ACR Bulletin

Covering topics relevant to the practice of radiology

Price Transparency: Progress or Problems?

Consumer price listings may ultimately give consumers less of what they really want — high quality care.
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From an economic perspective, price elasticity in healthcare is and should be a function of quality.

—Elizabeth Y. Rula, PhD, executive director of the Harvey L. Neiman Health Policy Institute®
April 21, 2022

A lack of transparency in pricing is a longstanding problem that impedes patients from understanding their costs and using that information in healthcare decisions. Approximately two out of three bankruptcies in the United States are related to healthcare, amounting to half a million families bankrupted each year.1

CMS has been tackling this issue since 2019 after it became a policy priority under President Donald Trump. Jumping forward to 2021, hospitals were required to also disclose their payer-specific negotiated rates, discounted cash for uninsured patients, and provide a consumer-friendly tool to facilitate comparison of prices — including out-of-pocket costs — for 300 “shoppable services” that can be scheduled by healthcare consumers in advance. Penalties for non-compliance with the policy were a nominal $300 per day.2

While transparent pricing is theoretically ideal for allowing patients to make informed decisions, the complexity of healthcare in the U.S. makes a truly transparent system a challenge and there are numerous caveats that can limit the utility and value of progress made to date. At a high level, these include:

•Patients may have a limited understanding of medical billing and mechanisms to determine prices
•Price disclosure is for individual services, with no option for patients to see the total cost of care
•Cost comparisons to do not include variation in quality of a service1

These issues result in a high likelihood that patients decide on their care based on what they think is a lower price, but then ultimately find out about other charges, making out-of-pocket costs higher than anticipated. Furthermore, these additional costs may vary by hospital, thus negating the benefit of comparison shopping.
Radiologists and other specialties are particularly concerned about the quality issue. For the consumer, comparison shopping is not only about price — it is about value, which also considers the quality of the good or service, as well as the consumer experience. The focus on price alone frames imaging as a commodity, equivalent at any site and from any provider. Of course, variance in quality occurs in all areas of medicine due to myriad factors, such as physician training, experience, protocols, and technology — which can directly impact quality of care. The factors that can impact patient experience are even broader.

These factors give way to the concern that making prices transparent without clear and accurate quality data could backfire and disincentivize quality care. To remain competitive on price, hospitals are pressured to reduce the higher cost of delivering a higher level of care.

From an economic perspective, price elasticity in healthcare is and should be a function of quality.3 Fortunately, patients understand this dynamic interplay between price and quality. Two recent studies explored this issue using lumbar spine MRI — a common exam for low back pain and one of the named shoppable services. The first study looked at how patients weigh the relative importance of quality versus cost for an MRI in the hypothetical scenarios of mild or severe back pain, and specifically whether they are willing to pay more out of pocket for higher quality care.4 Across the board, a majority of patients thought the measures of quality (accuracy, doctor recommendation, or online rating) were as or more important than cost. Surveyed patients were willing to pay from $380 to $1,400 more for the MRI if they were getting what they perceived as higher quality care. Interestingly, the group weighed online ratings over accuracy in terms of what they were willing to pay more for — raising questions about what aspects of care patients subjectively care most about.

Another study from the Harvey L. Neiman Health Policy Institute® IMPACT and HEAL research teams at Emory University and Georgia Tech, respectively, took a different look into this issue with objective data.5 The researchers identified all hospitals in the Medicare Hospital Compare Quality of Care database that offer lumbar spine MRI, identified by a listed OP–8 score (a quality metric indicating rates of lumbar spine MRI). The researchers next assessed compliance across these hospitals with the CMS price transparency tools as of October 2021. The compliance was nearly 50% — higher than a prior report in 2021 of 17% compliance across hospitals and services.6 The researchers found up to 50–fold variability in the listed cash prices and charges for lumbar spine MRI. Of particular interest was that the researchers linked hospital price transparency compliance to consumer ratings. Although the results did not show a significant correlation between consumer ratings and listed prices, the study did find that the hospitals with high star ratings from the Hospital Consumer Assessment of Healthcare Providers and Systems were more likely to comply with the price transparency mandate.

Perhaps these data are not surprising. Hospitals that are working harder across the board to increase patient satisfaction are also taking steps earlier to provide prices for shoppable services. But the question remains — to what end? Providing tools and data for patients to be more informed about the cost and quality when they choose their care provider is a laudable goal. But providing some information but not all information necessary for a patient to make an informed choice may take us even further away from this end game.

We need to take a step back and ask: in a system where all healthcare is not equal, how do we help patients decide what they are willing to pay based on the value they’ll receive? Because, in the most simplified form, providing prices in the absence of quality data has the potential to erode quality with the pressure to keep prices low, and at the same time brand imaging as a commodity.


1. Anzai Y, D Kathy, Pendleton RC. Price Transparency in Radiology: A Model for the Future. J Am Coll Radiol. 2020; 17(1):194–199.

2. Centers for Medicare and Medicaid Services. Hospital price transparency frequently asked questions (FAQs). December 23, 2020. Accessed May 7, 2021.

3. Durand DJ, Narayan AK, Rybicki FJ, Burleson J, Nagy P, McGinty G, Duszak R Jr. The health care value transparency movement and its implications for radiology. J Am Coll Radiol. 2015;12(1):51–8. 

4. Manik R, Carlos RC, Duszak R Jr, Sadigh G. Costs Versus Quality in Imaging Examination Decisions. J Am Coll Radiol. 2022;19(3):450–459.

5. Lin R, Duszak R, Carlos, R, Sadigh, G.  Relationship Between Hospital Compliance With Medicare’s Price Transparency Rule, Proposed Cash Prices, and Consumer Ratings for MRI Lumbar Spine. J Am Coll Radiol. 2022.

6. Gondi S, Beckman AL, Ofoje AA, Hinkes P, McWilliams JM. Early Hospital Compliance With Federal Requirements for Price Transparency. JAMA Intern Med. 2021;181(10):1396–1397. 

Author Elizabeth Y. Rula, PhD,  executive director of the Harvey L. Neiman Health Policy Institute®