Bridging the Gap: How Price Transparency Can Drive Growth & Affordability in Healthcare

​The healthcare industry is at a critical crossroads. As we move into 2025, two seemingly conflicting themes are shaping the landscape:

• Growth & Expansion: Healthcare organizations are looking to scale, increase revenue, and enhance services.
• Consumer Affordability: Patients and employers are struggling with rising costs, demanding greater transparency and cost-effective solutions.

For many, these themes feel like opposing forces. How can healthcare organizations grow while keeping healthcare affordable? The answer lies in price transparency—a shift that is already underway but still faces significant challenges.

According to Deloitte’s healthcare outlook, nearly 50% of healthcare executives say healthcare affordability is one of their top concerns. At the same time, more than half of working-age adults in the U.S. report difficulty affording their medical expenses. Clearly, there’s a problem. And as we look ahead, one thing is certain: Price transparency will play a critical role in shaping the future of healthcare.

The Growing Demand for Price Transparency
Opaque pricing in healthcare has left patients and employers struggling with unpredictable costs, delayed care, and mounting medical debt. Now, both groups are demanding a more transparent, consumer-centric approach.

• Employers Are Driving Change: Rising premiums and out-of-pocket costs have companies rethinking their strategies. A CFO survey on health perspectives found:
  • 67% worry about escalating healthcare costs
  • 48% seek alternative payment models
  • 42% prioritize partnerships with price-transparent providers
    
    
• Patients Are Feeling the Strain: With 57% of U.S. adults struggling to afford care and over 100 million facing medical debt, cost concerns are delaying treatment and increasing financial hardship. Payers that embrace price transparency and data-driven strategies can stay ahead of this shift—delivering affordability, trust, and better engagement.

Federal Regulations: A Step Toward Transparency
Recognizing the growing need for price clarity, the federal government introduced two landmark regulations aimed at increasing transparency:

• The Hospital Price Transparency Rule — Implemented by the Centers for Medicare & Medicaid Services (CMS), this rule requires hospitals to disclose their prices for medical services. The goal? Empower consumers with cost information before they seek care.
  
  Despite these requirements, compliance has been slow. A study by Patient Rights Advocate found that only 16% of hospitals fully complied with the law. To enforce transparency, CMS increased financial penalties with the aim to push hospitals toward full compliance, ensuring that pricing information is truly accessible to consumers.
  
  
• The Transparency in Coverage Rule — While hospitals must disclose their rates, insurers and health plans also play a role in cost transparency. The Transparency in Coverage Rule requires public disclosure of in-network negotiated rates, out-of-network charges, and prescription drug prices. This rule also requires a user-friendly online tool for consumers to view cost estimates for common medical services.
  
  This rule equips patients with critical cost information before they receive care, enabling smarter financial decisions.

Challenges & Roadblocks
While price transparency regulations represent significant progress, the reality is that the healthcare industry still has a long way to go. Three key challenges remain:

1. Lack of Full Compliance: Despite federal mandates, many hospitals and insurers have been slow to comply due to technical barriers, resistance to change, and minimal enforcement. Hospitals cite difficulties in extracting and formatting price data, while some argue that full transparency could impact negotiated rates with insurers. Additionally, earlier penalties were too low to drive widespread compliance, though enforcement has recently increased.
   
   
2. Data Complexity & Consumer Confusion: Even when pricing data is available, it's often difficult to understand due to variations in pricing across providers and regions, differences between billed charges and negotiated rates, and the complexities of insurance coverage affecting final costs. With standardized, user-friendly presentation formats, price transparency loses its effectiveness, leaving many consumers confused and unable to make informed healthcare decisions. 
   
   
3. The Need for More Comprehensive Cost Estimations: Current regulations focus on service-level pricing but also fail to account for total costs, including ancillary services like anesthesia and lab work, post-care expenses such as follow-up visits and rehab, and insurance complexities like co-pays, deductibles, and out-of-network fees. Without holistic cost estimates, consumers may still face unexpected financial burdens, limited the effectiveness of price transparency efforts.

What’s Next?
Despite challenges, the momentum for affordable, transparent healthcare is growing. As we look toward 2025 and beyond, several key trends will continue shaping the industry:

• AI and Data Analytics for Price Transparency: Advanced technologies like AI-driven pricing tools will help simplify cost estimates, offering real-time pricing comparisons across hospitals and insurers, personalized cost predictions based on insurance coverage and a clear breakdown of out-of-pocket expenses.
  
  
• Increased Consumer Engagement: More patients are becoming proactive healthcare shoppers, leveraging employer-provided transparency tools, independent price-comparison platforms, and direct-pay and cash-based pricing models for lower costs.
  
  
• Stronger Regulatory Enforcement: As compliance improves, expect harsher penalties for non-compliance, stricter guidelines on pricing disclosures and more oversight on insurers' pricing data accuracy.

The healthcare industry cannot afford to ignore the call for affordability and transparency. Hospitals, insurers, and policymakers must work together to ensure that pricing information is accessible, understandable, and actionable for consumers.

By embracing data-driven pricing, patient empowerment, and regulatory compliance, we can create a fairer, more sustainable healthcare system—one that prioritizes both growth and affordability.

Learn more about Perspecta's Price Transparency solution

DOWNLOAD