrightsadvocate.org/julysemi-annual-compliance-report-2023; See also, PatientsRightsAdvocate.org, ′′The Fourth SemiAnnual Hospital Price Transparency Compliance Report,′′ PatientsRightsAdvocate.org, February

2023, https://www.patientrightsadvocate.org/february-semi-annualcompliance-report-2023; See

also, Justin Lo, Gary Claxton, Emma Wagner, et al., ′′Ongoing Challenges With Hospital Price

Transparency,′′ Peterson-KFF Health System Tracker, February 10, 2023, https://

www.healthsystemtracker.org/brief/ongoing-challenges-with-hospital-price-transparency/.

10Shannon Schumacher, Kunna Lopes, and Grace Sparks, et al., ′′KFF Health Tracking Poll

December 2022: The Public’s Health Care Priorities For The New Congress,′′ KFF, December

20, 2022, https://www.kff.org/mental-health/poll-finding/kff-health-tracking-poll-december-2022/

financial security of our nation’s families. Price transparency pulls back the curtain

on prices so that policymakers, researchers, employers, and consumers can see how

irrational health care prices have become and take action to rein in pricing abuses.6

Further, unveiling prices can inform where the highest and most irrational prices

are occurring in the health care system, so policymakers can implement targeted

policy solutions to bring down the cost of health care.7 All Americans, and particularly older Americans who heavily rely on the health care system, should be able

to easily access the price of health care services at a hospital or health care facility

before they receive care.

Consumer advocates have long sought transparency in health care prices. Following years of consumer advocacy, the Center for Medicare and Medicaid Services

(CMS) finalized the Hospital Price Transparency Rule and the Transparency in Coverage Rule, which require hospitals and insurers respectively to disclose health pricing information, including their negotiated rates, and to provide consumer-friendly

online tools to allow consumers to compare prices and estimate out-of-pocket costs.8

But many large hospital corporations have bucked the federal requirements and are

actively working to keep their prices hidden.9 The Lower Costs, More Transparency

Act and the Health Care PRICE Transparency Act 2.0 make clear, without any exception, that all hospitals and insurers are required to post the underlying price of

health care services, in a standardized machine readable and consumer-friendly format.

The American public is in broad agreement about the need for action on price

transparency, with polling showing that a large majority (95%) of the public say it

is important for Congress to pass a law to make health care costs more transparent

to patients, including 60% who call this a top priority.10

Medicare for All Act 

The current medical system is complicated and is not patient friendly. The Medicare for All Act would simplify this process and ensure every American has access

to quality, affordable health care regardless of income.

Question:

Ms. Tripoli, how would a system with one insurance plan improve the issues that

health care consumers currently face?

Response:

Every individual and family throughout the nation should have access to the best

health and health care, regardless of who they are, where they are from, or how

much money they make. This includes putting in place a sustainable, competitive,

and affordable system of health care and coverage for all. There are a number of

pathways to achieve universal health coverage. In all of them, it is critical to address the underlying drivers of our nation’s health care affordability and quality crisis, including reining in the impact of unchecked health care industry consolidation

on health care prices. Policymakers should enact a range of bipartisan, commonsense policy solutions to address high and rising health care prices including
71

11Gallup, Record High in U.S. Put Off Medical Care Due to Cost in 2022, January 2023.

https://news.gallup.com/poll/468053/record-high-put-off-medical-care-due-cost-2022.aspx. See

also, NORC at the University of Chicago and West Health, Americans’ Views on Healthcare

Costs, Coverage and Policy, March 2018 https://www.norc.org/NewsEventsPublications/

PressReleases/Pages/survey-finds-large-number-of-people-skipping-necessarymedical-care-because-cost.aspx; Naomi N. Levey, 100 Million People in America are Saddled with Health Care

Debt, Kaiser Health News, June 16, 2022, https://khn.org/news/article/diagnosis-debt-investigation-100-million-americans-hidden-medical-debt/; Robert A. Berenson et al., Addressing Health

Care Market Consolidation and High Prices, The Urban Institute https://www.urban.org/sites/

default/files/publication/101508/addressing—health—care—market—consolidation—and—high—

prices—1.pdf

12Medicare Payment Advisory Commission, ′′Medicare and the Health Care Delivery System,

Report to the Congress,′′ MedPAC, June 2023, https://www.medpac.gov/wpcontent/uploads/2023/

06/Jun23—MedPAC—Report—To—Congress—SEC.pdf; H

strengthening and codifying hospital price transparency rules,11 so that hospitals

provide real prices (in dollars and cents) to consumers in advance of delivering care;

enacting comprehensive site neutral payments as recommended by MedPAC that

ensures consumers pay the same price for the same service regardless of where that

care is delivered,12 as well as billing transparency reforms that ensure large hospital systems do not overcharge for the care they deliver in outpatient settings; banning anti-competitive contracting terms in health care provider and insurer contracts - such as ′′all-or-nothing,′′ ′′anti-steering,′′ and ′′anti-tiering′′ clauses - and in

clinician and health care worker employment arrangements - such as ′′non-compete′′

clauses; and requiring meaningful ownership transparency and strengthening FTC

authority to effectively oversee health care markets.

Statement for the Record

75

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

STATEMENT FOR THE RECORD

Statement of 75 Alliances, Unions, and Employers

We write asking you to support the bipartisan Senate Bill 3548, The Health Care

PRICE Transparency Act 2.0, introduced by Senate Health Education Labor and

Pensions (HELP) Committee Chairman Bernie Sanders and Committee member

Senator Mike Braun. The transparency provisions in this bill will empower employers and unions like ours, which provide coverage to nearly 160 million Americans,

to greatly reduce our health plan costs, improve our business competitiveness, and

share savings with employees through higher wages and lower premiums.

Currently, employers and unions nationwide are blocked from accessing, auditing

or leveraging their own health claims data. The situation is so dire that many have

had to sue their own insurers and third-party administrators (TPAs) to gain access

to their own data and fulfill their fiduciary duty.

