The fight for transparent health care prices in America

Although hospitals are required by law to post their prices online, only about 36% of hospitals are fully complying.

Congress and now even employers and unions are demanding that changes.

Today, On Point: The fight for transparent health care prices in America.

Cynthia Fisher, founder and chairman of PatientRightsAdvocate.org, a nonprofit organization seeking health care price transparency in the U.S.

Molly Smith, group vice president for public policy at the American Hospital Association.

Kevin Lyons, director of member benefits for the New Jersey State Policemen's Benevolent Association.

Zachary Bessler, software engineer and chief technology officer.

Jeff Millhollin, president and CEO of Pacific Steel & Recycling.

Adam Beck, senior vice president for commercial employer and product policy at America’s Health Insurance Plans.

Part I

MEGHNA CHAKRABARTI: On June 24, 2019, cancer survivor Erica Jay visited the White House. She was there to tell her story.

ERICA JAY: Over the last three and a half years, while fighting a stage three cancer, we visited many health care facilities. We saw price variations that just caught us off guard, really surprised us from one facility to the next, and it caused us financial hardship.

CHAKRABARTI: Erica was there in support of an executive order signed that day by then-President Donald Trump.

JAY: An example of this is when I had two identical bone biopsy procedures only 11 days apart, at facilities that were only 17 miles apart from each other. We learned when we received the bills for the second procedure that it cost us more than 330% than the first time we had it done. Different facility, identical procedure, drastically different pricing.

CHAKRABARTI: It was this kind of price shock that Trump's Executive Order was designed to avoid. Improving Price and Quality Transparency in American Healthcare To Put Patients First order directed the Department of Health and Human Services to issue a new rule that mandates hospitals reveal the price of procedures in a patient-friendly format, Atlanta-based physician Elaina George was also at the signing. She hoped the new rule would transform American health care, the most expensive in the world.

ELAINA GEORGE: I've had patients deny themselves care because they don't know how much a service will cost. I have felt powerless at times because of my inability to help them, especially if I have to send them to a hospital and we can't find out the price of the service. Price transparency is the solution to this problem. When patients become health care consumers, it will drive prices down, quality up. And most importantly, help doctors serve their patients better.

CHAKRABARTI: Four and a half years later --

GONZALO AGUANA: I was trying to find the price for an MRI procedure that I had to do on the shoulder. Impossible to find a straightforward price.

CHAKRABARTI: Gonzalo Aguana lives in Miami. He recently searched in vain on two Miami area Hospital websites for that straightforward patient-friendly pricing that had been mandated by Trump's Executive order. Aguana ended up having to call both hospitals to get the insurance codes for the MRI, so that he could tell his health insurer the code in order for them to tell him what he'd have to pay for the procedure.

AGUANA: So all this took me a week, really frustrating calls back and forth, probably three or four times to each hospital. What I can see is that it's not transparent at all.

CHAKRABARTI: This is On Point. I'm Meghna Chakrabarti, the American Hospital Association, an industry group that represents more than 5,000 hospitals across the country acknowledges that in 2021, a couple of years after Trump's order, barely a quarter of hospitals had complied with the Trump price transparency rules, that number rose to 70% in 2022, but two things have not yet come to pass. American patients are no more empowered to negotiate from the gurney, as some analysts put it, and health care costs have not come down. So now both large employers and Congress are getting fed up. Late last year, the house overwhelmingly passed the bipartisan Lower Prices, More Transparency Act.

It's pending in the Senate currently. Will it make a difference? Will more transparency finally lead to lower prices? Or does this market-based consumer approach miss something fundamental about the American health care system? Let's start today with Cynthia Fisher. She's founder and chairman of PatientsRightsAdvocate.org.

It's an advocacy group pushing for more transparency in healthcare, and she joins us today here in the On Point Studio. Welcome to the show.

CYNTHIA FISHER: Thank you, Meghna. It's pleasure to be here.

CHAKRABARTI: So first describe to me ideally what hospitals are supposed to have easily available on their website. What is a hospital charge sheet supposed to look like in the eyes of the federal government and particularly the Center for Medicare and Medicaid Services?

