The CORRelations post from the Practical Economics section, Recent Price Transparency Bill: What are the Impacts?, has many implications we all need to consider. Note that the Lower Costs, More Transparency Act (LCMTA) requires hospitals to publish pricing for “shoppable services.” This bill would mandate hospitals make their prices for services known to the public. It’s important to readers of CORRelations to know that in its current iteration, it does not apply to physician-owned ancillary services.
Even so, this bill has tremendous implications for efficient, competitive practices. Knowing the costs of hospital services in the markets where your practice competes — things like surgery center, MRI, therapy, and radiology charges — would represent a tremendous competitive advantage.
A savvy private practice would be able to, and wherever possible should, adjust its pricing based on these data, if this bill becomes law. While the intent of the bill is to increase transparency for patients, the unintended consequence of this legislation remains to be seen, and may tip in favor of non-hospital-based practices, which is to say, many readers of this newsletter.
I can only imagine that the American Hospital Association will scream foul if this bill advances to the floor of the legislature, suggesting that its members would been disadvantaged by its passing.