{"id":7307,"date":"2023-07-06T09:41:00","date_gmt":"2023-07-06T13:41:00","guid":{"rendered":"https:\/\/chirblog.org\/?p=7307"},"modified":"2023-07-05T10:47:29","modified_gmt":"2023-07-05T14:47:29","slug":"can-employer-sponsored-insurance-be-saved-a-review-of-policy-options-price-transparency","status":"publish","type":"post","link":"https:\/\/chirblog.org\/can-employer-sponsored-insurance-be-saved-a-review-of-policy-options-price-transparency\/","title":{"rendered":"Can Employer-Sponsored Insurance Be Saved? A Review of Policy Options: Price Transparency"},"content":{"rendered":"\n

By Sabrina Corlette and Maanasa Kona<\/em><\/p>\n\n\n\n

Employer-sponsored insurance (ESI) provides critical coverage for 160 million Americans. However, the generosity of many of these plans is in decline, leaving many workers and their families with high out-of-pocket costs, relative to their income. Employers acting alone will not be able to reverse this decline. Policy change is needed, but assessing what policies will work is challenging. In this series for CHIRblog, we assess proposed policy options designed to improve the affordability of ESI, the state of the evidence supporting or refuting the proposed policy, and opportunities for adoption. In the <\/em>first<\/em><\/a> of the series, we reviewed the primary drivers of the erosion occurring in ESI and identified three recognized policy options to improve affordability: regulating provider prices, reducing anti-competitive behavior, and improving price transparency. The <\/em>second<\/em><\/a> blog in our series assessed the evidence for direct and indirect regulation of provider prices and options for policymakers. The <\/em>third<\/em><\/a> post in our series explored policy options to limit provider consolidation and anti-competitive behavior. This, the fourth and final post, reviews the promise of price transparency as a tool to understand what is driving health care cost growth and target strategies to constrain it.<\/em><\/p>\n\n\n\n

Millions of workers are struggling with the affordability of their employer-based coverage, a problem stemming primarily from the high and rising prices<\/a> that hospitals, physicians, and prescription drug manufacturers charge for health care goods and services. The high level of provider consolidation is a key factor in those high prices, but the problem is exacerbated by the fact that most employers have little to no access to data on the prices they are paying, the relationship of prices to the actual costs of delivering care, or whether or not the prices being charged are correlated with higher quality or better patient outcomes. This can lead to what the U.S. Congressional Budget Office calls a \u201clack of sensitivity<\/a>\u201d to high prices.<\/p>\n\n\n\n

Employers largely rely on outside vendors or insurers to administer health benefits. Even when the employer self-funds<\/a> their plan, it is generally a third-party administrator (TPA) that designs and manages the provider network, provides customer service, and processes medical claims. As such, these TPAs control access to data on the prices they pay for health care goods and services and enrollee utilization. Until recently, many of these TPAs considered that data to be a trade secret and refused to share it with their employer clients, even though it is the employer who is the plan fiduciary<\/a> and ultimately responsible for spending under the plan.<\/p>\n\n\n\n

In this context, federal and state policymakers have advanced policies designed to improve employers\u2019 access to and use of health plan data, including the prices that TPAs negotiate with providers and the claims they pay on the plan\u2019s behalf. There are several primary benefits to greater price transparency, including:<\/p>\n\n\n\n