FISHER: Yes, as of January 1, 2021, now over three years, all hospitals across the country are to post all actual prices online by every procedure and every code that they offer. And compared by every single insurance carrier that they've negotiated prices with, as well as the discounted cash price.

Why is that? There is wide price variation in the same hospitals for the same services based upon what insurance carrier different people have. So the incredible thing is that these hospitals are to post all prices online across every payer and every plan, and the discounted cash price. And yet today we still only see around 36% of the nation's hospitals fully complying with that law.

CHAKRABARTI: Fully complying.

FISHER: Fully complying.

CHAKRABARTI: So I want to learn a little bit more about what full compliance looks like. So when you said they're supposed to, hospitals are supposed to post information about every code, every medical code, and the procedure associated with that. And then, as you said, the prices negotiated with various insurers.

So is that a giant spreadsheet or what is it?

FISHER: Yes, it's a giant spreadsheet. And when you look at comparisons of these prices, the whole purpose of having all of these actual prices is to allow a tech economy to be able to parse this data and put these prices comparatively in easy shopping tools online.

However, without full compliance, that means seeing all of the actual prices that have been negotiated. Then it's hard for any of these tech developers to show actually the comparative prices. Insurance companies as well are to provide all of their actual prices that they've negotiated with hospitals and any other provider, like a physical therapist or an imaging center, etc.

So these prices are to be available and to the public so that we can start to see, think about it. We could start to see the airlines comparative prices, where, think about it, when the airlines started posting their prices and it became consumer evident. You change the industry of travel. It used to be hidden behind the screen of a travel agent.

And the travel agent got 15% commission, so they weren't motivated to give you the best prices. Now today, we all shop online, and we trust the prices to be true on what we're going to be getting billed. And we choose whether we're going to have a direct or a non-stop flight and what price we know we can pay.

And guess what? Since the '70s, since prices became transparent, airline prices in real dollars are half the price that they were, and hundreds of millions of people are able to have broad access and be able to fly.

CHAKRABARTI: Huh. In real dollars. That's the important thing, right? Because I think people would often say that they don't feel like prices have actually gone down for airlines.

I won't let myself get distracted, because airline pricing has its own set of major issues now, with the consolidation of the various carriers and dynamic pricing, et cetera. But your point is well taken. I'm still trying to visualize in my mind what this is supposed to look like, because there are thousands and thousands of procedure codes for, you name it, for any hospital.

And then in addition, say someone, their insurer is Blue Cross, major insurer in states across the country. But Blue Cross has various types of insurance depending on the employer that it's working with. Is that supposed to be also transparent?

FISHER: Yes. All of this data is supposed to be transparent, and the real issue here is that employers and unions design health plans for their workers to be able to save their money and be able to provide the best care at the best possible price. But if you don't know the prices, hospitals and insurance companies can charge whatever they want. And so if you think about it, price transparency is truly transformative. Because it shifts the power to the patient consumer, and to the employers and the unions that help purchase insurance coverage for their workers and their families.

And so if you see the prices for the first time, this is a tremendous movement to be able to empower the employers and unions to be able to see where can they get care and what are the comparative prices when they look at what that insurance carrier is delivering for them. And let me share with you the great reveal. Since the price transparency laws have come into play. We looked at a hundred hospitals across the country, 10 in each state in 10 states, and we found that the prices varied by 10 times in the same hospital, for the same procedure, based upon what insurance carrier the patient had. Can you imagine? Why should any woman pay $60,000 for a C-section when another plan gets coverage for $6,000?

CHAKRABARTI: 10 times.

FISHER: 10 times. And what we're also finding is across the state comparing hospitals to one another, we saw a 33 times difference. 33 times in the price variation for the same procedures, whether it be an MRI or a colonoscopy or common procedures that one would look to be getting the same quality of care. at a far higher price.

CHAKRABARTI: We're gonna hear from a representative from the American Hospital Association leader, and I imagine that they have a lot of reasons from the hospital's point of view to have that locality to a locality difference in prices, different patient population, et cetera.

