Randy Pate ran the office at CMS that wrote the price transparency rules. As Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight, he was in the room when the 2019 executive order landed, and he has watched every version of the rule since from the outside.
We start before there was a rule at all. Randy explains why a functional healthcare market needs prices before it can have anything else, walks through how an executive order becomes a final rule, and is candid about how much of the first pass was a shot in the dark. He also talks about what changed his own mind: he came in from the payer side believing negotiated rates were a private contract, and the employer listening sessions moved him. Listeners walk away with the original theory of the case, an honest read on where file quality stands, and a practical answer to what a buyer can accomplish with this data today.
In this episode
- Why you can look up the price of a fighter jet but not an MRI, and why prices are the precondition for everything else
- How the postwar tax treatment of employer coverage and the fee-for-service model built the incentives we are still living with
- What happens between an executive order landing on a desk and a final rule going out the door
- Why the employer listening sessions changed Randy’s mind about the rule he was skeptical of
- Starting with the 100 shoppable services, and why the early files were too big to be usable
- CMS running the schema and guidance on GitHub, a first for the federal government
- The distance between a negotiated rate on paper and the dollar amount paid on a claim
- Why enforcement started light, where states are picking it up, and what Randy tells someone who wants to use this data Monday morning
The rule Randy and Andrew trace back to its beginning is Executive Order 13877, “Improving Price and Quality Transparency in American Healthcare,” signed in June 2019.
Enforcement figures cited in this episode
These numbers move, so here they are precisely as of publication.
CMS has issued civil monetary penalties to 28 hospitals since enforcement began in June 2022. By year: two in 2022, twelve in 2023, three in 2024, ten in 2025, and one in 2026.
The ten penalties issued in 2025 ranged from $32,301, imposed on Southeast Regional Medical Center in Kentwood, Louisiana, to $309,738, imposed on Arkansas Methodist Medical Center in Paragould, Arkansas. The $32,301 is the lowest CMS has issued since enforcement began. Across all penalties to date the range runs higher: the largest is roughly $880,000, issued to Northside Hospital Atlanta in 2022.
On warning notices, more than a thousand is the accurate figure. CMS has confirmed over 1,249 warning letters to date, and a further 519 hospitals received noncompliance letters between April and early June 2026.
Every penalty notice is published on the CMS enforcement actions page.
Transcript
Andrew Gordon: Welcome to the Price of Healthcare. I’m your host, Andrew Gordon. On this show, we sit down with the executives, influencers, and people working to build a functional healthcare market. Every episode, we unpack what’s broken, what’s working, and what it takes to buy healthcare with informed choice. In this first foundational episode, we’re going to be talking about the origins of the price transparency regulation. Roughly seven years ago, the federal government began drafting a rule that would eventually require hospitals and later insurance companies. To publish their negotiated rates and charges. It survived both political parties and continues to evolve. We’re going to be covering how it got started, how it was built, and where it goes from here. My guest today is Randy Pate. Randy’s the founder of Randolph Pate Advisors out of Arlington, Virginia, where he advises payers, providers, states, and health technology companies on federal and state health policy. Before that, he was Deputy Administrator at CMS and Director of the Center for Consumer Information and Insurance Oversight, which is the office that runs the health insurance exchanges and writes a great deal of the rule book for private coverage in this country. In that job, he led the turnaround of healthcare.gov, and he had a hand in shaping several of the policies actively influencing today’s market, including transparency and coverage, the individual coverage health reimbursement arrangements, and section 1332. State innovation waivers. Randy’s worked on this from many different seats. Public Health Council for House Energy and Commerce, Health Council to Congressman Kevin Brady on Ways and Means, a Health Policy Fellow at Heritage, and a Senior Advisor at HHS. On the private side, he helped launch MITRES policy work with CMS and spent six years running public policy for Healthcare Service Corporation. He’s a lawyer by training with degrees from Alabama and a master’s in public health from Johns Hopkins. Randy, welcome.
Randy Pate: Thanks Andrew, really appreciate it. Thanks for the very nice intro.
Andrew Gordon: So there’s been a lot of content covering price transparency in the present tense with files and compliance and vendors. I haven’t seen a lot of people start with the question of why anybody thought price transparency would work in the first place and what the original theory was, how we went from essentially a sketch to something with teeth. You were in the room from the very first day and you’ve watched it every step since. Randy, take us back to before there was a rule. What was the problem that you and your colleagues were trying to solve?
