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 in Coverage, individual coverage health reimbursement arrangements, and Section 1332 state innovation waivers.
Andrew Gordon: Randy’s worked on this from many different seats: public health counsel for House Energy and Commerce, health counsel 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 MITRE’s policy work with CMS and spent six years running public policy for Health Care 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. I really appreciate it. Thanks for that very nice intro.
Andrew Gordon: 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, what the original theory was, and 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. The fact that I’m calling it a great question is even an oddity when you think about every other sector of the economy: computers, cars, houses. I even went to a seminar one time where somebody said you can literally go online and find the price of a fighter jet, but you can’t find the price of an MRI or the price of a hip replacement.
It’s very difficult and pretty much impossible to do that. The problem is that if we want health care to operate anything like a real market, we have to have the prices. And the prices are not sufficient to have a real market. They’re not automatically going to solve everything about the health care system in our country, but it is a necessary precondition to pretty much anything else.
If you don’t have prices, you’re not going to 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, the tradeoffs that we all make between price and value when we shop for everything else. So if we don’t have prices, we’re never going to get to those other aspects of consumerism that make so many other products that we buy so great, and that we take for granted.
Andrew Gordon: Great points, and I do think there are 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. Going back to some of the earlier language, informed choice, being able to really know beforehand what it is that we are looking to receive and what the price attributed to that is. What’s the value exchange going to look like?
So you talked a lot about consumerism. 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 the combination effect that was aiming to happen from a lot of this initial thought and direction?
Randy Pate: I’ll just speak for myself and my own evolution on this topic. I come from somewhat of a payer background. I worked for Blue Cross Blue Shield, HCSC, and it’s five states, Blue Cross plans.
And I have that mindset. At the same time, I don’t only come from that mindset. I also try to think about the provider perspective, the patient perspective, the device manufacturer, the drug makers, all of it, because it’s all important to how the whole system functions or doesn’t function.
But when I go back even before price transparency, the regulations and the executive orders and all of that, I think about how, unfortunately, we’ve had some accidental steps in our health care system’s development, all for very good intentions over the years, but they have caused some problems that we’re now really seeing come to fruition. We spend almost 20 percent of our GDP on health care, which is much higher than any other developed country.
Randy Pate: We have really good care. 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 the quality, we don’t know what we’re getting a lot of times before we go in.
These are problems that didn’t just come about in 2019 when we were starting on this path to this regulation. It goes back to World War Two, post-World War Two, when the IRS came out and said any health care or health insurance that is provided by an employer is tax-advantaged.
So it was basically not taxed by the federal government, whether on the employer side for the contributions they make to the employees’ premiums or on the employee side. And out of that, it became this benefit that came along with employment. And I think that’s a good thing.
Randy Pate: It has a lot of good aspects to it. But when people think about health care and health insurance, it’s almost like you get to buy a ticket to Disney World. Once you get that ticket — it’s not true anymore, but it used to be that when you got your ticket to Disney World and went in and rode the rides, you got to ride all the rides for free.
And so it’s this thought process that we’ve been under for a long, long time, where health care is just something that, I’ve got my insurance card, I go in, and everything should be free.
I’m not saying that I think people love to go to the hospital and ride an MRI machine like a roller coaster. I’m not saying that. But from an economic incentive perspective, it turns things in a bad direction. In other words, it’s something that somebody else pays for. It’s not something I have to think about.
Randy Pate: And of course, then we’re like, well, who wants to have costs be a barrier to their care? And that’s true, except now we’re seeing health care year after year outpace inflation in the general market.
Whereas inflation most years is a couple of points, three percent, maybe four or five percent in a really bad year, health care can be regularly seven, eight, nine percent growth, and that just is not sustainable.
So we have to figure out some way to deal with it. Now, along with that has been this whole fee-for-service model that our health care 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.
Randy Pate: Well, nothing wrong with that either. It’s the most logical way to structure something.
However, it does happen to often carry the incentive that the more care is delivered, regardless of whether that care is good or bad, the more the provider gets paid. And now we’re seeing the system for the last 30 years has been trying to get away from that.
With things like health maintenance organizations, ACOs, whether it’s upside and downside risk for the providers, there are all these ways to dance around, in my opinion, consumerism, which is where the rubber hits the road. I’m using my money, I make my decisions, I’m making those tradeoffs, and there’s nobody better suited than me to do that.
Randy Pate: So, very long answer. But I think it’s important as a foundation, because price transparency doesn’t solve all of these other issues that we’ve been living under for a long time in our health care system. But 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 2019 executive order set this in motion. Walk us through what happens between an order landing on a desk and a final rule going out the door.
I feel like there are a lot of listeners who aren’t really sure what this process looks like.