We'll hear from that. You're shaking your head, but we'll hear from that and you can respond to that. But these are supposed to be in machine-readable formats and in patient friendly format, right? All of this transparent information. Well, On Point listener Markus Franz in New Mexico has a story about that.

He says, when his wife was told she needed to have open heart surgery, he tried looking up what it would cost, and here's what he found.

MARKUS FRANZ: Was able to find a pricing chart for the hospital. But trying to read it is a whole other challenge. Because not only do you have, was it difficult to find the procedure, but then based off your insurance, the costs change.

And then that doesn't even cover all the other information that you need, like the tests and the hospital stay that she's going to have to have for a couple days afterwards. So while I may have an idea of what the procedure costs, that doesn't give me an idea of what all of the costs are going to be for the hospital stay and the whole process.

CHAKRABARTI: So we've got about 30 seconds before our first break. Cynthia. It seems like there's a lot of websites where the information is there, but it's not useful for people. What is the cost of non-compliance here? Isn't there a fine that hospitals would have to pay?

FISHER: Yes. The Biden administration increased the fine to up to $2 million per hospital and unfortunately only 14 hospitals have been fined, two over a million dollars, and they immediately came into compliance. But enforcement has been weak and unfortunately many of the hospitals are still flouting the law.

Part II

CHAKRABARTI: Cynthia, I want to talk for a minute or two about the current efforts to not only get 100% of the hospitals in compliance, but even push the transparency concept forward. I mentioned at the top of the show that a proposal did pass in the house late last year. There's one, a similar one pending in the Senate. What do these new bills aim to do? How do they aim to further increase transparency in hospital costs?

FISHER: Yes. This is a 94% issue. Where 94% percent of Americans across this country want to know prices in health care to lower their costs. Because they want to be able to be well-informed about their health decisions before they get their care. And also, when they get their bills, to know if they've been appropriately or accurately charged and not overcharged.

And unfortunately, nearly everyone has a story in their family of being overcharged by the health care system, prices that they'd never expected to have to pay. And every bill is a surprise if you don't know the price. So the good news is that the house bipartisan did pass.

CHAKRABARTI: Overwhelmingly.

FISHER: Overwhelmingly, to lower the cost through price transparency.

And now the Senate has even a better bill that ensures all prices, actual prices get revealed by all hospitals and insurance companies and has issued strong enforcement measures to make sure they come into compliance. And then furthermore, it is so union and employer and worker friendly to get access to all of these prices and to the billing information that we need. To have true accountability and integrity in our medical billing.

That they are indeed true prices and indeed accurate charges.

CHAKRABARTI: So the Lower Cost, More Transparency Act, it does a lot of things that you outlined. Some of them are very pointed, right? Like for example, hospitals don't just have to disclose their prices if this bill were made into law, but they would actually require insurance companies to show patients what they would actually pay before those patients receive their care.

Is that not already a practice amongst many insurers?

FISHER: No. In fact, insurers may give estimates, but estimates aren't real prices and have no accountability. So the reality is that having prices and financial certainty before we get care let's any one of us, any consumer be able to know where they can get an MRI for $300 versus paying over $7,400 in a hospital system.

So when you can save that kind of money, you as an individual can save from your out-of-pocket or your deductible. But also, as a collective for all the workers that share in an employer plan or union plan. You can imagine when the employer's able to show or steer and point to where price efficient quality care can be achieved, then it lowers the cost of care for everyone under that plan, with that company or organization and those savings go straight into savings into the workers' paycheck.

CHAKRABARTI: Got it.

FISHER: And to the business's budget or corporate earnings.

CHAKRABARTI: One more thing about the proposals in Congress right now. On the Senate side, the proposal is called the Health Care Price Transparency Act 2.0, Senate bill 3548. But this one in particular addresses the needs of employers, which I think is very interesting because it's taken me forever to understand why employers haven't been more vocal about the cost they're paying to cover their employees. But one of the things the bill would require is employers could access claims data through a daily data transaction set. So essentially, they would be able to download every day the prices that they're paying for health care for their employees and monitor it like seemingly almost in real time.

Can you tell me a little bit more about why employers now are getting more active in the advocacy here. Because they're even sending, an employer union is sending a major letter to congress to get the senate bill passed.