The Health Care PRICE Transparency Act will, among other priorities, empower

us as employers to access our claims data through a daily data transaction set. This

data feed acts as a daily receipt for our plan payments to providers, allowing us to

confirm that the claim amounts match both the payments by the TPA and the negotiated prices. It will enable the identification and remedy of overcharges and erroneous billing, allowing us to perform the fundamental oversight of our health plan

spending. The bill also removes anti-audit and similar obstacles currently rampant

in health plan administrator contracts, making it easier for employers to audit and

oversee our plan spend effectively.

By building on the existing Transparency in Coverage (TiC) regulation, this bill

strengthens consumer access to health plan pricing data with all billing and coding

elements, helping us protect our employees from overcharges and assess the value

and performance of our plan. Seeing systemwide prices across all plans will empower us to negotiate higher quality, lower cost care, as we do for every other aspect

of our supply chains.

This bill also requires disclosure of all hospital pricing data including all negotiated rates and discounted cash prices not estimates, averages, or percentages. This

price disclosure will enable us to identify wide price variation, steer employees to

lower priced facilities, and compare our plans negotiated prices with others.

Finally, the bill expands price disclosure requirements to laboratories, imaging

centers, and ambulatory surgical centers, informing consumers of alternatives to

high-priced hospital systems.

On behalf of the over 21 million employees we collectively represent, we ask you

to please support the Braun-Sanders Health Care PRICE Transparency Act 2.0 in

the reconciliation process. By bringing systemwide transparency and accountability

to healthcare, this bill provides employers and unions with the necessary tools to

lower our healthcare costs, with no added cost to the government. The significant

savings can then be used to increase earnings and wages, ultimately improving competitiveness and stimulating the American economy.

Sincerely,

75 Alliances, Unions and Employers Nationwide

CC: United States Senate

Alliances 

Alabama Employer Health Consortium

Dallas-Fort Worth Business Group on Health

Employers’ Advanced Cooperative on Healthcare

Employers’ Forum of Indiana

Florida Alliance for Healthcare Value

Greater Philadelphia Business Coalition on Health

HealthCareTN

Houston Business Coalition on Health

Independent Colleges and Universities Benefits Association (ICUBA)

Kansas Business Group on Health

Lehigh Valley Business Coalition on Health

MidAtlantic Business Group on Health
76

Midwest Business Group on Health

Nevada Business Group on Health

Oklahoma Business Collective on Health

Rhode Island Business Group on Health

Texas Business Group on Health

Texas Employers for Affordable Healthcare

The Alliance - Midwest

Washington Health Alliance

Unions 

32BJ SEIU

International Union of Bricklayers and Allied Craftworkers Local 1 CT

National Association of Police Organizations

New Jersey State Policemen s Benevolent Association

Teachers Health Trust

Employers 

Agra Industries, Wisconsin

American Licorice, Indiana

Applied Laser Technologies, Wisconsin

Broadway Metal Works, Virginia

Conner Insurance, Indiana

Consolidated Scrap Resources, Inc., Pennsylvania

Curran Group, Illinois

Dick Myers, Inc., Virginia

Diversified Industrial Service Company, Texas

Dupre Logistics, Louisiana

Dynamic Aviation Inc., Virginia

Enerquip, Wisconsin

Faulks Bros Construction, Wisconsin

Frank Blum Construction, North Carolina

Glass and Metals Inc., Virginia

Harman Construction, Inc., Virginia

Health Rosetta, Washington

Hospice of Wichita Falls, Texas

Hyster-Yale, Ohio

InterChange Group; Inc., Virginia

Lantz Construction Company, Virginia

LD&B Insurance & Financial Services, Virginia

Lincoln National Bank, Kentucky

Lynch Companies, Wisconsin

Mayville Engineering Company, Inc., Wisconsin

Menasha Joint School District, Wisconsin

Meshoppen Stone, Pennsylvania

Midwest Carriers, Wisconsin

Mitchell Metal Products, Wisconsin

Moose Pharmacy, North Carolina

Myers Ford Co., Inc., Virginia

Nolato Contour, Wisconsin

Nordic Group of Companies, Wisconsin

Pacific Steel & Recycling, Montana

Partners Excavating Company, Virginia

Ponsse North America, Wisconsin

Railside Enterprises, Inc., Virginia

Rockingham Cooperative, Virginia

Rosen Hotels & Resorts, Florida

SavATree, New York

Second Harvest Food Bank of Central Florida, Florida

SFS Tools & Safety, LLC, Virginia

Shickel Corporation, Virginia

Synthomer, Ohio

Team Schierl Companies, Wisconsin

The Frazier Quarry, Inc., Virginia

The Weber Group, Wisconsin

Valley Engineering, PLC, Virginia

Vero Orthopaedics, Florida

Walker Forge, Inc., Wisconsin
77

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

STATEMENT FOR THE RECORD

Statement of Patient Rights Advocate.Org Letter

Thank you for holding a hearing on health care price transparency, lowering

costs, and empowering patients. As a nonprofit advocating for systemwide price

transparency in healthcare, we believe that empowering consumers and employers

with actual, upfront prices will create a functional, competitive market, protect patients from overcharges, and greatly reduce healthcare costs.

We strongly endorse the bipartisan Senate Bill 3548, The Health Care PRICE

Transparency Act 2.0, introduced by Senate Health Education Labor and Pensions

(HELP) Committee member Senator Mike Braun and Committee Chairman Bernie

Sanders. Earlier this year, 75 alliances, unions and employers from across the country, representing more than 21 million employees, also endorsed this bill in the attached letter sent to bipartisan Senate leadership.

The price transparency provisions in this bill will empower employers and unions

like them to greatly reduce their health plan costs, improve their business competitiveness, and share savings with employees through higher wages and lower premiums. Currently, employers and unions nationwide are blocked from accessing and

analyzing their own health claims data to identify overcharges and savings opportunities. Many have had to sue their own insurers and third-party administrators

(TPAs) to gain access to their own data and fulfill their fiduciary duty.

The Health Care PRICE Transparency Act 2.0 will, among other priorities, empower self-insured employers and union health plans to access their claims data

through access to a daily transaction data set. This data feed will act as a daily receipt of plan payments to providers, allowing employers to confirm that the claim

amounts match both the payments by the TPA and the negotiated prices. It will enable employers and union health plans to identify and remedy overcharges and erroneous billing, allowing them to perform the critical oversight of their health plan

spending. The bill also removes anti-audit and similar obstacles rampant in health

plan administrator contracts, making it easier for employers to audit and oversee

their plan receipts for payment.

