The TaxWatch Research Blog

The TaxWatch Research Blog is a forum where our research staff can address topics and issues in a short format. Keep an eye on this space during Legislative Session for frequent posts making sense of the activity at the Capitol. 

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Addressing Price Transparency in Florida Health Care

Most of us like to shop around for the best price.  Store circulars receive rapt attention from shoppers seeking the best deals on everything from prime rib to socks, and the retail markdown frenzy associated with the holiday hustle is impossible to ignore.  While you are likely to hear about your friend’s new car bargain, no one ever mentions their awesome deal on a knee replacement.  Why?  The short answer is that price transparency is almost universally excluded from health care.  Most patients have no idea of the cost of services until after the bill arrives.  Likewise, they are unaware that the cost of routine medical procedures can vary substantially, even within the same geographic area. 

Clear pricing information would allow consumers to comparison shop prior to engaging providers, resulting in the opportunity to reduce their individual health care costs and better budget for health care expenditures.  Presumably, publically available pricing would encourage competition between providers, forcing them to look for opportunities to remain viable in a more open market.   So why isn’t everyone demanding to know the cost of their colonoscopy?  For one reason, health care is complex and states have struggled with reporting information in a user-friendly, understandable fashion.  In addition, quality of care is of paramount importance, no one wants to be thrifty at the expense of their health!  Thus, useful data must incorporate quality and price into a user-friendly, easy to interpret matrix for consumer consumption.

While this is a tall order, some states have managed to do just that.  According to a recent report card co-published by The Catalyst for Payment Reform and Health Care Incentives Improvement Institute,  three states (Colorado, Maine, New Hampshire) received an “A” transparency score.  These states have enacted policy that mandates the collection of data on the amount paid for certain services to all providers (private, Medicaid, self-insured employer plans, etc.).  Pricing and quality data is presented to the public via easily navigated websites (see Colorado’s website for an example). 

Florida received an “F” transparency score this year.  Failure was attributable directly to the fact that Florida providers report only the charge master or list price of services, not what insurers actually pay.  Fortunately, Governor Scott recently signed legislation that calls for a paradigm shift in reporting requirements - providers are now required to report estimated payment received, allowing for a more realistic accounting of costs.  In addition, this legislation mandates that the Agency for Health Care Administration (AHSA) contract with a vendor to provide a user-friendly website to enable consumers to access data to allow for price and quality comparisons.   Implementation has begun but it is unknown when the site will be up and running.

Transparency in health care costing has the potential to save Floridians money while helping to control the rising cost of care via competition.  Soon Floridians will be able to compare providers in terms of costs and quality side by side via a user friendly website.  As Florida moves toward transparency, conversations about the cost of common procedures may become commonplace and anything that encourages Floridians to think about their health and their budget is always a good thing.
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