UCSF/UC Hastings Consortium: Unraveling Mysteries of Health-Care Costs

The UCSF/UC Hastings Consortium of Law, Science, and Health policy leads efforts to uncover the challenges and benefits of price transparency in health-care costs. CTSI Director Clay Johnston, MD, PhD, also weighs in.

From UC Hastings magazine

How do you solve one of the most vexing problems in health policy—the skyrocketing cost of medical services—when no one seems to know what those costs actually are? That was the challenge UC Hastings Professor Jaime S. King confronted last fall.

A few miles up the road, policy experts at UCSF School of Medicine had been discussing how to implement the Affordable Care Act to make the health-care market fairer and more cost-efficient. But the logical first step—injecting more price transparency into the market—turned out to be more difficult than anyone had expected. It wasn’t just that the cost structure for medical services was confusing; many providers and insurers were actually barred from disclosing prices by gag rules and confidentiality agreements. “A lot of providers and insurance groups were claiming that their prices were trade secrets,” says King. “There were clauses in the contracts that banned them from discussing price.”

To figure out ways to break that stranglehold on information, UCSF officials turned to the UCSF/UC Hastings Consortium on Law, Science, and Health Policy, where King has been associate director for the past three years. King was intrigued by the secrecy issue. “It’s exciting to help solve real-world problems in the health-care space,” she says, especially one that could impact tens of millions of consumers and employers.

The result is a 113-page white paper, “Price Transparency in the Healthcare Market,” which will be published later as a two-part law review article. The first part, “Clarifying Costs: Can Increased Price Transparency Reduce Healthcare Spending?” will be published by the William & Mary Policy Review. The paper recommends a series of interconnected steps, including antitrust litigation and legislation, aimed at weakening the sometimes monopolistic power of providers and insurers as a precursor to forcing them to disclose costs. “Price transparency cannot happen in a vacuum,” King says. “If you don’t ensure that competition is functioning in the market, you could have unintended consequences, and consumers and employers could end up paying more.”

Read full article at UCHastings.edu