This bill also requires transparency of all hospital pricing data including all negotiated rates and discounted cash prices not estimates, averages, or percentages. This

price disclosure will enable consumers to identify wide price variation, find lower

priced care, and compare their plan s negotiated prices to those of other plans. The

bill requires increased enforcement for noncompliant hospitals, at a time when only

34.5% of hospitals reviewed are fully compliant and the Centers for Medicare and

Medicaid Services (CMS) has only penalized fifteen hospitals for noncompliance.

By building on the existing Transparency in Coverage (TiC) regulation, this bill

strengthens consumer access to health plan pricing data with all billing and coding

elements, helping employers protect their employees from overcharges and assess

the value and performance of their health plan. Seeing systemwide prices across all

plans will empower employers to negotiate higher quality, lower cost care, as is the

case for every other aspect of supply chains.

Finally, the bill expands price disclosure requirements to laboratories, imaging

centers, and ambulatory surgical centers, informing consumers of alternatives to

high-priced hospital systems.

By bringing systemwide transparency and accountability to healthcare, this bill

provides employers and unions with the necessary tools to lower our healthcare

costs, with no added cost to the government. The significant savings can then be

used to increase earnings and wages, ultimately improving competitiveness and

stimulating the American economy.

Sincerely,

Cynthia Fisher

Founder & Chairman PatientRightsAdvocate.org

CC: United States Senate
78

1K. Robin-Yabroff, PhD, Angela Mariotto, PhD, et al., Annual Report to the Nation on the

Status of Cancer, Part 2: Patient Economic Burden Associated With Cancer Care, JNCI: Journal

of the National Cancer Institute, Volume 113, Issue 12, December 2021, Pages 1670-1682,

https://doi.org/10.1093/jnci/djab192

2The Leukemia & Lymphoma Society. Cost of Cancer Care Initiative. Accessed at www.lls.org/

CancerCost

3GAO (2015) Increasing Hospital-Physician Consolidation highlights Need for Payment Reform. Accessed at https://www.gao.gov/assets/680/674347.pdf

4Milliman (2016) Cost Drivers of Cancer Care: A Retrospective Analysis of Medicare and

Commercially Insured Population Claim Data 2004-2014. Accessed at https://

www.communityoncology.org/wpcontent/uploads/sites/20/2018/07/Trends-in-Cancer-Costs-WhitePaper-FINAL-20160403.pdf

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

STATEMENT FOR THE RECORD

Statement of Leukemia and Lymphoma Society

On behalf of the more than 1.5 million Americans living with a blood cancer diagnosis, The Leukemia & Lymphoma Society (LLS) appreciates the opportunity to provide recommendations to address the nation’s rising healthcare costs and improve

transparency in our healthcare system. As an organization that has invested in the

fight to cure cancer, LLS knows that the cost of care associated with a blood cancer

diagnosis is too high and continues to rise. We receive over 20,000 calls to our Information Resource Center (IRC) annually, the vast majority of which pertain to the

cost burden of cancer.

In response to cost growth in recent years, payers and policymakers have often

passed the burden to patients in the form of increased cost-sharing and changes

that erode the quality of care accessible to cancer patients. In 2019, the national

patient economic burden associated with cancer care was over $21 billion, including

direct patient out-of-pocket costs of more than $16 billion.1

LLS launched our Cost of Cancer Care initiative in 2017 to address this growing

issue, and we continue to advocate for aggressive but feasible cost-cutting policy solutions that would not sacrifice quality of care.2 We offer the following policy recommendations for the Committee to consider to help lower healthcare costs,

incentivize high-quality care, and increase healthcare transparency.

Expand Site-Neutral Payments

LLS encourages Congress to pursue expanding site-neutral payments in Medicare.

Expanding site-neutral payment-the practice of paying equally for services whether

they are associated with a physician practice or an outpatient hospital setting-has

the potential to lower patient out-of-pocket costs, reduce unnecessary Medicare

spending, and reduce incentives for hospitals to participate in anticompetitive practices (such as buying up physician practices).

Vertical consolidation between hospital and physician office settings continues to

rise, driven in part by the ability of hospital entities to receive higher hospital outpatient reimbursements for services performed at the facility that had previously

been considered a physician office. According to the Government Accountability Office (GAO), between 2007 and 2013, the number of vertically consolidated physicians

nearly doubled from 96,000 to 182,000.3 Further, a 2016 study found that the proportion of chemotherapy infusions delivered in a hospital increased from 15.8 percent in 2004 to 45.9 percent in 2014 in the Medicare population.4

We urge the Committee to consider implementing site-neutral payment policies as

outlined in H.R. 5378, the Lower Costs, More Transparency Act, which passed the

House of Representatives on an overwhelmingly bipartisan basis last year. The siteneutral policies included in this bill take steps to adjust incentives by expanding existing site-neutral payments for drug administration services. LLS strongly supports

advancing this policy and looks forward to working with Congress to advance and

expand site-neutral payments or other payment changes intended to address the

ways in which consolidation negatively impacts patients.

Experts have repeatedly identified site-neutral payments as an opportunity to

save money for Medicare. The Congressional Budget Office (CBO) estimated that

the site-neutral policies in the Lower Costs, More Transparency Act would result
79

5 Congressional Budget Office. (2023) ′′Estimated Direct Spending and Revenue Effects of H.R.

5378, the Lower Costs, More Transparency Act.′′ Accessed at: hr5378-DS-and-Revs—12-2023.pdf

(cbo.gov)

6Stewart, R. (2023) ′′Site Neutral Payment Reform Has the Potential to Significantly Reduce

Out-Of-Pocket Patient Spend′′ Wakely. Accessed at: Site Neutral Payment Reform has the Potential to Significantly Reduce Out-of-Pocket Patient Spend (lls.org)

in over $3.7 billion in Medicare savings.5 More importantly, these policies also reduce cost-sharing for beneficiaries and limit non-clinical incentives to provide services in more expensive settings - without compromising beneficiary access to care

or health outcomes. Research commissioned by LLS has demonstrated that requiring site-neutral payment for drug administration services can result in significant

out-of-pocket savings for patients. A patient with multiple myeloma, for example,

could save $1,200/year under this policy.6 In addition to saving taxpayer dollars and

reducing patient out-of-pocket costs, equalizing payments between these sites of

service would weaken the incentive for provider consolidation, which would also

produce long-term cost savings and provide patients with additional options for their

care.