FISHER: Yes, we saw that letter. And the letter is from the employer unions, like the National Order of Police and Teachers Unions as well as employers across the country.

There are 75 employers on that letter. Asking the Senate to please put this language into law and support it. 75 employers representing over 21 million workers and their families. So if you look at their families and their plan, that's about 55 million people that have coverage under those worker and union plans.

That's huge. Coming forward, saying we need access to all actual prices in this Senate bill, and access in this daily feed of the actual billing and claims. Why is this so exciting and transformative? Is it providing just like we have in any other industry, financial transaction accountability and empowers the employer and unions to be in control of the checkbook. Right now, without access to those claims, they rely on third-party middle players, which are big insurance companies, essentially.

To pay their bills without even seeing what the bills are.

CHAKRABARTI: Yeah.

FISHER: Therefore, when you can see these prices and control the checkbook before you pay the bills, just like we do when we purchase anything else in our economy, we get the price, we agree to a price, and then we get the billing statement. We make sure it's accurate to the prices that we agreed to pay.

So when the employers can have control of that checkbook, make sure that those bills are indeed true or accountable. It prevents them from paying any overcharges or improper payments up front. And today, that's not the case. Because so many employers are finding with just a small handful of claims that they can audit, that they are being overcharged.

And having improper payments by those third parties when they compare it to the actual prices.

CHAKRABARTI: And the employer's role here is important. Particularly in the United States where most people get their health care, who have health insurance, it comes through their employers, on at least 160 million Americans.

So I want to share an example of some of the challenge employers, or unions I should say, that these groups have had in accessing the kind of care information about health care that you're talking about. So here's the example. It is the New Jersey State Policeman's Benevolent Association.

They're a union that represents about 30,000 active law enforcement officers in New Jersey and about 10,000 retirees. Now, back in 2011, the state of New Jersey passed a law called Chapter 78 that requires all state employees to pay up to 35% of the cost of their health care premiums.

Prior to that, New Jersey municipalities paid for health benefits. So the Policeman's Union in this case didn't pay much attention to health care costs before 2011. Now they had to. What they found --

KEVIN LYONS: What we see is disgusting, frankly. It's scattered with waste of abuse and fraud. It's all over.

Every level of health care is just fleecing our members, and we really still are challenged in getting data and changing things because the lobbyists for the hospitals and the insurers, it's so strong.

CHAKRABARTI: This is Kevin Lyons. He's the union's Director of Member Benefits, and he says prior to 2011, union members paid nothing for their health care, for the reasons we mentioned earlier, but that number has risen to $15,000 per member per year now. And given that Lyons is working hard to bring those costs down, but a major obstacle lies in the way. He says it's extremely difficult for the union to get information from hospitals and insurers.

LYONS: So for us to figure out how to make a decent plan design change, we have to know what it costs. I think that's a pretty reasonable request. And see if we're getting value at end quality. I've been told in open meetings by the third-party administrator for the state that we can't tell you what that costs.

It's proprietary. And when I do put data requests in through the state, more often than not it's the insurers fighting it, fighting the data requests being granted.

CHAKRABARTI: Lyons says he has requests for claims data that go as far back as three years at this point. Now, hospitals, as we mentioned, are required by federal law to post prices of their procedures and services online.

But again, Lyons says there's a difference between posting information and posting useful information.

LYONS: I challenge anybody to read it. I looked at one hospital yesterday. It was 141,000 lines of data. No layperson can figure that out. They'd have to have the CPT codes.

They'd have to know what they're looking at. I can barely read it. So it's just not, it's not user-friendly for the common person.

CHAKRABARTI: Lyons hopes that Congress can force hospitals and insurers to release their pricing data so his members can shop around and save. We, as the labor leader, should be able to direct our members to high quality, fair cost, I'm not even going to say low-cost facilities.

LYONS: We can't get the data to do that. We want real access to data. We want to know what things cost before we go to 'em. We think they should disclose the prices before. We don't want estimates because estimates are never accurate.