Randy Pate: 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 over there, they’re at the top of the mountain in terms of federal government. And you’ve got all those agencies, and we’re all doing our work. We have our programs and our policies, and we’re carrying things out.
And the first reaction when an executive order like that comes down, someone calls you or you get a text or an email, and the first reaction is panic. Like, oh no, what do I have to do? But in all seriousness, I came from a payer background, and sitting in my seat, I’d always thought, well, prices and a negotiated rate between hospitals and health care plans, or between doctors and health care plans, that’s a matter of contract.
It’s private contract. And that’s part of the value that health insurance companies bring, that they’re able to negotiate lower prices because they bring a lot of membership, a lot of patients, to that provider. So my mindset was that these prices are a contractual arrangement.
Randy Pate: And now we’re going to have to start requiring the companies to disclose their secret sauce for how they put together their networks, how they make prices attractive, how they maybe give a little here and take a little more there to get to your product that people buy. And so I would say I had a strong bias against the government intervening and saying, OK, we’re going to open up the doors on this. But then I would just say, as a team at CMS, we knew this executive order is coming down. We need to comply with this.
And so we started doing research. We started holding listening sessions with different players. And that’s one of the great things about being in the federal government, is you can really be a convener and hear all these different perspectives. We heard from patient groups, insurance companies.
We heard from employer groups that are sponsoring care for big employers like Lockheed Martin and Walmart, these big players. And we heard from all across the sampling of these different groups.
Randy Pate: The message that we started to hear was, it’s not easy. There could be some pitfalls with doing this. It would be very burdensome on insurance companies to do this.
But particularly the employers were really interested in getting this data, because they believed these were things that had been hidden behind a wall for them for so long. They were basically contracting out for these health care services with third party administrators and for the members, and then they couldn’t receive that feedback on, well, what is the price we’re paying for this episode of care, for this service?
And as purchasers, they could really move the needle if they had that data, if they had that information. So I would say that was one of the things that really changed my mind about doing this regulation. And then from there, I would say it is a lot of teamwork.
Randy Pate: We worked with federal partners. We had the Department of Labor. We had the Treasury. We had, of course, experts at CMS. And then we had our White House, and they’re like a quarterback, coordinating the whole thing.
So my team took the lead on the drafting of the regulation, the proposed rule. First we put out a proposed rule and then you get public comment on it. So I would say very deliberative process.
We’re doing listening sessions. We’re meeting together as a federal partnership across all the different agencies, putting out a draft of something we think is a starting point, taking into account all of the public comments, all of what the public has to say in writing, and then issuing a final rule.
Randy Pate: And I’ll still say, in an area as complicated as price transparency, and something that had never been done before, even with all of that, we knew we were going to miss on a lot of things. And we knew that we were taking a stab in the dark on a lot of things. So, really complicated area.
But we wanted to start down the pathway 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 percent on the complexity of things, it can be very difficult. Pricing in health care, 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 out of 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 having it really happen for the first time. 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 claims that they have and put them in a format that can be published. And it was two things.
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 can go in and put in the service I want and then see, OK, is this in network? Where am I on the deductibles? How much out of pocket am I likely to get? So we really updated how those were supposed to operate.
Randy Pate: I would say one of the biggest rewards out of it was after I’d left the administration, when the regulations started to be effective. There was a final regulation and then they became effective starting about 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 got something right.
There was a lot of doubt, I would say, that we were going to get anything at some point, just because it had never been done before. But we started getting data. We started seeing companies post their rates. You could go online, whether they were readable or not. We’ll get to a whole other story.
But I would say those are the two biggest things, was just getting started, and then actually seeing the numbers start to come out.
Andrew Gordon: There’s a 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 process as we’re thinking about that and moving into how the legislation and the rules started to really get traction, get teeth.
It 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 was about what I would expect for the complexity of what was being undertaken. So, just for example, there have been a lot of problems with the data, especially the first round. Some of these files were terabytes, or bigger than terabytes, really big. So, me on my laptop, I don’t know if I have that kind of storage space or computing power to be able to download something like that.
And remember, it was before AI tools came out, before they really hit it big. And so there wasn’t any ability to, like ChatGPT, take all of this data and just make it really clean. I think we’re getting there, but I still don’t think we’re there yet. But we knew there were going to be hiccups. And so we actually started off and said, look, insurance companies, you don’t have to put out all of your negotiated rates yet. We’re just going to do the 100 most shoppable services.
And we went to a list that existed in Medicare, the services that were most susceptible to consumers being able to shop and compare. And the easy thing that always comes to my mind is MRI imaging. There are imaging centers and they are located in a lot of different places.
Randy Pate: And you can shop and compare lab work, things like that, where they really are considered more shoppable. And then after that, the second phase was, OK, now you have to do everything. So, again, the data still has a long way to go.