Unique Identifiers

Medicare payments to providers currently include limited information about

where the service is provided. For example, codes do not distinguish if services are

delivered on a hospital campus or at an affiliated provider, such as a primary care

doctor or infusion center that may be geographically separate from the primary hospital’s physical campus. Because Medicare payments for hospital outpatient departments (HOPDs) are reimbursed at a higher rate than physician’s offices, hospitals

are incentivized to purchase smaller providers and reclassify them as HOPDs.

In addition to site-neutral reforms, several proposals under consideration in Congress would, if passed, require hospitals and providers to report more granular data

regarding where services are being provided-at a hospital’s primary facility or at a

provider beyond the boundaries of the hospital’s physical campus. These simple

transparency requirements would provide data that would help policymakers and

researchers better understand hospital revenue cycles and consolidation trends, as

well as their implications on patients and national budget outlays. LLS strongly

supports legislation that would improve site-of-service transparency to better understand if healthcare systems are using consolidation and other anti-competitive behaviors to game federal payments.

Enforce Provider Price Transparency Rules

One crucial way this Congress can address provider consolidation and encourage

competition in the healthcare system is through price transparency. While multiple

federal rules are in effect requiring disclosure of negotiated prices between health

plans, physicians, and hospitals, compliance is lacking. Price transparency is a

means to an end, and stakeholders must be able to access and analyze data to identify cost drivers and make informed healthcare policy decisions. Congress should direct the Centers for Medicare and Medicaid Services (CMS) to provide hospitals and

health plans with better datareporting standards and usability guidelines to ensure

that transparency leads to the goal of a more cost-efficient healthcare system.

Bring Transparency to Pharmacy Benefit Managers (PBMs)

Given the nature of blood cancers, many patients rely on prescription drugs as

their primary therapy. As a result, blood cancer patients often access their cancer

therapy via their insurance plan’s pharmacy benefit-typically managed by their

plan’s contracted pharmacy benefit manager (PBM). LLS believes that the

healthcare system needs greater transparency, oversight, and guardrails in order to

ensure that PBM financial incentives are aligned with the goals of both plans and

patients.

Congress should require that PBMs provide comprehensive quarterly reporting to

plan sponsors, including details about the list and net prices for drugs accessed

through the pharmacy benefit as well as comprehensive rebate information for each

drug. Additionally, PBMs should be required to provide important information related to the inflated out-of-pocket costs paid by plan enrollees utilizing a drug whose

enrollee cost-sharing is based on its list price rather than net price. Plan sponsors

should be aware of the impact on enrollees of choosing to base cost-sharing on an

inflated list price, which dramatically increases the cost burden for patients who

rely on drugs with high list prices in order to provide a small amount of savings

either to plan cost or enrollee premiums. This trade-off has significant consequences
80

for plan enrollees with blood cancer and other chronic and/or life-threatening conditions, and plan sponsors should be aware of the impact on these enrollees.

Congress should also prohibit spread pricing-a practice that positions a PBM’s financial incentives in opposition to the incentives of the plan sponsor for whom they

are managing the prescription benefit. Spread pricing describes the practice of

PBMs administering a plan’s drug benefits charging a plan sponsor far more for a

drug than the drug’s pharmacy acquisition cost, with the potentially vast difference

between the two costs going to the PBM’s bottom line. This practice prevents plan

sponsors, enrollees, and patients filling their prescriptions from experiencing the financial benefits of generic competition, and it serves no purpose other than to reward PBMs for behavior contrary to the interests of the entities on whose behalf

they are contracted to work.

Facilitate Competition through Consumer-Friendly Plan Transparency

When shopping for coverage during enrollment periods, consumers do not have access to clear and transparent information about the amount they would be required

to pay as their share of the cost of a medication. This is due largely to the prevalence of coinsurance, a cost-sharing technique that requires consumers to pay a percentage of a drug’s total cost. Plan formularies typically represent coinsurance as

a percentage only - e.g. ′′30%′′ or ′′45%′′ - with no accompanying information that

consumers can use to translate that percentage to an actual dollar amount. Thus

consumers must select and enroll in a plan without a full understanding of the affordability of one plan’s drug benefit versus another.

This lack of transparency poses a real threat to patient well-being: patients are

more likely to abandon treatment when the cost of their care is high, a dynamic

that is exacerbated when patients are unable to anticipate and plan for the precise

out-of-pocket cost of their care. This lack of transparency is harmful to the marketplace as well, as it diminishes competition among plans.

In order to facilitate greater transparency regarding cost-sharing for medications:

-Congress should require CMS to improve Medicare Plan Finder to convey important information on out-of-pocket drug costs so that consumers can judge their

health care options based on complete information about the impact of their decision

on their financial and physical health, and

-Congress should require qualified health plans (QHPs) to provide transparency regarding the plan’s prescription drug formulary, including meaningful

cost-sharing information, to consumers during the open enrollment process. At a

minimum, QHPs should be required to include for every covered drug a range of

out-of-pocket spending for the prescription (e.g. $-$$$$ OR $010, $11-25.$500+, etc.)

Conclusion

LLS stands ready to work with you and your colleagues in Congress to advance

the solutions we have outlined above and other proposals that would achieve savings without sacrificing patient access to appropriate cancer care. We share your belief that we are at a crucial juncture in our healthcare system, and we urge you

and your colleagues to capitalize on this real opportunity to make the reforms necessary to promote patient access to appropriate care while eliminating incentives

that drive unnecessary spending. We are grateful for your leadership.