CHAKRABARTI: So that was Kevin Lyons, he's Director of Member Benefits for the New Jersey State Policeman's Benevolent Association.

Cynthia, hang on here for a second because obviously there are other major groups involved in this transparency challenge. We've mentioned insurers. Hospitals. So let's turn now to Molly Smith, whose group Vice President for Public Policy at the American Hospital Association. And again, that's an industry group that represents some 5,000 hospitals across the country.

Molly, welcome to On Point.

MOLLY SMITH: Great. Thank you so much for having me.

CHAKRABARTI: What do you see are the remaining significant obstacles from the hospital's point of view in making available the kind of user-friendly, comprehensive transparency data that has been required since 2019, and then the rules were more firmly set by CMS in 2021.

Why can't hospitals completely comply now?

SMITH: Yeah, so I'd like to start by first reiterating very firmly that hospitals and health systems are really committed to making sure that patients have all of the information that they need when planning for their care, and that includes all of the information about the potential cost of that care.

And frankly, we really do point to the numbers that the federal government has put out in terms of compliance with the rule. The federal government sets these rules and they're really the only ones who can adjudicate compliance, and they have found that more than 70% of hospitals are in compliance with all parts of the rule.

But the part of the rule that we've really been talking about in this conversation, which has to do with these machine readable files, publicly posting of negotiated rates. Two years ago, the government found that more than 80% of hospitals had those files. But I think what we're continuing to hear is that regardless of that, patients, consumers, employers are still really struggling to understand what their costs are going to be.

And hospitals are very sympathetic and trying to work to do their part to improve transparency here. But there really is no silver bullet. So I really do hope that as we have this conversation, we can move beyond the public posting of millions and millions of data points that are very difficult to navigate through it and really focus on what is it that actually patients, consumers, employers need, and how do we get there?

CHAKRABARTI: Yeah. The point well taken because the complexity of the American health care system is legendary, to put it lightly. But the idea, the thrust of both executive order and the bills that are pending in Congress is that in the 21st century in the United States, look, if Amazon can do what Amazon can do, we should be able to find a better way to make, to inform health care, to inform American patients about what they're going to pay for the procedures that they need to save their lives in hospitals.

So again, where do you think the block is? Where's the hurdle for hospitals? Is it in getting the information all in one place? Is it in providing it to insurers? I keep thinking of Kevin Lyons from the Policeman's Association in New Jersey, who said, I've been waiting three years for some of these requests to be fulfilled.

Why? Why is that Molly?

SMITH: Yeah, so I think that bringing in the insurers is a really key component of this, because hospitals do not just set prices. For the vast majority of patients who they see, more than 90% of patients who are cared for in hospitals have some form of health care coverage. And it is really that health care coverage that determines what their costs are going to be for a particular service. So we really need to marry up both the costs that the hospital is incurring to offer that care, as well as the coverage.

And frankly, what we see as the real solution here is making sure that everybody is in some form of comprehensive health care coverage. Frankly, health care is simply too expensive for any individual to pay for on their own. This is why we have an insurance model so that we can pool costs. So we need to make sure that everybody is in some form of comprehensive coverage, and then we need to make sure that the cost sharing that is part of that coverage.

So whether it's copays or deductibles, that they make sense and that they're affordable. The real challenge that we're facing right now is that we are in an environment where many people are now in health plans that have deductibles in particular, that are just way too expensive for them, many thousands of dollars, and that a lot of that amount that they owe within that deductible cannot be determined until after their care is finished.

That's called co-insurance. This system is not very consumer friendly. So from our perspective, we really need to make sure I'm getting those cost sharing amounts down and we need to make them simpler to navigate, more upfront cost sharing. So flat co-pays that people understand going in. Doing away with co-insurance so that you don't have to wait until after the care is finished to figure out what you owe.

We really think that is where the crux of the solution should be.

CHAKRABARTI: Yeah, look, health care in America consumes 20% of our GDP. There's no question that it's too expensive and our health outcomes are not on par with peer nations. But short of having health care for all, essentially, like universal care in this country, what we have is a market-based system.