Randy Pate: It’s a great question and you know, it’s the fact that I’m calling it a great question is even an oddity really when you think about every other sector of the economy. Computers, cars, houses, you know, I even went to a seminar one time where somebody said, you know, you can literally go online and find the price of a fighter jet, right? But it you can’t find the price of an R I or you can’t find the price of a hip replacement. It’s very, very difficult and Pretty much impossible to do that. And so that I mean the problem is that if we want healthcare to operate anything like a real market, you know, we have to have the prices. And the prices are not sufficient to have a real market, they’re not automatically gonna solve everything about the you know healthcare system in our country, but it is a necessary precondition to pretty much anything else, right? I mean if you don’t have prices, you’re not gonna be able To have consumerism. If you don’t have consumerism, you’re not going to get those signals that we as consumers send about what we like, what we don’t like, what kind of quality we’re looking for, our trade-offs that we all make between price and value when we shop for everything else, right? So if we don’t have prices, we’re never going to get to those other aspects of consumerism that frankly make so many other products that we buy so great and that we take for granted.
Andrew Gordon: Great points. And I do think that there is a lot of parallels. I like how you talked about other industries and the fact that we are used to knowing the prices up front and going back to some of the earlier language informed choice and being able to really know beforehand what is it that we are looking to receive and what is the price attributed to that. What’s the value exchange going to look like? So You talked a lot about consumerism and did that play a lot into the original theory of how this would work? Because we’re also seeing whether it’s with employers or researchers and reporters, what was kind of the combination effect that was aiming to happen from a lot of this initial thought and direction?
Randy Pate: Well I’ll just speak for myself and my own sort of evolution on this topic. So you know, I come from somewhat of a payer background. I work for you know Blue Cross with SHILED, HCSC, you know, in its five states, Blue Cross plans and you know, I sort of have that mindset on the sa at the same time I don’t I don’t only come from that mindset, I also try to think about what’s the provider perspective, the patient perspective, you know, the device manufacturer, the drug makers, all of it because it’s all Important to the how the whole system functions or doesn’t function, right? But when I go back even before price transparency, the regulations, and the executive orders and all of that, you know, I think about unfortunately we’ve had some sort of accidental steps in our healthcare system’s development, you know, some I think all for very good intentions over the years, but have caused some problems that we’re now really seeing come. come to fruition. I mean we spend almost twenty percent of our GDP on health care, which is much higher than any other developed country. Our outcomes are, you know, we have really good care. you know, if you have cancer, if you have heart disease, if you have some of these tough conditions, we have very good care, but sometimes the access is spotty or sometimes you know, the quality we don’t know what we’re getting a lot of times before we go in. So these are problems
Andrew Gordon: Mm-hmm.
Randy Pate: that they didn’t just come about in twenty nineteen when we were Starting on this on this path to this regulation,
Andrew Gordon: Okay.
Randy Pate: it goes back to World War II, post-World War II, when IRS sort of came out and said any
Andrew Gordon: That’s what
Randy Pate: health care or health insurance that is provided by an employer is tax-advantaged, right? So it was basically
Andrew Gordon: Thank you.
Randy Pate: you know not taxed by the federal government, whether it be on the employer side for the contribution that they make to the employees’ premiums or the employee side. And so out of that. that it became this benefit that came along with employment. And you know, and I think that’s a good thing. It has a lot of good aspects to it. But you know, when people think about
Andrew Gordon: Yeah.
Randy Pate: health care and health insurance, they often I call it kind of like a
Andrew Gordon: Okay.
Randy Pate: It’s almost like a you get a buy a ticket to Disney World and you know, once you get that ticket, well it’s not true anymore, but used to be when you got your ticket to Disney World, when you w went in and rode the rides, once you got in, you got to
Andrew Gordon: Yeah.
Randy Pate: ride all the rides for free, right? And so it’s this thought process that we’ve been under for a long, long time where healthcare is just something that, you know, I’ve got my insurance card, I go in and everything should be should be free. And I that doesn’t mean I’m not saying that I think people Love to go to the hospital and ride, you know, an MRE MRI machine like a you know like a roller coaster. I’m not saying that, but it
Andrew Gordon: Okay.
Randy Pate: it does from an economic incentive perspective, it sort of turns things in a bad direction, right? In other words, you know, it’s something that somebody else pays for, it’s not something I have to think about. And of course, then we’re
Andrew Gordon: Okay.
Randy Pate: like, well, who wants to have cost be a barrier to their care, right? And that’s true, except now
Andrew Gordon: Well, it’s not.
Randy Pate: Now we’re seeing healthcare year after year outpace inflation in the general market. And you know, whereas you know inflation most years is you know a couple points, three percent, maybe four or five percent a really bad year, and healthcare can be regularly seven, eight, nine percent growth. you know, and that just is not sustainable, right? So we have
Andrew Gordon: Yeah.
Randy Pate: to figure out some way to deal with it. Now
Andrew Gordon: Mm.