And I will say the other thing is, we knew that people weren’t going to be able to pull all this down on their laptops, as it was, or on their smartphones. But we believed, and we are still hoping, that third party developers, companies out in Silicon Valley and smart kids with their computers, will be able to come up with tools that would allow you to have your smartphone in the doctor’s office and be able to say, hey, I know you’re telling me I need this, and you want me to go to this provider, but that’s going to cost five thousand dollars, and this one over here costs a thousand. What do you think? These types of conversations that we just don’t have today. Some people say, well, you shouldn’t bring price into the conversation about health care, because it’s your health.
But again, that’s just not how we do anything else. Even exercise classes or vitamins or supplements or gym memberships, going to the spa, people make these value judgments all the time. And just interjecting a little bit of that into the thought process, I think we’ll have an outsized impact in the long run.
Andrew Gordon: There’s a lot to be said for that 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, 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 question. So just going back, one other thing on the machine readable files. I think another area where the team really hit it out of the park was the use of GitHub.
So when we talk about a machine readable file, you have to have a schema, or basically a design for how each data element should look and where it should be placed. And the federal government, for the first time ever in my knowledge, used GitHub as a place for guidance and instructions to be issued on this, and then for the health insurers mostly, the tech people, to come on and ask questions.
So I cannot take credit for it at all. My team came up with it. I’d never used GitHub before.
Randy Pate: I have since started to use it. But that’s another exciting thing I just wanted to throw out there. I think, honestly, Andrew, people are so jaded about our government a lot of times.
And I would just say, 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, and the government has never really done before, but now is something that has been in place for six, seven years that people are using, and it’s still evolving.
Randy Pate: But to get to your actual question, I will say we’re still not there yet at all on the translation between what a negotiated rate is before a service happens versus what the final payment is. There’s legislation out there, for example. And I know the federal government on the executive branch side is pushing towards, OK, if you have a starting point, let’s say you’re doing something like a value based care arrangement or an alternative payment model, where instead of a fee for service, you’re saying, OK, we’re going to measure outcomes, or we’re going to put some sort of incentive payment on the back end for controlling costs. 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.
Whatever you’re doing, your percentages, 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. That’s something that is not there yet.
But 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. The dollar amount.
Andrew Gordon: Right. The methodology, the standardized schema, the fact that the schema is hosted in GitHub and has 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: 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, having to have that name, that officer, sign their name to it, it doesn’t guarantee accuracy. It just creates a little more attention within the organization. You’re going to tend to have real lines of accountability when you do have to have an officer sign like that.
So I think it’s a good thing. You could always have inaccuracies. They could be for good faith reasons. Occasionally you could have intentional gaming of it. I don’t think that’s going on for the most part. I just think that’s another little reminder for these organizations, some of whom are huge. They have big staffs, big divisions and everything. Just to create some of those lines of accountability and make sure that somebody is getting briefed up, and when they put their name on it, they feel confident that they’re not going to have egg on their face.
Andrew Gordon: For sure. Speaking of the penalties, CMS has issued roughly 27 penalties since enforcement. Ten of them were last year, I believe, ranging from thirty thousand dollars to just over three hundred thousand.
Over a thousand 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 with any type of new regulation like this, you have to balance a couple of things. 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 if you have a lack of compliance, you’re never going to 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, all these important questions.
You never get the benefits of the rule unless you have enforcement and you have compliance. But at the same time, as I mentioned, it’s extremely difficult for a lot of the carriers that have legacy IT systems. For example, you have a lot of acquisitions. A large insurance company goes and acquires a smaller one that has maybe some antiquated systems, or the systems won’t talk to each other. And those types of things can create a lot of costs as you’re trying to comply with something new like this. And so we wanted to take a very light hand to begin with, but over time, the expectation clearly is that we want to get to full compliance and we want to make sure that the intent of the rule is carried out.
And so I think now you’re seeing even more focus on compliance. Congress is even looking at increasing penalties and that sort of thing. A number of states are moving in that same direction.
Randy Pate: 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. It’s all part of the push to get towards true price transparency.
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 price transparency and then the insurer with the Transparency in Coverage rules. What’s your read on the quality of the information that’s coming out of these files? If you want to speak to each of them separately, or just in general, would love to get an understanding of where we stand.
Randy Pate: So honestly, I think there’s still a long way to go. I think we’ve also come a long way. I’m not a data scientist and I’m not out there downloading JSON files and things like that, but just from 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 what the files should contain, what the data should look like, last fall. And they said by early this year, we’re going to start enforcing that. And I just did a little spot check of some of the biggest carriers, pulled up some of the files.
And whereas in the past I was completely lost, this time I would say I was a little bit less lost. It did feel like this looks cleaner. This looks more, I can keyword search and things, and it is actually bringing up something that makes sense.
