As Covid-19 begins to slow down in the United States, the health care world is starting to refocus on some of the issues that permeated the space before the pandemic. Advisory Board's Rob Lazerow and Heather Bell sat down with Radio Advisory's Rachel Woods to talk about how three new policies—hospital price transparency, payer price transparency, and surprise billing—will affect the health care industry.

Read a lightly edited excerpt from the interview below and download the episode for the full conversation.

Rachel Woods: We're talking about transparency, which is intricately tied to affordability. And this has been a big focus for some time. CMS has been pushing for transparency for years. What is different about these three policies— the hospital and payer price transparency rules, and the surprise billing ban—that make them the boldest moves to date?

Rob Lazerow: I think what makes these particular policies—the price transparency ones in particular—distinct is that this is the first time that the government's requiring hospitals and health plans to publicly disclose what have otherwise been privately negotiated rates.

How hospitals are (and aren't) responding to the price transparency rule

Woods: Maybe even secret rates.

Lazerow: That's right. And I want to go back to the premise of the question a little bit, because there's an interesting angle on affordability, because it's really a question of affordability for whom? This isn't about driving savings for Medicare. We've had so many conversations around the Medicare trust fund and it's looming insolvency in 2024. This is about driving affordability or potentially driving affordability in the private sector.

Woods: And I think that's really important because a lot of the narrative that's out there is that these are all about protecting the consumer. But what's interesting about what you just said is yes, the goal is that hopefully these policies ultimately make hospitals and health plans more consumer-friendly, but there's more to it.

Lazerow: Rae, I know we've been talking about the government, we're talking about hospitals, we're talking about health plans, but these policies also speak to a lot of other audiences. So you think about end-users, employers and consumers definitely come to mind, but also Silicon Valley and a lot of innovators who are interested in getting their hands on this data and aggregating this data to highlight the different pricing variation, both across and even within hospitals.

Woods: Heather, whenever I talk about policy, I get afraid that there's a natural instinct to assume political motivation. But the three that we're talking about today are interesting because they are Trump-era laws. But because of the timing, the Biden administration is actually the one who gets to write the rules. What does that mean?

Heather Bell: Well, I'm going to take a step back and say, that's partly true—let's remember that the hospital and price transparency rules were written by the Trump administration and now enforcement is falling to the Biden administration. So there's a slight distinction there.

Lazerow: Versus the other two that were passed at the end of the last administration and now must be implemented by the current one.

Bell: Exactly, But Rae, I think the point you're getting at is spot on. These are a collection of policies that really bridge the Trump and Biden administration. And it's kind of the first bridge we're really seeing.

Woods: And they reflect the fact that these are not partisan efforts, even though there might be some differences in implementation. These are universal efforts for all sides of the aisle.

Cheat sheet: The No Surprises Act

Bell: Exactly. These have been long standing bipartisan issues that we've been talking about on the Hill for years now.

Woods: Before we talk about any one of these policies, I'm wondering how do they actually interact together?

Lazerow: For me, that's actually the most important and interesting strategic question because I think it's very easy to look at these policies individually and ask, well, what do they do one by one? But I think it's the interaction with them that could be the most transformative.

So for example, at the end of this year, we will have had a full year of hospital price transparency under our belt. So hospitals, health plans, employers will all have more visibility into what hospitals are getting paid and from whom.

Beginning next year, the surprise billing ban, once the rules are written in and it goes into effect, will change the stakes of hospitals being in and out of network. You put the two of those together and it could be a huge rewrite to how hospitals and health plans approach contract negotiations. It could be much ado about nothing. I have no idea. And as a researcher that really excites me.

Woods: And you're getting to the fact that it's going to be awhile before we know exactly how all three of these play out. But I do want to talk about the other two pieces of the puzzle here. So Heather, what do we actually know about the payer transparency side?

Bell: So what's more interesting is in 2023, they're going to give patients an individual estimate, not just based on the prices from hospitals, but something that also takes into account their benefits and cost sharing.

So to put this in real terms, say I'm going to the doctor and I want to know upfront how much that visit is going to cost me. I can now contact my insurer, tell them about the visit and they have to respond with a reasonable cost estimate before I go to that provider visit.

Cheat sheet: The new hospital price transparency rule

Woods: That is customized to you as a patient.

Bell: Exactly.

Lazerow: Heather, I'm glad you're excited about the 2023 changes. I'm really focused on the 2022 changes because health plans are going to have to do basically what hospitals are doing right now in posting negotiated rates publicly.

And I think this could actually end up being more consequential than the hospital price transparency rule. Because if you think about any given market, there are generally more hospitals than health plans. So we'll get a larger view when the health plans post their data, fewer decision-makers so likely faster action and more consistent data, at least from any individual payer.

So you could easily see all this focus right now on the hospital price transparency rule, pivot to the health plan price transparency side once that data is on the table beginning next year.

Woods: But there is a third policy that is not about transparency and that's about surprise billing.

What do we know there?

Lazerow: What we know is that this is essentially going to be the end of surprise bills and surprise bills have been a big topic for the last few years, largely driven by a lot of media coverage of consumers getting a big bill. It's not just that it's surprising. It's surprisingly large typically.

Woods: And surprising for what it's for. We've all seen these, the band aid in the ED, the fee for holding my baby after giving birth. That's the kind of headline that no hospital wants to have.

Lazerow: But they generally come from someone receiving care from an out of network provider. And in many respects, consumers have ended up stuck in the middle of negotiations between hospitals and health plans.

These surprise bills have become such an issue because of the way cost-sharing has changed over time. It's not a new phenomenon that there are certain providers who are out of insurance networks and there's out of network care. What's different is consumers are now exposed to those costs in a way that they weren't five or 10 years ago. And that's why it's been such a hot issue.

Bell: And it's not just that surprise billing is outlawed now. It's that it's being replaced by this new arbitration process. And this process takes the consumer out of the middle of these negotiations and it requires payers and hospitals to come to terms. It creates a formalized model for resolving these out of network contracting disputes and it holds the consumer harmless.

Lazerow: So let's tie these ideas together. We're going to have a lot more information on who's getting paid what amounts, and different stakes are being in and out of network. And that's why I think we have to look at all of these policies together. At least once they're all up and running.