Randy Pate: Along with that has been this whole you know fee for service model that our healthcare system is based on. And a fee for service model just means that you go to the doctor, you get care, whatever the doctor prescribes, and then they send a claim to the insurance company or to Medicare and then they get paid a fee back. Well that, you know, nothing wrong with that either, right? I mean it’s a it’s a the most logical way
Andrew Gordon: Mm-hmm.
Randy Pate: to structure something. However, it just ha does happen to often carry the incentive of The more care is delivered, regardless of whether that care is good or bad, the more the provider gets paid, right? And you know, and now we’re seeing the system for the last 30 years has been trying to get away from that. And with things like health maintenance organizations, you know, ACOs, you know, whether it’s upside and downside risks for the providers, there’s all of these ways to sort of dance around, in my opinion, you know, consumerism, right? Which is, you know, consumerism is the real
Andrew Gordon: Most of the same thing is.
Randy Pate: where the rubber hits the road, I’m using my money,
Andrew Gordon: I missed it.
Randy Pate: I make my decisions, you know, I’m making those trade-offs, and there’s nobody better suited than me to do that, right? And so very long answer, but it but I think it’s important as a foundation because price transparency,
Andrew Gordon: Yeah.
Randy Pate: again, it doesn’t solve all of these
Andrew Gordon: Okay.
Randy Pate: other issues that we’ve been living under for a long time in our healthcare system, but it is you have to have it as a start.
Andrew Gordon: Love that. And completely agree with and hear the affordability challenges that we’re seeing, the incentives that need to be unpacked and understood, and then making sure that they’re aligned for the folks that are receiving and delivering the care and being able to pay for it as well. So switching gears a little bit over to the policy and legislative side, the twenty nineteen executive order set this in motion. Walk us through what happens between an order landing on a desk. and then a final rule going out the door. I feel like there’s a lot of listeners that aren’t really sure what this process looks like.
Randy Pate: So, you know, when you think about the federal government, it’s really a lot like you would think about it from the outside. You’ve got the White House, the folks are over there, the you know, they’re at the top of the mountain in terms of federal government and you’ve got all us agencies and we’re all we’re doing our work. We have our programs and our policies and we’re sort of carrying things out. And you know, the first reaction when you see an executive order like that comes down, you know, someone calls you or you get a text or, you know, an email and the first reaction is panic. Right, like no, what do I have to do? And but in all seriousness, you know, I think it was one of those things where I came again from a payer background and sitting in my seat, you know, I’d always thought, well, you know, prices and negotiated rates that you know between hospitals and health care plans, or between doctors and health care plans, that’s a matter of you know, contract. It’s private contract,
Andrew Gordon: I think just
Randy Pate: and you know, that’s part of the value that. health insurance companies bring right is that they’re able to negotiate lower prices because they have for example they bring a lot of membership
Andrew Gordon: No.
Randy Pate: you know a lot of patients to that provider so my mindset was
Andrew Gordon: yeah.
Randy Pate: sort of like well this is a contractual arrangement these prices and now we’re being told
Andrew Gordon: No.
Randy Pate: we’re gonna have to start requiring the companies to disclose that their secret sauce right for how they you know how they put together their networks, how they make prices attractive, how they, you know, maybe you give a little here and you take a little more here to get to your product that you know that people buy. And
Andrew Gordon: Nothing.
Randy Pate: so I had a I would say I had a strong bias against the government intervening and saying, okay, we’re gonna open up the doors on this. You know, but then I would just say as a team at CMS, we knew, you know, this is an executive order is coming down. We’re gonna have we need to comply with this. And so
Andrew Gordon: Okay.
Randy Pate: we started doing research. We started holding listening sessions with different players. And that is one of the great things about being in the federal government is you can really be a convener and hear all these different perspectives. So we heard from you know patient groups, insurance companies,
Andrew Gordon: That’s good.
Randy Pate: we heard from employer groups that are you know sponsoring
Andrew Gordon: Cool.
Randy Pate: care for you know big employers like Lockheed Martin and Walmart and sort of these big players, right? we and we heard from all across, you know, the sampling of these different groups. And, you know, the message that we started to hear was, you know, it’s not easy. It’s there could be some pitfalls with doing this. It would be very burdensome on the insurance companies to do this. But, you know, particularly the employers were really interested in getting this data because they believed it was really things that they believed were hidden behind a you know a wall for them for so long. They were just basically contracting out for these healthcare services with third party administrators and you know for their members and then they couldn’t receive that feedback on well what is the price we’re paying for this you know this episode care or for this service and they really felt like as purchasers they could really move the needle if they had that data, if they had that information. So I would say that was the one of the
Andrew Gordon: So I just think that’s good
Randy Pate: the things that really changed my mind about doing this. in doing this regulation. And then from there, I would say it is a lot of teamwork. You know, we work with federal partners. We had the Department of Labor. We had the Treasury, we had,
Andrew Gordon: Well,
Randy Pate: you know, course experts at CMS, and then we have, you know, our White House sort of, you know, they’re like a quarterback, right? They’re sort of running the coordinating the whole thing. So, you know, we my team sort of took the lead
Andrew Gordon: Yeah.