And the idea in a market-based system is that price transparency helps drive changes, consumer-friendly changes in a market. Right? And I'm thinking back to what Cynthia said earlier about once you dig, do dig through the data. Once you do get further information about costs, you find that in some, in many hospitals, there's such a wide variety in pricing for identical procedures.

10 times in some, 30 times even a spread of costs. Is there not, given that fact, isn't there some disincentive for hospitals to be as transparent as possible? Because when consumers don't know that they may be paying way more than their neighbor, they can't advocate for change. They can't push a market in a more cost-friendly direction, Molly?

SMITH: But I think that we're looking at the wrong sort of actor in this scenario, we're really talking about the insurer and the hospital negotiating on these prices. Now, if an insurer and a hospital are negotiating on prices and that within an individual's health plan, they have, let's say, three or four different hospitals that they can choose from, that is part of their network, there still may be a reason why one hospital may have a lower cost for a certain service and they can still choose to go, and the insurer can provide information.

The hospitals can provide information and patients can make that choice. But at the end of the day, the negotiation there is really with the insurer, and we should be focused on really simplifying the copay experience for the patient.

Part III

CHAKRABARTI: Cynthia, before the break we were listening to Molly Smith from the American Hospital Association, and repeatedly she pointed to insurers as the obstacle for greater price transparency. That was what she went back to over and over again in terms of where we should look for solutions. It's quite interesting, because we also talked to America's insurance companies through the America's Health Insurance plans. It's a group called AHIP. It's a trade association for health insurance companies. Adam Beck is the senior vice president for commercial employer and product policy there, and he said that America's insurers support more transparency in pricing.

But when it comes to transparency and high health care cost, AHIP, the group, they're the ones who blame the hospitals.

ADAM BECK: We've seen that what hospitals are charging seldom make any sense. We see prices that are inflated. They're irrational and they're inconsistent.

What they charge one employer versus another, what they charge one health plan versus another. Our hope with this increased transparency, both on the payer side as well as on the provider side, such as from hospitals, is that we are going to, down the road, see hospitals face market pressure to rein in those prices that actually charge something that's both more consistent and more related to the actual cost of providing that care.

CHAKRABARTI: So how do we resolve this, Cynthia? The hospitals blame the insurers saying they're the ones negotiating prices. They decide how much they're going to pass on to employers and individuals. The insurers blame the hospitals saying they're charging whatever they want. How do we resolve this?

FISHER: If you think about it, they're in it together because as long as hospitals and insurance companies hide their prices. Both can charge whatever they want, and they are. In fact, let's not forget Meghna, that several years ago when the Trump administration rules came out using the Affordable Care Act to make sure all prices were shown for all patients and employers, what happened?

The very American Hospital Association sued to keep prices secret. And tried to use the first amendment of freedom of speech in the courts to keep prices hidden from patients. And the same went with the insurers, but they ended up dropping their case later. And the consumers won in the courts. We won in the lower courts, and we won in the upper courts to have the right to know all prices in health care.

When the administration was sued, the hospitals lost. Here we are today, where both the hospitals and insurance companies are making things unnecessarily complicated. There are many entities that they both own and create to capitalize on a patient's misfortune. And price transparency is revolutionary.

Why? Because it pulls back the curtain and it shifts the power to the patient, consumer, and to employers and unions to be able to see the prices and have the power up front to choose the best quality of care at the lowest possible price, and then to also utilize prices. To make sure bills are accountable and have integrity in the billing practices.

Like I said, it's moving the power of that checkbook control to the employer and union plan up front so that they prevent being overcharged or fraudulently or erroneously billed.

CHAKRABARTI: I want to come back to that thought because it's really important in just a second, but the means by which players in this system of ours have tried to make it more difficult to find information.

And sometimes it's pretty creative, I'll say. Because back in 2019 an  On Point listener actually named Zachary Bessler was working for a tech company that designed hospital websites where patients and insurers were supposed to be able to find that transparent information that we were talking about.

And he told us that he was laid off by the company during the pandemic. Not surprising, millions of Americans were. And when he was laid off though, he had to sign a non-disclosure agreement. However, what he did say to us is that the company that he worked for had thousands of hospitals as clients.