Sincerely,

Brian Connell

Executive Director of Federal Affairs
81

1https://www.medpac.gov/wp-content/uploads/2023/10/MedPAC-MA-status-report-Jan-2024.pdf

2https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

STATEMENT FOR THE RECORD

Statement of American Hospital Association

On behalf of our nearly 5,000 member hospitals, health systems and other health

care organizations, our clinician partners - including more than 270,000 affiliated

physicians, two million nurses and other caregivers - and the 43,000 health care

leaders who belong to our professional membership groups, the American Hospital

Association (AHA) writes to share the hospital field’s comments on health care costs

and transparency.

OVERVIEW OF NATIONAL HEALTH SPENDING

America’s hospitals and health systems - physicians, nurses and other caregivers

- understand and share concerns regarding the high cost of health care and are

working hard to make care more affordable by transforming the way health care is

delivered in our communities. Real change will require an effort by everyone involved, including providers, the government, employers and individuals, device makers, drug manufacturers, insurers and other stakeholders.

The AHA’s most recent ′′Cost of Caring′′ report provides greater details on the

challenges hospitals face with respect to treating patients with higher acuities while

dealing with financial instability. The issues include workforce shortages and increasing supply chain costs, coupled with inadequate reimbursement from government payers and increased administrative burden related to commercial insurance

efforts to reduce compensation. Taken together, these factors create an environment

of financial uncertainty in which many hospitals and health systems are operating

with little to no margin.

For this statement, we highlight two of the cost drivers incurred by hospitals and

health systems: commercial insurer operating methods and prescription drug costs.

Commercial Insurer Practices

To truly reduce health care costs, we urge Congress to address practices by certain commercial health insurers. For example, additional oversight is needed to ensure that Medicare Advantage (MA) plans can no longer engage in tactics that restrict and delay access to care while adding burden and cost to the health care system.

While MA plans were designed to help increase efficiency in the Medicare program, data from the Medicare Payment Advisory Commission (MedPAC) found that

MA plans will be responsible for $88 billion in excess federal spending this year,

due in part to inappropriate upcoding practices, whereby plans report enrollees as

having more health conditions and being sicker than they are to receive higher reimbursements. At the same time, health insurance premiums continue to grow - in

fact, annual insurance premiums increased nearly twice as much as hospital prices

over a 10-year period.1

Additionally, inappropriate denials for prior authorization and coverage of medically necessary services remain a pervasive problem among certain MA plans. A

2022 report from the Department of Health and Human Services (HHS) Office of

Inspector General found that MA plans are denying at a high rate medically necessary care that met Medicare criteria.2 The report highlights that 13% of prior authorization denials and 18% of payment denials met Medicare coverage rules and

therefore should have been approved. In a program this size - covering more than

half of all Medicare beneficiaries - improper denials at this rate are unacceptable.

However, because the government pays MA plans a risk-adjusted per-beneficiary

capitation rate, there is a perverse incentive to deny services to patients or payments to providers to boost profits.

These practices delay access to care for seniors and add financial burden and

strain on the health care system through inappropriate payment denials and increased staffing and technology costs to comply with plan requirements. They also

are a major burden to the health care workforce and contribute to provider burnout.

To address these issues, the AHA supports regulatory and legislative solutions that

streamline and improve prior authorization processes, including the Improving Sen-
82

3https://www.ama-assn.org/practice-management/prior-authorization/health-systems-playedpayer-takeback-schemes

4 AHA analysis of NHE projections of 2022-2031 expenditures.

5https://www.wsj.com/health/pharma/drugmakers-raise-prices-of-ozempic-mounjaro-and-hundreds-ofother-drugs-bdac7051

6https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs

7https://aspe.hhs.gov/reports/drug-shortages-impacts-consumer-costs

8https://link.springer.com/article/10.1007/s13181-023-00950-

6:text=shortages%20compromise%20or%20delay%20medical,morbidity%20%5B1%2C%202%5D.

iors’ Timely Access to Care Act (S. 4532), which would codify many of the reforms

in the Interoperability and Prior Authorization Final Rule.

Though issues with denials are often felt most acutely with MA and Medicaid

managed care plans, these practices also are followed by other commercial payers,

where claims denials increased by 20.2% in 2023. Moreover, the time taken by commercial payers to process and pay hospital claims from the date of submission increased by 19.7% in 2023, according to data from the Vitality Index. For hospitals

and health systems, these practices, which require hospitals to divert dollars away

from patient care to instead focus on seeking payment from commercial insurers,

result in billions of dollars in lost revenue each year.3 Without further intervention,

these trends are expected to continue and worsen. National expenditures on the administrative costs of private health insurance spending alone are projected to account for 7% of total health care spending between 2022 and 2031 and are projected

to grow faster than expenditures for hospital care.4

Prescription Drug Prices

Congress also should address the high costs of prescription medications, given the

regular increases in costs, as this impacts expenses for all providers, including hospitals. For instance, a report from earlier this year noted pharmaceutical companies

raised list prices on 775 brand name drugs during the first half of January 2024,

with a median increase of 4.5%, though the prices of some drugs rose by 10% or

higher.5 These increases were higher than the rate of inflation, which was 3.4% in

December. A report by the HHS Assistant Secretary for Planning & Evaluation

(ASPE) found that between 2022 and 2023 drug companies increased drug prices

for nearly 2,000 drugs faster than the rate of general inflation, with an average

price hike of 15.2%.6

Moreover, recent drug shortages also have fueled further expense growth. An

ASPE report found up to a 16.6% increase in the prices of drugs in shortage; in

many cases, the increase in the price of substitute drugs were at least three times

higher than the price increase of the drug in shortage.7 The costs incurred as a result of drug shortages are compounded by staff overtime needed to find, procure and

administer alternative drugs, to manage the added challenges of multiple medication dispensing automation systems and changing electronic health records and to

undergo training to ensure medication safety using alternative therapies.8

MEDICAL DEBT

Hospitals and health systems are very concerned about patients’ medical debt,

which is a consequence of patients not paying some or all their health care bills.

While health insurance is intended to be the primary mechanism to protect patients

from unexpected and unaffordable health care costs, for too many that coverage is

either unavailable or falling short.

