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Healthcare Transparency and Competition

Healthcare Transparency CompetitionHealthcare costs in the US continue to increase substantially. Spending on healthcare has gone from 5% of the total economy in 1960 to 18% today or about $12,900 per person. There is some bipartisan agreement that one important reason for increasing healthcare costs is a lack of transparency about the true costs and prices of various products and services. Without knowing the price, and the actual costs behind those prices, patients and insurance providers don’t have an option to shop for more cost-effective services.A second point on which many agree is that increasing consolidation in the healthcare industry is contributing to increasing costs because it also reduces competition. For example, hospitals and physician practices are under increasing pressure to join larger hospital systems.

Proposals to bring down healthcare costs by addressing these problems include:

  • Require Greater Price and Cost Transparency—Invest in greater enforcement of existing transparency laws and/or develop additional requirements
  • Enhance Anti-Trust Measures—Require and fund greater enforcement of existing anti-trust laws and/or develop additional requirements
  • Improve the Cost Savings from Pharmacy Benefit Managers (PBMs)—Require and enforce greater PBM transparency. PBMs were established to bring down the costs of prescription drugs but have been disappointing in practice. This is in part due to the deals they have with drug companies that frequently aren’t disclosed.
Congressional Rank: 9th
(7.3 Average Rank across participating congressional offices)