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Competition Correlates with Hospital Price Transparency Compliance

Analysis  |  By Jay Asser  
   June 29, 2022

A JAMA study examined hospital characteristics associated with price transparency regulation compliance.

Hospitals in less competitive markets and those with greater market shares have higher price transparency compliance rates, according to a recent study by JAMA.

Researchers explored the association between hospital characteristics and price transparency compliance and found that hospital competition and resources play a significant role.

Compliance was higher in less competitive hospital referral regions (HRRs) and for hospital systems with greater market shares. Multihospital systems, for-profit hospitals, and teaching hospitals had higher compliance, as did hospital systems with more beds.

Meanwhile, government hospitals, critical access hospitals, and hospitals lacking intensive care units all were found to have lower compliance.

The authors of the study note that higher compliance rates in less competitive markets is "consistent with safeguarding of negotiated prices in the presence of greater competition."

In total, the research included 2,892 hospital systems representing 4,484 hospitals in 306 HRRs as of December 2021, with the mean compliance rate at 68% (46% standard deviation).

To collect the data, the authors manually gathered compliance information from hospital websites and verified whether payer-specific prices were reported. The hospital-level characteristics came from the American Hospital Association, the CMS Provider of Services File, and the Dartmouth Atlas of Health Care.

One of the limitations of the research is that it defines compliance based on availability of payer-specific negotiated prices, while failing to include other CMS requirements like availability of a shoppable service tool. A stricter definition of compliance, the authors admit, would likely have led to lower compliance rates in the research.

These findings follow another recent JAMA study which found that roughly 51% of hospitals did not adhere to either price transparency requirement.

Of the 5,239 hospital websites evaluated, 14% had a machine-readable file but no shoppable display, while 30% had a shoppable display but no machine-readable file. Less than 6% were compliant with both requirements.

However, the researchers of that study found that hospitals located in moderately or highly concentrated markets were significantly less likely to be compliant. Other hospital characteristics—total gross revenue, size, emergency service capabilities, and ownership type—were not associated with compliance.

CMS has so far fined only two hospitals, Northside Hospital Atlanta and Northside Hospital Cherokee, for violating the price transparency mandate after a total of 352 warnings were issued as of early June.

Jay Asser is the contributing editor for strategy at HealthLeaders. 

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