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09/13/2019

Harvard's Michael Chernew Discusses Administration Hospital Price Transparency Efforts (September 12th)

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In CMS' proposed hospital outpatient rule published in the Federal Register in early August, the agency proposed requiring hospitals to make public a list of its negotiated rates for common items and services.   The proposed rule is based on two White House executive orders and is an expansion of a related regulatory rule that went into effect this past January 1st that requires hospitals to make publicly available a list of current standard hospital charges (on their so called chargemaster list).  Despite the administration's enthusiasm for price transparency (and state's - approximately half have passed price transparency legislation) the evidence to date demonstrates that price transparency has not led to or enabled patients to lower their out of pocket costs, lower health care prices, improve market competition creating greater care value.   

During this 24 minute conversation Professor Michael Chernew begins by discussing related anti-trust enforcement.  He moreover discusses his research findings concerning price transparency, alternative practices providers have or can exhibit that have demonstrated success in lowering patient out of pocket spending and potential unintended negative consequences, e.g., hospitals may demonstrate less willingness to make price concessions for fear of having to extent them to all payers, should CMS' rule go final as proposed in November. 

Professor Michael Chernew is the Leonard D. Schaeffer Professor of Health Care Policy and the director of the Healthcare Markets and Regulation (HMR) Lab in the Department of ChernewHealth Care Policy at Harvard Medical School.  Professor Chernew is a member of the Congressional Budget Office’s Panel of Health Advisors and of the Institute of Medicine’s Committee on National Statistics (CNSTAT).  He is also a research associate at the National Bureau of Economic Research.  In 2011, he served on the Institute of Medicine’s Committee on Determination of Essential Health Benefits and in 2010 was elected to the Institute of Medicine of the National Academy of Sciences.  Prof. Chernew is the former Vice Chair of the Medicare Payment Advisory Commission (MedPAC).  In April 2015, Massachusetts Governor Charlie Baker appointed Professor Chernew to the Massachusetts Health Connector Board of Directors.  Dr. Chernew is currently a co-editor of the American Journal of Managed Care and editor of the Journal of Health Economics.  He is a former senior associate editor of Health Services Research.  Professor Chernew earned his undergraduate degree from the University of Pennsylvania and his PhD in economics from Stanford University.

 
The White House's related, "Reforming America's Health System" paper is at: https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf
 
CMS' current proposed rule discussing expanding hospital price transparency regulations is at: https://www.govinfo.gov/content/pkg/FR-2019-08-09/pdf/2019-16107.pdf . See pages 39571, ff. 

The summary of Prof. Chernew, et al. April 2018 New England Journal of Medicine price transparency research article noted during this podcast is at: https://newsatjama.jama.com/2019/08/22/jama-forum-price-transparency-in-health-care-has-been-disappointing-but-it-doesnt-have-to-be/ 

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