Randy Pate: I think there’s a proposed rule that CMS has out now that goes even further in cleaning up the data, reducing the file size, getting rid of some of the redundancy in some of the files. So that’ll be another big step when that comes to fruition. But I think it has gotten much better 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 were certainly at the forefront, were top of mind when drafting this, and were also engaged in those discussions and the public commentary that’s coming in. Tell me a little bit about how they have shown up. Are we noticing that it is a small circle of sophisticated plan sponsors?
Is it more widespread engagement? What are we thinking in that department?
Randy Pate: I think there’s a lot of dedication and fervor to get this done and to do it in a way that has impact, that really moves the needle. I think it’s one of these very tough problems, and 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 environment really that we’re trying to create with price transparency. But I mentioned the employer groups before. I think they’re continuing to push from their perspective.
I’ve been struck by just the number of technologists and the data science people that are working at some of these companies. They are on top of this. They know every aspect of the MRFs.
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, how that should be displayed?
Randy Pate: 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 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 the stakeholder community I think has been really engaged, and it’s only getting more engaged, and I would say at a more detailed level, as these files continue to evolve. And so that’s been really interesting to see. And I would say when you look at the polling on this, it’s a bipartisan issue, it’s a nonpartisan issue, really. And 90 percent of Republicans and Democrats together agree that we need this.
So it’s one of these things where I don’t know if there’s any other issue across the whole spectrum, whether it’s domestic policy or foreign policy, where there’s that level of support. So let’s hope that our leaders, the Congress and the administration, listen and really follow through on it.
Andrew Gordon: I want to parlay off that comment with the bipartisan support, and excellent points to 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, I think a lot of it’s frustration, just to be honest. I think there’s just a lot of baffling things. I’ll just say, thankfully I have not used a lot of health care.
I’m a health care person, but I hate to go to the doctor. But I had to go for a checkup a few months ago. And I got a bill afterwards and I thought, well, that should be zero out of pocket, because the part of the ACA that says preventive care, there’s no cost sharing. But I got a bill. So I click on it and 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’s one hundred dollars. That’s the bill. OK, what’s that? I click on it to find out what it’s for.
Randy Pate: And it just says pay us a hundred dollars. Basically no information, nothing about why, what. And so I think people are frustrated with that. There’s no other system like that. But even some of the most frustrating consumer-facing systems out there, you think about some of the telecommunications things, trying to get your cell phone service, figure out how much your bill is.
There’s more transparency in that, or cable, or the airline industry, all of these, so much more transparency in that than there is in health care. And so I just think people are, then multiply that little problem, that little tiny problem I had, for some people multiplied by thousands and thousands of dollars. And not only that, but they’re in a situation where they had no idea going in it was going to cost anything like that. So I honestly think frustration is one of the biggest causes of it.
But I also think that people do realize that one way or another, it’s up to all of us individually. We can’t continue to punt and hand off personal decisions. We have information now.
Randy Pate: 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 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.
What are the outcomes? They have the ability to go to the place that they think, with the help of lots of electronic and in-person expertise and otherwise, is going to be the best decision for themselves and their families.
And I hope that that also results in competition, lowering prices, and providers of all types and insurance companies thinking differently about how are we going to get to value? How are we going to start not only just cutting costs, but improving quality at the same time?
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, but in five years, I don’t think we’re going to be there 100 percent, but I hope 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 we certainly have to pay respect to all the growth that we’ve 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 able to make those decisions in a very upfront, clear, controlled kind of way, because we all have budgets, we all have a certain 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 would not recommend going and downloading just the straight JSON files, which is sort of like an Excel file, but much more difficult to download. I would not recommend doing that.
So there are 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 get it to you, but the website allows you to type in the 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. There are a lot of private companies that have similar versions of that out. And so, honestly, depending on the service that you need, you can actually get out there and play with it.
Randy Pate: But then I would also say, when you have that price, you should probably also call whoever it is you’re thinking about. At least maybe when you get down to two, call them and make sure that that’s accurate. But honestly, a lot of it’s out there now and it is usable.
I think we have to get the word out and we have to get people used to these tools. And I think they’ll continue to get better. But right now, most people don’t even know they exist.
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 just try to think about this in terms of, this is information that in any other market we just take for granted. We don’t even think about the fact that all of these technologies that we rely on, whether we have computers in our cars, we have computers in our hands, we have all of this advanced technology that we’re using on a day to day basis. And we know how much it costs. And we’re able to make decisions about it. People are smart. They’re not just 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 information to them in a way that is usable. And I know we will 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, it’s a long email address. It’s just Randy at RandolphPateAdvisors.com. And that’s R-A-N-D-O-L-P-H. Or you can visit my website, www.RandolphPateAdvisors.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: All right, folks, that’s a wrap on this episode of The Price of Healthcare. We look forward to seeing you on the next one.