Randy Pate: on the drafting of the regulation, the proposed rules. So first put out a proposed rule and then you get public comment on it. So I would say
Andrew Gordon: Yeah.
Randy Pate: very deliberative process, right? We’re doing listening sessions, we’re meeting together with, you know, as a federal you know partnership across all the different agencies, putting out a draft to something we think is a starting point,
Andrew Gordon: Yeah.
Randy Pate: taking into account all of those federal all those public comments, all that what the public has to say in writing, and then you know, issuing a final rule. And I’ll still say in an area as complicated as this, I know we’ll get into that, but in an area as complicated
Andrew Gordon: Yeah.
Randy Pate: as price transparency and something that had never been done before, even with all of that, we knew we were gonna miss on a lot of things and we knew that we were taking a stab of the dark on a lot of things. So really, really complicated area and but we wanted to start down the pathway, you know, of getting these prices into the hands of the consumers and the employers.
Andrew Gordon: Great and amazing to hear on the focus groups, the public commentary, a lot of that collaborative effort to be able to put something together. It’s incredibly valuable. And I also will say 100% on the complexity of things, it can be very difficult. Pricing and healthcare, the factors that can influence it, understanding the whole supply chain there. It is very difficult. And it’s something that as you guys were drafting it. working together with other people, making sure that you were spending that time to put in that critical thinking makes a lot of sense. So what would you say in that first pass, what are some things that you guys really knocked it out on the park on that you got right?
Randy Pate: I don’t know if we knocked it out of the park on anything other than taking a step and you know, having it really happen for the first time, right? So and I would say that required I mean it was very burdensome. It is very burdensome for insurance companies, for example, to go through all of the millions of, you know, claims that they have and sort of put them in a format that can be published, right? And it was two things. So it was you publish the negotiated rates and then it was also you have to update your own consumer tool. If you’re an insurance company, you have to have a consumer tool so that me as an enrollee, I can go in and you know put in the service I want and then see, okay, is this a network? Where am I on my deductibles? How much out of pocket am I likely to get? So we really updated that you know how the those were supposed to operate. You know, I guess I would say one of the biggest I guess rewards out of it was after I’d left administration and when the regulations started to get be effective. You know, there was a final regulation
Andrew Gordon: No.
Randy Pate: and then it they became effective starting about a year or six months to a year later. And when I started saying hey the insurance companies are doing this, they’re actually posting real data. We’ve got something, right? there was a
Andrew Gordon: Okay.
Randy Pate: lot of doubt, you know, I would say that we were gonna get anything at some point, you know, just because it was so you know never been
Andrew Gordon: Yeah.
Randy Pate: done before, right? But we started getting data, we started seeing companies post their rates. You could
Andrew Gordon: That’s how we won’t.
Randy Pate: go online. Whether they were readable or not, we’ll get to a whole nother story, but I would say those are the two biggest things was just getting started and then you know actually seeing the numbers start to come out.
Andrew Gordon: There’s lot to be said for bringing new things to life and just the amount of work and rigor that it takes to go from zero to one. So incredible work there and it is absolutely an iterative pop process. As we’re thinking about that and moving into how the legislation and the rules started to really get traction teeth. Seemed like in the first couple of years compliance was pretty uneven, a lot of the files seemed to be unusable. Was that a surprise or about what you’d expect from any new reporting requirement?
Randy Pate: Well, it w it was about what I would expect for the complexity of what was being undertaken. So, you know, just for example, I mean, you know, there’s there are a lot of problems with the with the data or there has been, especially the first, you know, the first round. You know, some of these files were terabytes or whatever the bigger thing than terabytes, you know, really, really big. So, you know, me as a you know, I’m on my laptop, you know, I don’t know if I have that kind of storage space or computing power to be able to download Something like that, right? So and often remember it was before AI tools came out, right? So before they really hit it big, and so you know, there wasn’t any ability to sort of like chat GPT, you know, all of this data and just make it really clean. So, and we’re I think we’re getting there. I still don’t think we’re there yet, but so you know, we knew there were gonna be hiccups, and so we actually started off. We said, Look, you don’t have to insurance companies, you don’t have to put out all of your negotiated rates yet we’re just gonna do the 100 most shoppable services and we went to a list that existed in Medicare and the services that were most you know susceptible to consumers being able to shop and compare and the easy thing that always comes to my mind is you know MRI you know imaging that’s you know fairly you know they’re imaging centers and they are they’re located in a lot of different places and you know you can sort of shop and compare you know lab work, you know, things like that where you know they really are sort of considered more shoppable. And then after that the second phase was okay now you have to
Andrew Gordon: Okay.
