Washington, D.C. — Subcommittee on Health Chair Brett Guthrie (R-KY) delivered the following opening statement at today’s Health Subcommittee hearing titled “Lowering Unaffordable Costs: Examining Transparency and Competition in Health Care.”

Excerpts and highlights below:

THE RISING COST OF HEALTH CARE

“Today, we are holding a bipartisan hearing to examine the rising costs of health care for patients and their families.

“Rising cost of care for individuals is one of the single greatest threats to the overall economic security of Americans.

“Over the past thirty years, the cost of health care has steadily risen by almost 5% annually. In 2021, costs eclipsed $4 trillion annually, amounting to roughly $13,000 per person.

“Rising costs have coincided with a sharp rise in consolidation within the health care industry.

“There have been almost 1,800 hospital mergers between 1998 and 2021, leading to about 2,000 fewer hospitals throughout the country.

“Larger health systems are also buying physician practices at record rates.

“More than 80,000 physician practices were acquired in 2018, a marked increase over the more than 35,000 acquired in 2012.

“The three largest pharmacy benefit managers represent over 80% of the marketplace and many have merged with insurance companies, specialty pharmacies, retail pharmacies, and even drug distributors.

“Today, we spend 31% of all health care expenditures on hospital services, 20% on physician services, and 9% on prescription medications.

“It is important to note that these are just recent trends.

“The point of today’s hearing is to better understand these trends, which I believe can be achieved through greater price transparency in the health care system.”

COMPLICATED HEALTH CARE COST INFORMATION

“Despite having all this aggregate expenditure information widely available to the public, patients and employers are unable to access an up-front price for a given item or service.

“They cannot make informed decisions about how and where to spend their money as they can in virtually every other industry.

“Consequentially, this leads to high unexpected costs, a lack of trust with the health care system, and a reluctance to seek critical health care services.

“Not long ago, a constituent called me. He was frustrated because he could not find the price to get a simple health procedure done.

“He had health insurance but was trying to find high-quality care at the best price within his budget.

“Unfortunately, this a frustration shared by millions of Americans.

“I hope today can be a start on finding bipartisan solutions to make health care pricing more transparent and the health care system easier to navigate for patients.”

SOLUTIONS

“We should start with any improvements necessary to the Centers for Medicare and Medicare Services’ hospital price transparency rule and the multi-department transparency in coverage rule.

“These rules require hospitals to publicly post the prices of hundreds of common procedures on their website in a user-friendly format and require private health plans to disclose information about pricing and what patients are obligated to pay.

“All of this information gives patients and employers that pay for health insurance for their employees more information and some peace of mind to know how much their health procedure or services would cost ahead of receiving care.

“It is imperative for the Biden administration to conduct greater enforcement efforts on these rules to better serve patients with clear and actionable price information.

“It is also crucial for Congress to codify and strengthen these important transparency rules to support a more efficient price transparency regulatory environment.

“Congress should also consider solutions to make other parts of the health care system more transparent.

“We should build on our bipartisan work to make Pharmacy Benefit Managers be more transparent and ensure patients as well as employers are getting the best possible deal on their prescription drug benefits.

“This could also lead to greater access to biosimilars and generics when they come to market.

“Shining a light on middlemen who are making prescriptions more expensive is one important step to bolster competition and lower prices.

“Further, patients, especially seniors, are unnecessarily paying more money for the same service simply because of the location where it was delivered, which requires further discussion.

“It’s well past time to carefully examine the root causes of these inefficiencies that are plaguing patients with higher costs and more confusion.

“By working together across the aisle, I’m hoping we can make important strides to make the health care system easier for patients to navigate so that they can get the health care they need.”