BESSLER: I don't think we built the search functionality and there's like thousands of rows in this database.

And so it's like you're paging through stuff trying to look for it. I don't remember how we sorted it, but it was just like at every turn, we just made it harder to use. Normally when you're building, I've been building web apps for a long time now. Your goal is to make it as easy as possible for the user.

You want users to come in and use your thing, and that was just like the entire opposite of what we were doing here.

CHAKRABARTI: It was opposite, not by accident, because as Bessler said, designing user-friendly tools, even for something as complicated as hospital pricing was absolutely something they could do, but it's not what their hospital clients wanted.

BESSLER: You're the hospital, you're not going to be like, "Hey we're going to buy that one, that makes it really easy for us to lose money. We're going to spend money so that we can't charge as much." That's just not what, they're not going to do that. So no one's gonna build that.

CHAKRABARTI: So that's Zachary Bessler from Corvallis, Oregon, giving a little bit of insight into the back-end process even of making this information more available.

Now, Cynthia over and over again, we've heard that the idea is that with greater transparency, you called it a game changer that puts more power in the hands of individuals and employers and unions. I just want to clarify that a little. Because, honestly, I'm not sure how much power it puts in the hands of individuals, right?

Because you or I, we don't have the wherewithal to negotiate prices, but the real focus is on employers and unions. Isn't it? The ones who are buying the insurance for their employees and members, it gives them greater power.

FISHER: Absolutely. It actually helps all of us.

And if you think about it, with 160 million covered lives being from the workforce environment, the employers and unions can be the army to drive down the cost of health care by designing plans that show where you can get a colonoscopy for $700 in an office by the same physician, rather than paying over $4,000 in the hospital surgical suite.

And so when you have the same quality of care, that can be determined where you can get that best price, and that's in your group health plan, then it allows all of these upfront to drive down the cost, but also have integrity in the billing. But the reality is, Meghna, that also drives for these hospitals and insurance companies to stop creating very unnecessarily complicated data files and preventing the tech industry from providing us simple mobile apps and shopping tools or billing accuracy tools. As consumers, we know it can be done. Like you said, there's Amazon, there's Uber, all of these things. Imagine if you could get like an Uber platform, where could you get an MRI within the next three hours?

And have it be, and you'd be willing to drive 45 minutes to get the best price MRI and let the hospital and the insurance and the independent imaging centers bid on our business. All of those tools exist. It's just that they're flouting the law to prevent us from getting the ability to have control, to drive down these prices.

CHAKRABARTI: Can I just jump in here for a second? Because I think that it's also important to note that some insurers, sorry. Some employers, especially some big ones, are so frustrated in the difficulty in getting this data.

They're even bringing lawsuits against, I guess against insurers and hospitals to get this pricing data.

Is that correct?

FISHER: Absolutely. In fact, Kraft Heinz just sued Aetna ... in finding overcharges, looking back at the past six years and trying to get access to all of their claims data so they can see all of it. Aramark just sued also for their insurer, and then we saw the sheet metal workers and the carpenters in Connecticut sue Blue Cross because when they looked at Yale, New Haven and Hartford Connecticut's hospital pricing files, they were only allowed to have a small subset from Blue Cross for looking at an audit, and they found that they were way overcharged and that those overcharges were coming right out of the shared amount from the union members paychecks.

Why do we have now this movement where employers and unions are writing into Congress to pass this Senate bill and give them the right to access to the information they need, is because they have been fighting to get access to these data and the prices for billings so that they know they can be accountable and lower their costs for all of their members.

And what unions have been able to benefit is SEIU 32BJ in New Jersey, 200,000 workers in New Jersey and New York, they got access to their claims data over three years ago. When they looked at their plan, they found one particular hospital, was New York Presbyterian was way overcharging their members.

They tried to negotiate to lower costs for their services. New York [Presbyterian] did not come to the table, so they carved them out of their plan. Within one year for 200,000 members, they saved $33 million dollars. This is now the third year, and they're at over $100 million dollars in savings.

What did they do? They gave a $3,000 bonus to all 200,000 workers, and they gave the highest raise in the history of their organization.