Randy Pate: do everything, right? So you know, I mean it again the
Andrew Gordon: Right.
Randy Pate: data still has a long way to go. And I will say the other the other thing is we knew that people weren’t gonna be able to pull all of this down on their laptops, you know, as it was or on their smartphones, but we believed and we are still hoping that third-party developers, you know, companies out in Silicon Valley and smart kids, you know, with their computers will be able to come up with tools that would allow you to have your smartphone and in the doctor’s office and you know be able to say, hey, I know you’re telling me I need this, but and you want me to go to this provider, but that’s going to cost you know five thousand dollars, and while this one over here costs a thousand, what do you think? You know, these types of conversations that we just don’t have. today and you know and I
Andrew Gordon: Right.
Randy Pate: some people say well you know you shouldn’t bring cr bring price into it you know in the in the conversation about healthcare because it’s your health you know but again that’s just not how we do anything else right even exercise classes or vitamins or supplements or you know you know gym memberships
Andrew Gordon: Mm.
Randy Pate: or going to the to the spa people make
Andrew Gordon: Mm-hmm.
Randy Pate: these value judgments all the time and you know just trying to interject the interject a little bit of that, you know, into the into the thought process, I think will have an outsized impact in the long run.
Andrew Gordon: There’s a lot to be said for with medical debt as well and just not knowing necessarily the prices beforehand, combined with potentially that mentality you talked about before of I have insurance, so it should largely be covered. There’s a lot to unpack there. And it does take some time to get through to this when I think about the machine readable files. You know, that’s what the machine readable files is. The goal of the policy and the legislation is to put all of this information out there. So that as you mentioned, Randy, these founders, these entrepreneurs, these technology proficient innovators can really use the information and help to translate it into those real world workflows, including in those tools that you mentioned with insurance companies or just other third-party tools that people can leverage in order to help them make greater decisions and have more information ahead of going to receive certain services. I want to Talk about the gap that exists between a rate on paper and then what ends up getting paid on a claim. There is a gap there and I’m curious to know how policy is trying to close that distance between those two worlds and how close we’re getting.
Randy Pate: Yeah, it’s a great it’s a great question. So one just going back one other thing on the machine readable files, right? So I think another area where the team really hit it out of the park was the use of GitHub. So what when we talk about a machine readable file, you have to have a schema or basically a design for how each data element should be should look, you know, where it should be placed. And the federal government, I for the first time ever in my knowledge, use GitHub as a place for you know guidance and instructions and to be issued on this and then for you know the health insurers mostly to come on the tech people to come on and ask questions. So I had no I cannot take credit for it at all. My team came up with it. I’d never used GitHub before. I have since started to use it, but that’s another exciting thing I just wanted to throw out there. and these are you know I think honestly Andrew, you know, people are so jaded about our government a lot of times. And I would just say,
Andrew Gordon: yeah.
Randy Pate: you know, there’s a lot of reason to be jaded, there absolutely is, but at the same time, there’s also a lot of good people who are doing great stuff, and that is just an example of something I would have never thought of, but and the and government has never really done before, but now
Andrew Gordon: Okay.
Randy Pate: is something that has been in place for you know six, seven years now that people are using and it’s still evolving. but to get to your actual question. I will say you know We’re still not there yet at all on the translation between you know what a negotiated rate sort of before a service happens is versus what the final payment is.
Andrew Gordon: Yeah.
Randy Pate: Part you know, there’s legislation out there, for example, and I know you know the federal government on the executive branch side is pushing towards, okay, if you have a starting point, let’s say you’re doing something like a value based care arrangement or
Andrew Gordon: Well.
Randy Pate: an alternative payment model, right, where you know instead of a you know a fee for service, you’re saying, okay, well we’re gonna measure outcomes or we’re gonna put some sort of incentive payment on the back end for controlling costs, right? The basic idea is that you need to be able to disclose in the transparency file, in the machine readable file, the math for how you get there, you know, whatever you’re doing, your percentages and you know, if it’s a percentage of Medicare, you put that in there, you need to disclose the formula and then you actually need to come up with a dollar amount, right, at the end of it, right? And so that’s you know, that’s something that, you know, is not there yet,
Andrew Gordon: But it’s my thing.
Randy Pate: but You know, the idea is that the consumer or the employer or whoever can look at not only the methodology if they want to, but they can also see how it works in reality for this service for this patient with a dollar amount.
