The House Energy and Commerce Committee is preparing to mark up healthcare price transparency legislation that proponents say could save the U.S. more than $1 trillion annually and give patients and employers the upfront pricing needed to avoid overcharges. But a new analysis warns the current bill falls short.
Economist Vivian Ho, who holds the James A. Baker III Institute Chair in Health Economics at Rice University and is a professor of medicine at Baylor College of Medicine, cross-referenced healthcare bills with actual insurance prices. Her findings: an exact or close price match occurred only 20.5 percent of the time. “Posted prices generally don’t match what patients pay,” she writes, arguing that stronger legislation is needed.
Ho is urging the full committee to adopt key provisions from the bipartisan Patients Deserve Price Tags Act. That measure would require all providers and insurers to publish monthly price disclosures—including negotiated rates—for every service, backed by a senior executive’s attestation of accuracy and stiff penalties for noncompliance.
The current bill, which recently cleared a subcommittee, mostly codifies the status quo, Ho says. She points to a persistent information asymmetry: Without transparent prices, hospitals and insurers can charge nearly whatever they want, while middlemen take hidden cuts that drive costs higher. The U.S. now spends $5.7 trillion annually on healthcare, or 18.4 percent of GDP—double the developed-world average. Research suggests 25 percent of that is waste, fraud, or overcharges.
Ho co-signed a letter with 40 economists estimating that system-wide price transparency could save more than $1 trillion a year. Those savings, she argues, could be redirected from “healthcare bloat and profiteering” into the productive private economy, including workers’ wages and business earnings. Her research shows that lowering annual premiums by just $1,373 per employee can boost retail business profitability by 12.4 percent.
Transparency also allows employers to spot wide price variations—nearly 200 percent within the same market for the same care. Some companies are already using price disclosures to cut costs. A recent Bloomberg Government piece highlighted one firm that saved roughly $3.5 million on an orthopedic services contract by comparing rates. Broader transparency could democratize such savings for the 180 million Americans covered by employer-sponsored insurance.
Ho calls on lawmakers to require hospitals and insurers to provide consumers with tools to make sense of price disclosures, which are often buried in formulas, algorithms, or fee schedules. She also wants itemized bills so patients can compare them against posted prices to detect overcharges, double-billing, errors, or fraud.
Without these provisions, Ho warns, the market will continue to fail. “Economists have long understood that markets act best when buyers and sellers have access to accurate information,” she writes. “When prices are hidden, as they are in healthcare, markets break down and rent-seeking proliferates.”
Price transparency has become a rare bipartisan issue, even as other health policy debates remain gridlocked. The debate also echoes broader calls for government accountability, such as the push for transparency in lawmaker health disclosures after recent high-profile absences. Meanwhile, the rapid adoption of artificial intelligence is outpacing policy, creating new strains on infrastructure and energy—another area where policymakers are scrambling to keep up.
By incorporating the Patients Deserve Price Tags Act, Ho argues, Congress can deliver a pro-consumer healthcare marketplace that significantly reduces costs at both the micro and macro levels—a “rare, bipartisan win for the American public.”
