A Billion, A Trillion?

It really shouldn’t be this hard. Back in the fall of 2019, the Trump administration announced rules intended to create a market where healthcare consumers could shop for medical goods and services with price transparency. The idea is that people, with an ever-rising economic stake in the cost of healthcare, will compare prices and slow the rising cost of healthcare. I’ve been doubtful from the inception.

Well, the regulations are now in place and have been in effect for hospitals for more than a year. For the most part, institutions in the United States that are licensed as hospitals or otherwise approved as meeting applicable licensing requirements must post their standard charges prominently on a publicly available website. CMS said, “Beginning January 1, 2021, we’ll monitor and enforce these price transparency requirements. For hospitals that do not comply, we may issue a warning notice, request a corrective action plan, and impose a civil monetary penalty and publicize the penalty on a CMS website.”[1] With respect to insurers, CMS says, “Health plan price transparency helps consumers know the cost of a covered item or service before receiving care. Beginning July 1, 2022, most group health plans and issuers of group or individual health insurance will begin posting pricing information for covered items and services. This pricing information can be used by third parties, such as researchers and app developers to help consumers better understand the costs associated with their health care. More requirements will go into effect starting on January 1, 2023, and January 1, 2024 which will provide additional access to pricing information and enhance consumers’ ability to shop for the health care that best meet their needs.”

We have previously noted the anemic hospital compliance. It has been to little avail even to aequum and its legal counsel, Koehler Fitzgerald LLC.  What about insurers? Bloomberg reports:

The good news: Insurers are complying by publishing the required data files, which is more than we can say about a related policy that applies to hospitals. The bad news: The insurer files are so gargantuan that even skilled data whizzes are stymied.

“I never knew you could get 22 billion rows in one file,” says Leon Wisniewski, co-founder of Health Cost Labs, one of the companies trying to make sense of the data. “This is going to be many trillions of rows of records. It’s overwhelming.”

Insurers and hospitals that opposed requiring these data dumps said they wouldn’t be useful to ordinary people, and so far at least, they seem to have a point.


“The sheer size creates some barriers to entry for your average researcher,” says Chris Severn, chief executive of Turquoise Health, another company trying to translate the files into meaningful information for people shopping for medical care.

There are thousands of procedure codes with prices attached, multiplied by thousands of doctors, labs and hospitals, layered over thousands of health-plan contracts. Severn said he was dealing with 700,000 unique files for insurers’ in-network prices. “It’s hundreds of terabytes, reaching petabyte scale,” he says. (That’s a million gigabytes, or about 2,000 times the hard-drive space of the computer I’m typing on.)[2]

The analysis of this data is overwhelming and certainly costly and in 2023 employers must offer calculators to help workers gauge their out-of-pocket medical costs. Is it too skeptical to suggest that healthcare price transparency requirements will raise overall healthcare costs? Or will health plans and plan members be able to decipher the data and actually chose the lower cost provider? I’ll bet on the former.

By Jim Koehler

[1] https://www.cms.gov/hospital-price-transparency/hospitals.

[2] John Tozzi, “Medical Prices Have Never Been So Detailed, or So Confusing,” July 28, 2022. https://www.bloomberg.com/news/newsletters/2022-07-28/medical-prices-have-never-been-so-detailed-or-so-confusing?sref=BX6oS6dA.