Andrew Gordon: Right. The methodology, the standardized schema, the fact that the information is living in or the schema is hosted in GitHub and is allowed for people to interact with it and to see everything that’s going on brings so much validation to all of this work that’s making its way and has been making its way into industry for quite some time. The rules put a named executive on the hook. in the hospital machine readable file to attest that they are true, accurate, and complete. How much would you say personal accountability changes behavior compared to a fine?
Randy Pate: Well, I for one thing, there haven’t been a lot of fines issued yet. There have been a number on the hospital side, but not really on the health insurance side. I would just say having worked at a health insurer, you know, having to have that name, that officer, you know, sign their name to it, it doesn’t, you know, it doesn’t guarantee accuracy. It just I think it creates a little more attention within the organization. You know, you’re gonna tend to have a you know, real lines of accountability. when you do have to have an officer sign like that. So I think it’s a good thing.
Andrew Gordon: Yeah.
Randy Pate: You know, I think, you know, it doesn’t guarantee that they’re all, you know, you could always have inaccuracies. You could have good, you know, they could be for good faith reasons. Sometimes occasionally you could have intentional, you know, gaming of it. I don’t think that’s going on for the most part.
Andrew Gordon: Yeah.
Randy Pate: I just think that’s another little, you know, another little reminder for these organizations, some of whom are huge, right? They have big staffs. big you know divisions and everything just to create some of those lines of accountability and make sure that somebody is getting briefed up and they’re and they’re when they put their name on it they feel confident that they’re not gonna have egg on their face.
Andrew Gordon: For sure. Speaking of the penalties, so CMS has issued roughly twenty seven penalties since enforcement. Ten of them were last year, I believe, ranging from thirty thousand dollars to just over three hundred thousand. Thousands of hospitals have received warning notices. What was the original goal for enforcement and how do you see that evolving over time?
Randy Pate: Yeah, so any type of new regulation like this, you know, you have to balance a couple of things, right? One is you have to balance the need for people to have this information and for the employers to have it, like we talked about, which is so critical, because you know, if you have you know, lack of compliance, you’re never gonna be able to do things like have apples to apples comparisons between how much provider A versus provider B charges for the same service, what’s included in that. You know, all these important questions, you never get the benefits of the of the rule unless you have enforcement and you have compliance, right? But at the same time, as I mentioned, it’s extremely difficult for a lot of especially a lot of the carriers, you know, that have sort of legacy IT systems. So for example, you have a lot of acquisitions, you know, a company, a large insurance company goes and acquires a smaller one that has, you know, maybe some antiquated. Systems or this where the systems don’t talk to each other, and those types of things can create a lot of cost
Andrew Gordon: Right.
Randy Pate: as you’re trying to comply with something new like this. And so, you know, we want it to sort of take a very light hand to begin with, you know, but over time, the expectation clearly is that you know we want to get to full compliance and we want to make sure that the intent
Andrew Gordon: Well.
Randy Pate: of the rule is you know is carried out, and so I think now you’re seeing even more. Focus on compliance. You know, you’re the Congress is even looking at you know increasing penalties and that sort of thing. A number of states are moving in that same direction. The states have actually played a huge role in not only enacting their own versions of price transparency, but in starting to police and really make sure that the carriers in their states are complying. And so that’s you know it’s all part of the push to get towards you know true price transparency. Yeah.
Andrew Gordon: When I think about that too, Randy, and the enforcement, the accountability, the responsibility, we’re many years in on both fronts, the two separate rules, the hospital pricing transparency and then the insurer with the transparency and coverage rules. What’s your read on the quality and of the information that’s coming out of these files in terms of if you want to speak to each of them separately or just kind of in general? Would love to get an understanding of where we stand.
Randy Pate: So I honestly I think there’s still a long way to go. I think we’ve also come a long way. So and that I’m not a data scientist and I’m not out there, you know, downloading JSON files and things like that, but just from my you know, my understanding, reading some of the media articles and what some of the commentators are saying, it seems like there’s been a big leap forward starting earlier this year. So CMS issued some new guidance around you know what the files should contain, what the data should look like. last fall and they said, you know, by early this year we’re gonna start enforcing that. And you know, I just did a little spot check of some of the biggest carriers, you know, pull up some of the files and whereas in the past I, you know, I was completely lost. This time I would say I was, you know, a little bit less lost. it did feel like this looks cleaner, this looks more, you know, I can keyword search some things and is actually
Andrew Gordon: Well it’s
Randy Pate: bringing up something I think, you know. makes sense. I think there’s a proposed rule that CMS has out now that you know I think goes even further in cleaning up the data, reducing the file size, and getting rid of some of the redundancy in some of the files.
Andrew Gordon: Right.
Randy Pate: So that’ll be another big step when that gets you know that comes to fruition. But I think you know it has gotten much better, I would say in the last, you know, over the course of this last year in particular.