Trends in health insurance coverage that are driving an increase in medical debt

include inadequate enrollment in comprehensive health care coverage, growth in

highdeductible and skinny health plans that intentionally push more costs onto patients and misleading health plan practices that confuse patients’ understanding of

their coverage. These gaps in coverage leave individuals financially vulnerable when

seeking medical care. The primary causes of medical debt are:

–There are still too many uninsured Americans. Affordable, comprehensive

health care coverage is the most important protection against medical debt. While

the U.S. health care system has achieved higher rates of coverage over the past decade, gaps remain.

–High-deductibles subject many Americans to cost-sharing they cannot afford.

High-deductible plans are designed to increase patients’ financial exposure through

high cost-sharing in exchange for lower monthly premiums. Yet many individuals

enrolled in high-deductible plans find they cannot manage their portion of health

plan expenses. A Federal Reserve report found that 37% of adults would not be able
83

9https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in2022expenses.htm

10https://kffhealthnews.org/news/sham-sharing-ministries-test-faith-of-patients-and-insuranceregulators/

11https://healthyfuturega.org/ghf—resource/preventive-services-coverage-and-cost-sharingprotectionsare-inconsistently-and-inequitably-implemented/

12https://www.aha.org/system/files/media/file/2020/01/2020-Uncompensated-Care-FactSheet.pdf

to afford a $400 emergency,9 an amount $1,000 less than the average general annual deductible for single, employer-sponsored coverage.

–Certain health plans provide inadequate benefits and frequently lead to surprise gaps in coverage. Short-term, limited-duration health plans and health sharing

ministries cover fewer benefits and include few to no consumer protections, such as

required coverage of pre-existing conditions and limits on out-of-pocket costs. Patients with these types of plans often find themselves responsible for their entire

medical bill without any help from their health plan, including for critical services

such as emergency medical and oncology care. These denials can lead to an accumulation of significant medical debt.10

–Complex health plan benefit design and misleading marketing can expose

patients to unexpected costs. Many health plans have complex benefit designs that

are not transparent to patients, such as what is covered predeductible, the interaction between point-of-service copays, coinsurance and deductibles and poor communication and education about what the plan covers. For example, a recent National Association of Insurance Commissioners report found significant gaps and inconsistencies with the way that insurers share information about pre-deductible, no

cost-sharing preventive services with their members, resulting in a ′′meaningful barrier to effective understanding and use of preventive service benefits.′′

11

Hospitals are the only part of the health care sector that provide services to patients regardless of their ability to pay. They underscore that commitment by offering financial and other assistance, including helping patients qualify for federal and

state health care programs, such as Medicaid. In doing so, patients can receive regular preventive care, not just episodic care for serious injuries or illness. In addition,

hospitals absorb billions of dollars of losses for patients who are unable to pay their

bills, mainly due to inadequate commercial insurance coverage; in 2020, the latest

figure available, hospitals provided more than $42 billion in uncompensated care.12

This is why hospitals are staunch supporters of ensuring everyone is enrolled in

some form of comprehensive coverage. However, we appreciate that closing the remaining coverage gaps may be a longer-term solution and that more immediate

steps can be taken. To that end, the AHA has routinely developed patient billing

guidelines to help prevent patients from incurring medical debt. The AHA’s Board

of Trustees adopted the most recent set of guidelines in 2020, which reaffirm the

hospital field’s commitment to:

-Treating all people equitably, with dignity, respect and compassion.

-Serving the emergency health care needs of all, regardless of a patient’s ability to pay.

-Assisting patients who cannot pay for part or all the care they receive.

Notably, several of the guidelines directly address medical debt, including encouraging hospitals to forego adverse credit reporting of medical debt, so far, nearly

2,800 hospitals and health systems have affirmed their commitment to the guidelines, and the AHA revisits them regularly for updating.

PRICE TRANSPARENCY REQUIREMENTS

We appreciate Congress’ ongoing interest in hospital price transparency to provide

consumers with the price information they need specific to their course of treatment.

Hospitals and health systems have invested considerable time and resources to

comply with the Hospital Price Transparency Rule, which requires online access to

both a machine-readable file and a list of shoppable services. Recent data from Turquoise Health shows that 93.4% of hospitals have met the requirement to post a

machinereadable file.

We are concerned, however, with recent legislative efforts to no longer recognize

price estimator tools as a method to meet the shoppable services requirement. This

change would both reduce access to a consumer-friendly research tool and unfairly

penalize hospitals that have spent significant capital to comply with the regulation.

These facilities would instead need to develop and maintain a shoppable services

spreadsheet, which may be difficult for consumers to navigate and will not reflect

the different policies that their insurer may apply to determine the final price for
84

a service. Price estimator tools offer consumers an estimate of their out-of-pocket

costs based on their insurance benefit design, such as cost-sharing requirements and

prior utilization, as well as the patient’s annual deductible. This is an important

feature of these tools that is not available from a shoppable services spreadsheet.

Eliminating the use of price estimator tools as a method to meet the shoppable services requirement of the Hospital Price Transparency Rule would therefore reduce

price transparency for patients. We urge Congress to reject this potential change.

As Congress seeks to make statutory changes to price transparency standards, it

is important for legislators to take into consideration the adjustments to the Hospital Price Transparency Rule made by the Centers for Medicare & Medicaid (CMS)

on a regular basis. These include changes related to standardization, new data elements, file accessibility, an accuracy and completeness affirmation, as well as

changes to CMS’ monitoring and enforcement processes. Most notably, CMS now requires hospitals to use a standard format to comply with the machine-readable file

requirement, which includes new data elements such as negotiated rate contracting

type or methodology, an accuracy and completeness affirmation and (as of January

1, 2025) an ′′estimated allowed amount.′′ CMS also now requires that hospitals’ price

transparency information be more easily found on their websites.

Regarding compliance and enforcement, hospitals may be required to have an authorized hospital official certify the accuracy and completeness of the hospital’s machine-readable file during the monitoring and enforcement process. CMS also can

require hospitals to provide additional documentation at the agency’s request, including contracting documentation needed to validate the hospital’s negotiated rates

and verification of the hospital’s licensing status.