CHAKRABARTI: Wow. So we are talking about lawsuits being brought by companies to get this information, action perhaps in congress, bills pending there. And now I just want to share a story about some of the links that other employers have gone to capture those savings with greater transparency.

Okay. So this is Jeff Millhollin, he's president and CEO of Pacific Steel & Recycling. Which is headquartered in Great Falls, Montana. They've got about 900 employees. And every year, Pacific Steel spends millions of dollars on costs.

JEFF MILLHOLLIN: Probably around 2005 or '06, where we were fully insured with Blue Cross Blue Shield at the time, and the costs every year just kept going, up and up.

And there was just, seemed to be no end in sight of where they were headed.

CHAKRABARTI: So as you can imagine, the costs were becoming unsustainable. In 2013 though, Pacific Steel & Recycling made a radical decision, they became 100% self-insured, meaning the company dropped its traditional insurer and provider networks, and instead began negotiating prices directly with medical providers and paying them directly, too. Now in order to do that, they first had to figure out what medical services cost. Information that had previously been handled by their old insurer.

MILLHOLLIN: We found out we were getting charged anywhere from 200% of Medicare to 2,000% of Medicare. Pricing was just all over the board and totally unpredictable and no rhyme or reason to it.

CHAKRABARTI: So that year, Millhollin met with several hospital CEOs and CFOs.

MILLHOLLIN: So we went, we took Medicare. And went, started going to facilities and providers and saying, "Look, we know you can't survive on Medicare, but we can't survive getting charged five- or 10-times Medicare. So somewhere we need to reach an agreement where you can survive, and we can survive."

And we started with our kind of gut feeling was let's offer 160% of Medicare. Where we ended up landing is probably closer to about 220% of Medicare, but it's a heck of a lot better than five times.

CHAKRABARTI: Now, those negotiations weren't easy. It took a lot of convincing, but Millhollin did successfully negotiate with many providers without damaging reductions to his employees' benefits.

More importantly, they saved a ton of money.

MILLHOLLIN: In 2013, we were paying $812 per employee per month for health care. And it had been just rising steadily ever since then. At the end of 2022, we were paying $581 per employee per month. If you look at where PPO's trended, if we'd have stayed in network and doing what we're doing, the trend line says we'd be around $1,300 per employee per month.

Today, where we're at under $600, the way we've got it figure, we're saving $6.5 million, $7 million a year right now.

CHAKRABARTI: So the other note that Jeff makes to us is that Pacific Steel & Recycling is 100% employee owned. So he says that might've made it easier to sell. The idea to them of becoming entirely self-insured perhaps would be a harder sell for businesses that aren't entirely employee-owned. But Cynthia in the last few minutes that we have, it does seem that we have this coalescing now of even more groups becoming deeply interested in wanting much greater transparency in health care and hospital pricing. It's quite a change from 10 years ago, I would say, but ultimately, this is all still operating in a for-profit health care system.

These are important, but efforts on the edges of what is the core problem in the United States, because there are many people in this country who even if they wanted to, they couldn't shop around. Because they've got their employer and they've got one hospital in maybe, in their whole county.

Does this just again, nip at the edges of the core problem, which is there's no consistency across this country because we do have a private for-profit healthcare system.

FISHER: Meghna, you raise a really great point. The reality though is that we have a dysfunctional for-profit and not-for-profit — hospitals and insurers are also not-for-profit — health care system, and it's dysfunctional. Because the consumer and the employer and the unions are the true purchasers of all health care, and the purchasers have been blind to no prices, blindsided by outrageous overcharges, and every time we get care, we are to sign a blank check.

Price transparency disrupts all of that, because the hospitals in the insurance industry have been able to keep all of us in the dark. They have been able to charge whatever they want. But price transparency allows the market to function, because it allows all of us to see prices and price competition.

And then the next question is what am I going to get for that price? So price discovery ushers in quality transparency, and it is up to us as the consumers to demand access to all of these prices upfront. And before we pay our bills and to withhold payment, unless we know those are the prices we chose to accept with the financial certainty, we are empowered to have and to lower all of our costs across the entire system. This is the beginning.