Andrew Gordon: So I want to shift gears a little bit to the different stakeholders and groups that are engaging. You had mentioned earlier, Randy, that employers are certainly at the forefront. We’re top of mind when drafting of this. We’re also engaged in those discussions and the public commentary that’s coming in. Tell me a little bit about how they have shown up and are you seeing or are we noticing that? Is it a small circle of sophisticated plan sponsors? Is it more widespread engagement? What are we kind of thinking in that department?
Randy Pate: I think there is a lot of dedication and, you know, fervor, you know, to get this done and to do it, you know, in a way that has impact, you know, that really moves the needle. I think, you know, it’s one of these very tough problems and you’re and you’re talking you know, you’re talking about all these different organizations around the country that you’re trying to bring along to this new way of thinking and this new you know, this new environment really that we’re trying to create with price transparency. But, you know, I mentioned the employer groups before. You know, I think they’re really, they’re continuing to push, you know, from their perspective. I’ve been struck by just the number of technologists, right, and the data science people that are working at some of these companies that, you know, they
Andrew Gordon: Yeah.
Randy Pate: are on top of this. They know every aspect of the MRFs, they know, you know, they have very strong opinions on how do you make this more usable, how do you make it clear what’s in network versus What’s out of network? How do you make it clear when there’s an alternative payment arrangement? You know, how the you know how that should be displayed. You know, another big thing is prescription drugs. That’s something I didn’t mention. The prescription drug file really has not been implemented yet, so that means there’s not we’re not seeing prices for prescription drugs posted yet. And so I think there’s a push to get that done, possibly by the end of the year through legislation. So
Andrew Gordon: Okay.
Randy Pate: the stakeholder can. community I think has been really engaged and it’s only getting more engaged and I would say at a at a more detailed level, you know, as these files continue to evolve. And so that’s been really interesting to see. And I would say, I’ll just say when you look at the polling
Andrew Gordon: What is it? That is not
Randy Pate: on this, you know, it’s a it is a bipartisan issue. It’s a nonpartisan issue really. And ninety percent of Republicans and Democrats together agree that we need this. So you know it’s one of these
Andrew Gordon: Yeah.
Randy Pate: things that I don’t know if there’s any other issue across the whole spectrum is of domestic policy, foreign policy where there’s that level of support. so, you
Andrew Gordon: Yeah.
Randy Pate: know, just let’s hope that our leaders, you know, the Congress and the administration listen and really follow through on it.
Andrew Gordon: I wanna actually parlay off that comment with the bipartisan support and excellent points too that it is rare sometimes to see this. What would you say can explain that unwavering support across the board that’s been received for this kind of stuff?
Randy Pate: I mean look, you know, I think a lot of it’s frustration. just to be honest, you know, I think you know, there’s just a lot of baffling things. you know, I’ll just say in my own I’m not a I thankfully have not used a lot of healthcare. You know, I’m a healthcare person but I hate to go to the doctor. But you know, I had to go I had to go for you know, a checkup basically a few months ago and you know, I got a bill afterwards and I thought, well, you know, that should be zero out of pocket because of the you know the part of the ACA says preventive care is you know there’s no cost sharing but I got you know I got a bill so I click on it and I said it says you can see your invoice and see what you’re actually charged for and this is after the fact not before I click on it and it just so it said a hundred dollars right is the bill and I said okay what’s that? I click on it to find out what it’s for and it just says pay us a hundred dollars basically no information nothing about why What you know, and so I think people are frustrated with that. there’s no other system like that I you know but even some of the most frustrating consumer-facing systems out there. You know, you think about some of the telecommunications things, you know, trying to get your cell phone service, figure out how much your bill is, there’s more transparency in that. Or cable or you know, the airline industry, all these that you know, there’s a much more transparency in that than there is in Healthcare and so I just think people are fr and then multiply that little problem, that little tiny problem I had for some people,
Andrew Gordon: Responsible.
Randy Pate: multiply it by thousands and thousands of dollars, and not only that, but you know, they’re in a situation where they had no idea going in it was gonna cost anything like that, right? So I honestly think frustration is one of the biggest causes of it. but you know, I also think you know,
Andrew Gordon: Okay.
Randy Pate: I think that people do realize. that one way or another, you
Andrew Gordon: Mm-hmm.
Randy Pate: know, it’s up to all of us individually. We can’t we can’t continue to sort of you know we can’t continue to sort of punt and hand off
Andrew Gordon: Okay.
Randy Pate: personal decisions. You know, we have information now, we should have information at the tip of our fingers all the time and we should be able to make better decisions. So we just need information to do it.
