Price Transparency Matters to the Consumer Healthcare Experience

A Consumer-Centered Health System

May 9, 2025

The Importance of Price Transparency

Healthcare products and services are one of the few things that consumers in the United States pay for without always being able to easily estimate the costs in advance. Numerous studies show significant variations in hospital prices in local areas. The same procedure performed by the same care provider in two different hospitals may incur two different total costs for a number of reasons. Hospitals can negotiate different rates with different payors. In some facilities, costs from all professionals are negotiated into one rate, while in other facilities, all involved care professionals bill separately based on their individual negotiated rates.

Bringing more price transparency into the healthcare system can improve consumer experiences and help ease the financial burden on individuals and families. It can also decrease anxiety, especially for people who need to meet a deductible before their health plan pays part of a procedure’s cost, like for those enrolled in high-deductible health plans (HDHPs). At least 89% of consumers are willing to shop for at least one type of care, if they are given the option.

A Challenge with Price Transparency

The price for an entrée in a restaurant is clearly stated on the menu. There isn’t a separate charge for the cost of the ingredients, the salary of the chef who prepared it, or the servers who brought it to the table. They all work for the same restaurant and those costs are factored into the menu price.

But with healthcare, even the simplest procedure, like receiving a routine vaccination, can require multiple billing components. The care provider will submit one bill for the cost of administering the vaccine and another bill for the cost of the vaccination material itself.

When Stella has her knee replacement surgery in the hospital, many different care providers will be involved. They do not share the same employer, so each of the following components of the surgery could be billed separately:

Orthopedic surgeon for performing the surgery and providing the knee replacement materials
Anesthesiologist to administer the sedation medicine and monitor Stella’s vital signs
Cost of using the operating room
Cost of medications given before and after surgery
Cost of the patient’s room for each day Stella remains in the hospital
Charges for in-hospital physical therapy received after surgery

Separately billed components, like those above, can cause consumers confusion when they are trying to determine their share of the total cost of care. Just providing the orthopedic surgeon’s costs ahead of time would not provide an accurate estimate. It’s not reasonable to expect an individual to collect the price estimates from several different entities prior to getting surgery, which can increase anxiety ahead of surgery. So how might the costs related to Stella’s knee replacement be pulled together into one place as if an entrée on a menu?

Leading the Creation of an Online Price Transparency Application

Stella’s concern was alleviated when her daughter told her she could view that information on her health plan’s secure member website. As a member of an Elevance Health-affiliated plan, Stella had access to all the information she needed – including the total cost of the procedure and her share of the costs. She found this information by visiting the “find care” button of the plan’s website and app and typing “knee replacement.”

Elevance Health’s affiliated health plans operate on the principle that an informed consumer is more likely to have better healthcare outcomes. Transparent pricing helps people anticipate healthcare costs, allowing them to plan for their expenses. When consumers and their care providers know what to reasonably expect for the cost of care, they can incorporate price and quality information into decisions about when and where to get healthcare, improving healthcare value.

As early as 2010, a collection of Elevance Health’s affiliated health plans worked together to develop a price transparency application that would bring accurate, relevant, and local data based on actual claims.* At that time, providers were also identified by quality designations, whether those were industry recognition, provider network recognition or recognition from the affiliated plan.

How Carelon Helps Make Healthcare Costs More Transparent

The EnsureRx savings program automatically compares prices of select covered generic medications against a variety of cash discount cards and applies the lowest cost for consumers at the pharmacy counter. EnsureRx allows members to save on more than 50 generic medications that are typically used by consumers with a discount card. Medications filled under the EnsureRx program will still count toward a member’s deductible and out-of-pocket maximum.

Another Carelon program for employer-sponsored health plans helps members compare costs between facilities when their care provider recommends certain high-tech procedures. The program helps members find the higher-value, lower-cost facility options and provides appointment scheduling assistance.

Since then, these health plans have been providing total cost estimates for procedures. Their online price transparency application rolls up the different cost components to provide the estimated full cost for procedures. Members also can easily understand their financial responsibility based on their specific benefit plan by seeing how costs vary when performed in different care settings near them — such as in a physician’s office, in the hospital, or in a surgical center.

Complying with Federal Regulations

A series of federal regulations has been passed in recent years to bring more price transparency to the entire healthcare industry, including:

2021: Hospitals are required to post prices online for services like X-rays and medical tests, as well as to establish a consumer-friendly price list for 300 standard procedures and services that make it possible for a consumer to search and plan around.
2022: Health insurers and employers must post negotiated hospital and care provider rates, billed charges, and allowed amounts paid to out-of-network providers.
2023: Participants, beneficiaries, and enrollees (or their authorized representatives) must have access to personalized out-of-pocket cost information through an internet-based self-service application and in paper form. This information must be furnished upon request for 500 covered items and services designated by the U.S. Centers for Medicare and Medicaid Services, such as X-rays and colonoscopies.
2024: Cost estimates must be available via the internet-based self-service application for all service codes.

Elevance Health’s affiliated health plans modified their secure online price transparency application to provide the required information in its mandated formats. As noted above, the federal regulations require health plans to list their negotiated rates or allowed amounts with care providers and the consumers’ share of the cost in the self-service application.

Unlike the Elevance Health-affiliated plans’ price transparency application that presents all services and costs associated with a procedure (surgeon fees, anesthesia, in-hospital pharmacy, etc. for a knee replacement), the federally mandated format requires each service to be listed individually. As a result, consumers must identify and search separately by service code or procedure description for all services associated with a procedure to determine their total cost.

To gain an accurate estimate of what the consumer can reasonably expect to pay under the federally mandated format, the procedure description and service code must be exactly what the care providers use to submit their bills. As a result, consumers must be able to understand and navigate billing codes and medical terminology across three primary sources:

Current Procedural Terminology/Healthcare Common Procedure Coding System codes (CPT/HCPCS) primarily for outpatient services
Diagnostic Related Grouping codes (DRGs) primarily for inpatient services
Current Dental Terminology codes (CDT) for dental services covered under healthcare plans

However, the Elevance Health-affiliated plans’ price transparency application that presents all services and costs associated with a procedure (based on claims) is available to Elevance Health-affiliated plan members.

Increased price transparency provided by Stella’s Elevance Health-affiliated health plan alleviated her concern about her knee replacement. The easy-to-use online resource can help all members budget for their healthcare costs and shop for value. Meaningful healthcare cost transparency helps build trust, reduces surprise costs, manages expectations, and improves healthcare experiences.

* The health plan transparency application is powered by historical claims data.