Health Data for Action (HD4A), a signature research program of the Robert Wood Johnson Foundation (RWJF) administered by AcademyHealth, made access to big datasets available to researchers through competitive calls for proposals so they could use that data to answer important research questions and inform health policy -- questions that might otherwise go unstudied.
In this third installment of our series, moderated and facilitated by Kevin McAvey, Managing Director, Manatt Health, we continue our exploration of price transparency in health care (check out last week’s interview), this time exploring how price transparency changed when private equity firms acquired physician groups.
Price Transparency Rules Are Shaping Health Care and Private Equity Moves
Listen to 2024 HD4A grantee Christopher Behrer, M.D./Ph.D. Candidate, Duke University in conversation with President and CEO Kristin Paulson, Center for Improving Value in Health Care, and Serif Health Co-Founder and CEO Rafiq Ahmed as they discuss what happens when health care prices are made public. The interview explores how having more price information can affect the health care market, including the role of private equity companies. Christopher Behrer’s study explored how the acquisition of doctor groups by private equity firms changed after the government created new rules requiring price transparency. With the HD4A grant, they used health care pricing and claims data from Colorado All-Payer Claims (APC) and Serif Health Transparency in Coverage (TiC).
In 2021, as part of the Hospital Price Transparency (HPT) rule, the Centers for Medicare and Medicaid Services (CMS) required hospitals to disclose prices. This includes the rates they negotiate with insurers, their full list prices, and any discounts for paying in cash. Behrer describes how private equity firms are using TiC data to identify profit opportunities, and how both the TiC and APC data are critical to answering his research questions. Paulson and Ahmed comment on the importance of and the pitfalls in both data sets, and how important it is for researchers to have access to them to answer pertinent policy questions.
Unexpected Implications of Price Transparency
- Price Transparency Policies: The growth of price transparency policies has made more pricing data available, theoretically empowering people to make informed health care choices. However, there’s concern about how much people can actually use this data, given the complexities involved.
- Potential Misuse by Providers and Private Equity: Price transparency was meant to help patients. But other groups like hospitals and private equity firms can also use the data. Hospitals might use it to push for higher payments. Private equity firms might use it to find health care businesses they think are worth more than they cost, buy them, and take more control of the market, which could drive prices up.
- Challenges with Data Resources: All-Payer Claims Databases (APCDs) and data platforms like Serif Health provide comprehensive data for research, but each has its own limitations and coverage areas. The data often requires significant cleaning and validation to be usable.
- Complex Market Effects: Making price information public can affect the health care market in ways that go beyond helping patients compare costs. It could inadvertently give more power to big insurance companies or large hospital systems, which could change how the market works in ways people didn’t expect.
- Research and Policy Implications: Researchers are using these datasets to investigate private equity’s influence on health care prices, trying to understand the broader market dynamics, and helping policymakers identify potential regulatory changes.
What surprised you?
A notable surprise is that price transparency, while intended to democratize health care information, might also equip entities like private equity firm to more effectively exploit market inefficiencies. The lack of standardized formats, coupled with limited oversight, further undermines the usability of this data and exposes gaps in policy implementation.
The discussion reveals that while transparency is beneficial, it is not a cure-all. The complexity of the health care market means transparency may illuminate systemic issues but not directly solve them. The possibility that private equity could leverage this information to identify acquisitions and accelerate market consolidation represents an unintended consequence that may not have been fully considered when these policies were developed.
Join us for this year’s Health Datapalooza on September 4 and 5 in Washington D.C. We’ll have interactive workshops, unconference sessions, and networking opportunities for data innovation stakeholders to exchange ideas and expertise.
Earlier interviews in this series are available here. LibreChat was utilized to generate key takeaways from the interview transcript. The substance of the post was written by a human author.