Andrew Gordon: I’d love to shift gears a little bit and do some forward looking, some forecasting. If transparency works, the way that it was drawn up, the way that we’ve been iterating on it, and with some of the things coming down the pipeline here, what does the market look like in five years?
Randy Pate: I mean I hope the market looks like a real consumer market where people are able to know in advance how much something costs. They have the ability to see it, they have the ability to compare quality information, you know, what are the outcomes. they have the ability to go to the place that they think in their you know, with help of you know, lots of electronic and in-person expertise and other That they think is going to be the best decision for themselves and their families. And I hope that also results in competition, lowering prices, and providers of all types and insurance companies thinking differently
Andrew Gordon: Mm.
Randy Pate: about how are we going to get to value? How are we going to start, you know, not only just cutting costs, but improving quality at the same time. And
Andrew Gordon: Yeah, just have a
Randy Pate: I think it can be done. I think there’s a lot of progress that can be made. I don’t think any of it’s easy necessarily.
Andrew Gordon: Yeah.
Randy Pate: but five years, you know, I hope we’re I don’t think we’re gonna be there a hundred percent. But I hope we’re you know, we can all look back and say, hey, it’s different now.
Andrew Gordon: It’s a process and it’s a long game, especially in an area that’s as complicated as this one. But certainly have to pay respect to all the growth that we’ve had seen and all the growth that we expect down the pipe. And it makes a lot of sense that we want to move toward that world where people are being able to make those decisions in a very upfront, clear, controlled kind of way, because we all have budgets. We all have a certain
Randy Pate: Yeah.
Andrew Gordon: amount of money that we’re looking to or expecting to spend. And so we need to make sure that We’re catering to that as best as we can. Obviously, there’s a lot of emergency care and there are certain things that are nuanced in nature, which are very tough to predict ahead of time. But there are other things to your point with using examples like radiology or lab work or other things that fit that narrative really well. What would you tell a listener who wants to put this data to work on Monday and they’re not exactly sure where to start?
Randy Pate: That’s a good question. I mean, I would not recommend going and downloading the you know, the just the straight JSON files, which are the you it’s sort of like an Excel file but, you know, much more difficult to download. I would not recommend doing that. I would there so there are s states, for example, where you can go and they have their own tools to look up things. So for example, if you’re in the state of Indiana, you can go to a website and I don’t have the link, I can I can get to you, but the website allows you to type in your provider that you’re thinking of, and then the procedure, and then see what the prices are. It even has a map where you can compare providers. I played around with it. You know, there are a lot of private companies that have similar versions of that out. and so
Andrew Gordon: No.
Randy Pate: honestly, it is something you can really, you know, depending on the service that you’re that you need, you know, you can actually get. out there and play with it and but then I would also say when you have that price you should probably also
Andrew Gordon: Cool.
Randy Pate: call whoever it is you’re thinking about at least maybe we get down the two call them and make sure that’s that’s accurate but honestly it a lot of it’s out there now and it is it is usable it’s just I think you have to I think we
Andrew Gordon: Well, exactly.
Randy Pate: have to get the word out and we have to get people used to using
Andrew Gordon: Mm.
Randy Pate: these tools right and I think they’ll continue to get better but you know right now most people don’t even know Yeah.
Andrew Gordon: For sure. Randy, there was a lot that we covered from the origination of things through to what we’re seeing today and then now where it’s going. Anything else that you want to share with the audience? Maybe something I neglected to ask you or just something that comes to mind relative to what we’re seeing in this space?
Randy Pate: No, I mean I guess I just I just try to think about this in terms of you know, this is information that any other market that we’re we just take for granted, right? We don’t even think about the fact that, you know, all of these technologies that we rely on for, you know, whether we have computers in our cars, we have, you know, computers in our hands, we have all of this advanced technology that we’re using on a day to day basis and we’re we know how much it costs and we’re able to make decisions. about, you know, people are smart. You know, they’re not, you know, they’re not just sort of mindless sheep. They will make a decision, usually a very good decision, based on value, and they can figure that out. We just have to get the information to them in a way that is usable. And I know we will
Andrew Gordon: Yeah.
Randy Pate: see positive results. I’m positive, absolutely sure of that.
Andrew Gordon: Wonderful. So for those who are interested in reaching out to you after this episode, where would you direct them?
Randy Pate: Sure, you can just it’s a long email address but for my company, but it’s just randy at randolphateadvisors.com and that’s r-n d olp. But be happy to or you can visit my website, www.randolphateadvisors.com and contact me that way.
Andrew Gordon: Sounds wonderful. Randy, it’s been a pleasure. Thanks so much for coming on.
Randy Pate: Thanks Andrew. Really, really appreciate it. Enjoyed it.
Andrew Gordon: Alright folks, that’s a wrap on this episode of the Price of Healthcare. We look forward to seeing you on the next one.