In addition, CMS increased its efforts to publicize hospital-specific information on

all compliance assessment and enforcement activity, which it now updates regularly

on a public website. This includes details related to CMS’ assessment of hospital

compliance, any compliance actions taken against a specific hospital, the status of

the compliance action(s) and the outcome of the action(s). A list of the civil monetary

compliance notices and fines issued to date is available on the CMS website. The

fines vary in scope, from $55,000 to nearly $1 million, for those hospitals that have

been deemed out of compliance with the Hospital Price Transparency Rule. CMS

clearly has the authority and willingness to enforce compliance with the rule and

assess significant fines, regardless of statutory activity.

CONCLUSION

Thank you for your consideration of the AHA’s comments on issues related to

health care expenditures. We look forward to continuing to work with you to address these important topics on behalf of our patients and communities.
85

U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

STATEMENT FOR THE RECORD

Statement of AHIP

AHIP is the national association that represents health insurance plans that provide coverage, services, and solutions for over 205 million Americans through public

programs such as Medicare and Medicaid, employer-sponsored insurance, and the

individual insurance market.

We appreciate the Committee’s attention to the issue of health care transparency

and encourage efforts to increase transparency and accessibility of health care for

older Americans. We share the Committee’s goal of achieving better health outcomes

and more affordable health care, and increased price transparency is a step in the

right direction.

Our statement for the Committee’s July 11 hearing outlines several policy considerations and highlights the ways health insurance plans are implementing innovative solutions to increase access and transparency for older Americans, such as providing clear information on coverage options, strengthening Medicare, and addressing the cost of high-priced prescription drugs.

Commitment to Price Transparency

AHIP and our member health insurance plans fully support the goals of providing

actionable information about the cost and quality of health care services to enable

older Americans to make better-informed decisions.

Health insurance plans are often the best resource for providing consumers with

personalized and accurate cost information, offering tools that enable consumers to

obtain specific data about their coverage while protecting the privacy and security

of their personal health information. For example, consumers use these tools to understand their benefits and provider networks, and cost sharing.

Health insurance plans continue to work to increase consumer awareness and use

of these tools through, among other methods, member portal messages, outreach efforts, and text messaging campaigns. Older Americans deserve to know how much

their care and prescriptions will cost before they receive them, as well as how to

access the highest value services. Health insurance plans are committed to empowering seniors with the information they need, when they need it, so they can make

health care decisions that are right for them.

Medicare Advantage Provides Choice, Value and Transparency for Older

Americans

More than 33 million seniors and people with disabilities actively choose Medicare

Advantage (MA) for their Medicare coverage. MA offers high-quality care and support, financial protections, and affordable coverage options so enrollees can pay less

and receive better care.

MA Empowers Choice

MA offers a market-based framework that encourages competition and provides

seniors and people with disabilities with options for finding a package of benefits

that best meets their needs. An average Medicare beneficiary in 2024 has access to

43 MA plans, with specialized plans also available to certain populations such as

retirees or individuals who also have Medicaid coverage.1

These different options provide enrollees with the same basic covered benefits

available in feefor-service (FFS) Medicare. However, unlike FFS, all MA plans are

required to limit annual outof-pocket spending, with most offering a wide range of

extra benefits, called supplemental benefits. These benefits can include reduced cost

sharing for basic Medicare benefits and offer important benefits unavailable in FFS

such as dental, vision, and hearing services; innovative telehealth options; wellness

programs; and nutrition, transportation, and in-home caregiver services. The Medicare Payment Advisory Commission (MedPAC) reports that in 2024, MA enrollees

on average have access to more than $2,100 in added benefits.2 In addition, most

MA enrollees can obtain Part D drug coverage through an MA plan for no additional

premium.

To obtain similar financial protection or supplemental benefits, individuals in FFS

Medicare must purchase coverage at an additional monthly premium. One analysis

found that ′′MA enrollees spent, on average, $2,541 less on healthcare costs (spend-
86

ing on premiums and out-ofpocket expenses) than FFS Medicare enrollees in 2021.′′

3

Another analysis found that a 65-yearold retiree who chooses to enroll in MA needs

more than 40% less in savings to cover health care costs over their remaining lifetime as a person who chooses FFS Medicare.4

Transparency Aids Consumer Decision-Making and Program Analysis

Medicare beneficiaries have access to information about the plans available to

them through a variety of sources, including the Medicare program’s Medicare Plan

Finder. This tool provides data to beneficiaries, researchers, and others so they can

understand Medicare coverage options and benefits available under each available

plan in a particular service area.

In addition, significant data on MA supplemental benefits is currently available

and additional data will soon be available. The Centers for Medicare & Medicaid

Services (CMS) requires supplemental benefits data reporting through plan Medical

Loss Ratio (MLR) reporting. Effective for plan year 2024, CMS is collecting additional data through annual reporting requirements and ′′encounter data′′, including

use and cost data. CMS typically posts public use files of plan-reported data, which

can be used by researchers and other data analysts.5 Beginning in 2026, MA plans

will be required to send mid-year notices to enrollees regarding unused supplemental benefits.

MA plans also submit details to CMS on every claim they receive from providers,

including demographic information, diagnoses, and descriptions of services provided.

This ′′encounter data′′ is made publicly available for analysis by researchers and analysts, and detailed ′′landscape′′ files are released in advance of the annual Medicare

open enrollment period to allow analysts to identify key trends in the program.

In summary, whether it’s more choices for the health plan that fits a person’s

needs, more widespread availability of high-quality, integrated health coverage, and

greater access to health plans with $0 premium and drug coverage, MA is helping

drive immense value for the millions of older Americans the program serves.

-Recommendation: AHIP urges lawmakers and regulators to invest resources

to make further improvements to the comparison functionality on certain benefits

(including supplemental benefits) and to make other changes based on public input.

Q05

The Importance of Transparency in Reducing Drug Prices

Rising drug prices impose a heavy burden on all Americans, especially older

adults living on fixed incomes. This situation is a direct result of high list prices

determined solely by drug companies. Due to the high prices manufacturers set in

the U.S., twenty-two cents of every health care dollar go toward prescription drugs

- with drugs contributing more to health care costs and growing at a rate faster

than any other type of health care service.6

AHIP looks forward to working with the Committee to advance market-based solutions that hold drug makers accountable for setting high list prices and provide

relief to American families.

