Healthcare Price Transparency Falters: Insurers Benefit While Patients Remain in the Dark
Despite a push for greater openness, mandated healthcare price disclosures are largely failing to empower patients and are instead being leveraged by insurance companies and healthcare systems during contract negotiations.
The idea of readily available healthcare pricing gained traction with bipartisan support, fueled by frustrations over opaque billing practices. Republicans have long advocated for giving patients more control over costs, while former President Donald Trump, as early as 2019, championed requiring hospitals to publish their charges online. “You’re able to go online and compare all of the hospitals and the doctors and the prices,” Trump stated at the time, envisioning a consumer-driven marketplace for healthcare.
However, implementation of the policy, which took effect in 2021, has been plagued by issues. Compliance has been low, and the data that is available is often difficult to interpret. Instead of sparking a wave of price-shopping by consumers, the limited data has become a key tool for insurers and healthcare providers in their ongoing negotiations over reimbursement rates.
“We use the transparency data,” explained an executive at Blue Cross Blue Shield of Minnesota, noting the insurer’s goal is to ensure fair payment rates. “It’s to make sure that we are competitive, or, you know, more than competitive against other health plans.”
Poor Hospital Compliance Hinders Progress
Initial assessments revealed widespread non-compliance with the price transparency rules. A study within the first ten months of the policy’s implementation found that only about one-third of facilities were adhering to the regulations. From June 2022 to May 2025, the Centers for Medicare & Medicaid Services (CMS) notified 27 hospitals they would be fined for failing to comply.
Subsequent efforts to strengthen the policy have come from both sides of the aisle. President Joe Biden has pushed for increased data standardization and stricter enforcement, while President Trump, in early 2025, signed an executive order calling for increased fines for non-compliant hospitals and doctors. CMS followed up with regulations aimed at increasing both the penalties and the level of detail required in the pricing data.
Despite these efforts, “there’s no evidence that patients use this information,” noted Zack Cooper, a health economist at Yale University. A 2021 study co-authored by Cooper found that patients routinely bypass closer, lower-priced MRI facilities, instead following their physicians’ recommendations.
The Data’s Limited Impact on Pricing
Industry experts interviewed by KFF Health News also expressed skepticism that increased price transparency would significantly alter healthcare costs. Research suggests that transparency policies can have mixed results, with one 2024 study of a New York initiative finding only a marginal increase in billed charges. This outcome casts doubt on the long-held Republican belief that empowering patients with price information would incentivize them to seek out the best deals on procedures like imaging or knee replacements.
Several factors contribute to this lack of impact. Some patients simply do not engage in price comparison, and the complexity of medical services makes direct comparisons difficult. Unlike consumer goods, where prices are straightforward, healthcare costs can vary significantly even for the same procedure, depending on individual patient needs and unforeseen complications. For example, two patients undergoing childbirth with the same obstetrician could receive vastly different bills based on whether medications were administered to induce labor or if an emergency cesarean section became necessary.
Furthermore, the presentation of the data itself often hinders usability. Information is frequently buried in complex spreadsheets and requires a specialized understanding of billing codes. The American Hospital Association noted in a July 2025 communication to the Trump administration that hospitals must make “detailed assumptions about how to apply complex contracting terms and assess historic data to create a reasonable value for an expected allowed amount” when calculating these costs.
Negotiating Tool, Not Consumer Guide
The variability in hospital contracts with insurers further complicates matters. According to Jamie Cleverley, president of Cleverley and Associates, the cost for a patient with one insurance plan can differ substantially from the cost for another. This lack of standardization, Cleverley emphasized, is not malicious, but rather a consequence of industry practices. “They’re not being nefarious,” he said. “Until we kind of align as an industry, there’s going to continue to be this variation in terms of how people look at the data and the utility of it.”
Instead of empowering patients, the federally mandated data has become a cornerstone of negotiations – and sometimes even legal disputes – over appropriate compensation levels.
“The top use for the pricing data for health care providers and payers, such as insurers, is ‘to use that in their contract negotiations,’” said Marcus Dorstel, an executive at price transparency startup Turquoise Health. Turquoise Health, along with a growing number of similar companies, leverages machine learning to assemble and analyze price data, often advertising their services to hospitals and insurers engaged in contract discussions.
“I think nine times out of 10 you will hear them say that the price transparency data is a vital piece of the contract negotiation now,” Dorstel added.
While price is a critical factor, other considerations also influence negotiations, such as quality of care and rates of unnecessary treatments. An executive at Blue Cross Blue Shield of Minnesota noted that providers often leverage the data to justify higher payment rates, stating, “‘I need to be paid more.’”
Ultimately, the current state of healthcare price transparency suggests that, despite good intentions, the policy has largely benefited industry stakeholders rather than the consumers it was designed to help. .
