Governor Charlie Baker may ask the Legislature to pass laws to push health care providers and insurers to make their prices more transparent, he said Monday, an effort that could lead consumers to choose lower-cost hospitals and keep overall health care spending lower.
Studies have shown that prices for medical services vary widely at Massachusetts hospitals.
“It’s always troubled me that if you’re a low-cost, high-value, high-quality player in health care, there’s really no way for anybody to figure that out about you,” Baker said. “We’ve got to do more in the whole transparency piece if we want to be successful.”
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Baker, speaking at a public hearing of the Health Policy Commission, said he has been focused on other issues since becoming governor in January, but “you can expect to see us get a lot more aggressive about the transparency stuff in 2016.”
He stopped short of calling the market dysfunctional, a term used by Attorney General Maura Healey in a report last month that said some hospitals charge far more than others for essentially the same quality of care. Healey said price disparities, if not addressed, could push health care spending increases above the state’s target of 3.6 percent a year.
The Health Policy Commission, a watchdog established in 2012 to monitor costs, kicked off two days of hearings Monday. Public officials and health care executives are scheduled to testify about what factors drive health care spending higher and what they are doing to control costs.
Baker campaigned for greater openness in health care pricing, but his administration so far has focused on other health care issues, such as the opioid epidemic and Medicaid costs. Speaking to reporters Monday, he said he’ll “push for whatever we can do administratively . . . and whatever we can’t get to there [on price transparency], come back to the Legislature on.”
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Lora M. Pellegrini, chief executive of the Massachusetts Association of Health Plans, which represents insurance companies, welcomes additional transparency. “It’s important for patients and policy makers to see the price differences among providers in a really stark way,” she said.
But Lynn Nicholas, chief executive of the Massachusetts Hospital Association, said the area sorely in need of greater transparency is the pricing of drugs, rather than of hospital services.
The costs of prescription medications, while a small percentage of overall health care costs, are rising sharply. Drug spending soared 13 percent in Massachusetts in 2014, while overall spending rose 4.8 percent, according to state figures.
“We need the same kind of deep dive in pharma spending,” Nicholas said.
Baker has not backed a proposal by the Service Employees International Union to level health care payments by slashing reimbursements to the highest-paid hospitals and raising reimbursements for the lowest-paid.
“Transparency is part of the solution, but it’s not enough,” said Veronica Turner, a member of the Health Policy Commission and executive vice president of the SEIU’s Local 1199, which represents 52,000 health care workers in Massachusetts.
A 2012 state law required the Center for Health Information and Analysis, a state agency, to establish a website where consumers can see health care prices from different providers, but that site has yet to be established.
The law also required hospitals and insurers to provide price information to consumers who request it, but the Pioneer Institute, a Boston think tank, has found that many hospitals are “flummoxed” by questions about the prices of services and take several days to respond.
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Priyanka Dayal McCluskey
can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.