Manufacturers Set High Drug Prices

Any assessment of prescription drug affordability must start with the root causes

of high drug prices: drug manufacturers often hold monopoly power over medicines

and continue to prevent and undermine competition to keep drug prices as high as

possible in the U.S. This anticompetitive dynamic has a profound impact on older

Americans. For instance, over the 2009-2018 period, the average price of a brandname drug prescription more than doubled in the Medicare Part D program and increased by 50% in Medicaid.7

To make prescription drugs available and affordable for patients, health insurance

plans and their pharmacy benefit manager (PBM) partners negotiate with

drugmakers. These savings are passed along to patients and consumers through

lower premiums and out-of-pocket costs. However, the lack of transparency on how

drugmakers’ set prices or why they routinely increase prices on Americans multiple

times a year creates a barrier to developing new solutions to lower drug prices.

Solutions to Enhance Drug Pricing Transparency and Reporting

Consumers and taxpayers should have access to information on manufacturing

and research and development costs, net profits, and marketing and advertising

costs for expensive medications and manufactures should publicly justify price increases.

-Recommendation: AHIP urges Congress to consider policies that would require drugmakers to publicly justify high prices and report pricing information. Congress should advance S.1218, the Fair Accountability and Innovative Research
87

(FAIR) Drug Pricing Act, to apply basic transparency to drug pricing and require

drug manufacturers to justify price increases.

Disclosure of Drug Prices in Direct-to-Consumer (DTC) Advertising

Greater transparency is a crucial component of the broad-based strategy by lawmakers that is needed to provide consumers with relief from prescription drug

prices.

-Recommendation: Congress should pass S. 1250, the Drug-Price Transparency for Consumers Act, which would require drugmakers to disclose list prices

in DTC advertisements and provide disincentives for them to continue price gouging

patients.

Accessing Affordable Alternatives

Older Americans should be able to get the medications they need at costs they

can afford, including more affordable generics and biosimilars. However, drug companies are regularly abusing the patent system to keep lower-cost generic drugs

from reaching the market. AHIP supports supports a number of bipartisan Senate

legislative proposals to promote more competition and reduce drug costs, including:

-S.79, the Interagency Patent Coordination and Improvement Act, which

would establish an inter-agency cooperative task force to spur more collaboration in

patent-related functions.

-S.142, the Preserve Access to Affordable Generics and Biosimilars Act, which

would prevent anticompetitive ′′pay-for-delay′′ deals that delay and prevent the introduction of more affordable alternatives.

-S.148, the Stop STALLING Act, which would authorize the Federal Trade

Commission (FTC) to take action against drug companies when they game the patent system by filing frivolous petitions with the Food and Drug Administration

(FDA).

-S.150, the Affordable Prescriptions for Patients Act, which would begin to

limit drug manufacturers’ anti-competitive tactics such as product hopping and manipulating the patent litigation process.

-Recommendation: AHIP recommends the Committee work with the House of

Representatives to advance these pieces of legislation expeditiously and create a

more competitive drug market and lower costs for older Americans and all consumers.

Our members are fully committed to advancing solutions that provide relief to the

American people from out-of-control prescription drug prices. Common-sense steps

are needed to ensure that people have access to affordable medications. With solutions that deliver real competition, create more consumer choice, and reduce drug

prices, we can deliver more savings.

Additional Considerations

Impact of Concentrated Health Systems and Private Equity

A growing body of research consistently finds that the consolidation of health care

providers into health systems with market power is a primary driver of the high

costs of health care in the United States.8 Concentrated health systems often stifle

competition and limit the ability for health insurance plans to negotiate lower prices

for patients.

Private equity’s growing influence over portions of the provider market - from

nursing homes to ambulance providers to important specialties - has also resulted

in higher costs for the same, or worse, care resulting in higher out-of-pocket costs

and higher premiums.9 Additional growth of private equity ownership focused on extracting short-term profits, could further inflate health care costs.

-Recommendation: AHIP urges the Committee to prioritize policies that remove the incentives and opportunities for private equity firms focused on extracting

short term patients to exploit patients by acquiring specialty practices, ambulance

providers, and other portions of the system vulnerable to such abuses.

Improving Hospital Transparency by Advancing Site-Neutral Payments

Advancing site-neutral payments is a competition-enhancing approach that would

improve affordability and access for older patients and all Americans. Medicare’s

outdated payment structure has created an incentive for hospitals to acquire physician practices and superficially convert them to off-campus, provider-based hospital

outpatient departments. This loophole allows providers to charge patients substantially more for the same services and outcomes.
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Expanding site-neutral payment reforms would require transparency of these locations and improve payment accuracy in the Medicare program. Solutions that permit comparable payment for comparable services would protect consumers from hidden fees and encourage a more efficient and competitive market. An industry analysis found that if enacted site-neutral payments would save patients and taxpayers

close to $500 billion over ten years.10

-Recommendation: We urge the Senate to advance the bipartisan S. 1869,

SITE Act, which would reduce costs for consumers and the system by expanding

site-neutral payments and billing transparency.

Conclusion

Consumers need access to reliable estimates and explanations of their health care

costs. Health insurance plans will continue to help older Americans can get the information they need to make important decisions about their coverage and care.

Through meaningful collaboration with the Committee, we believe we can achieve

such a framework and help older Americans make wellinformed health care decisions aided by transparent information.
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U.S. SENATE SPECIAL COMMITTEE ON AGING

′′HEALTH CARE TRANSPARENCY: LOWERING COST AND EMPOWERING PATIENTS′′

JULY 11, 2024

STATEMENT FOR THE RECORD

Statement of Healthsystem Association of Pennsylvania

We are concerned that individual examples cited do not provide full information

and do not accurately reflect hospital pricing. The Committee should undertake a

holistic discussion about health care costs for patients, providers, and others in the

health care system. A recent report from the Pennsylvania Health Care Cost Containment Council (PHC4) found that more than half of Pennsylvania general acute

care hospitals are operating in the red. As you continue to evaluate opportunities

for health care reform, HAP strongly encourages you to address the underlying challenges facing hospitals in Pennsylvania and across the nation, including inadequate

reimbursement for the cost of care, outdated regulations that drive administrative

burden and cost, and continuum-wide workforce shortages. HAP and Pennsylvania’s

hospital community are committed to working with you to address these core challenges.

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