[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                    LOWERING UNAFFORDABLE COSTS: EXAMINING 
                     TRANSPARENCY AND COMPETITION IN 
                     HEALTHCARE

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 28, 2023

                               __________

                           Serial No. 118-16
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


     Published for the use of the Committee on Energy and Commerce

                   govinfo.gov/committee/house-energy
                        energycommerce.house.gov
                        
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
54-163 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------                            
                       
                    COMMITTEE ON ENERGY AND COMMERCE

                   CATHY McMORRIS RODGERS, Washington
                                  Chair
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio                  Ranking Member
BRETT GUTHRIE, Kentucky              ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia         DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida            JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio                   DORIS O. MATSUI, California
LARRY BUCSHON, Indiana               KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina       JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan                PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia    YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina          TONY CARDENAS, California
GARY J. PALMER, Alabama              RAUL RUIZ, California
NEAL P. DUNN, Florida                SCOTT H. PETERS, California
JOHN R. CURTIS, Utah                 DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona               MARC A. VEASEY, Texas
GREG PENCE, Indiana                  ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas                  ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania             NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice  LISA BLUNT ROCHESTER, Delaware
    Chair                            DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas           ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia               KIM SCHRIER, Washington
TROY BALDERSON, Ohio                 LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho                  LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
                                 ------                                

                           Professional Staff

                      NATE HODSON, Staff Director
                   SARAH BURKE, Deputy Staff Director
               TIFFANY GUARASCIO, Minority Staff Director
                         Subcommittee on Health

                        BRETT GUTHRIE, Kentucky
                                 Chairman
MICHAEL C. BURGESS, Texas            ANNA G. ESHOO, California
ROBERT E. LATTA, Ohio                  Ranking Member
H. MORGAN GRIFFITH, Virginia         JOHN P. SARBANES, Maryland
GUS M. BILIRAKIS, Florida            TONY CARDENAS, California
BILL JOHNSON, Ohio                   RAUL RUIZ, California
LARRY BUCSHON, Indiana, Vice Chair   DEBBIE DINGELL, Michigan
RICHARD HUDSON, North Carolina       ANN M. KUSTER, New Hampshire
EARL L. ``BUDDY'' CARTER, Georgia    ROBIN L. KELLY, Illinois
NEAL P. DUNN, Florida                NANETTE DIAZ BARRAGAN, California
GREG PENCE, Indiana                  LISA BLUNT ROCHESTER, Delaware
DAN CRENSHAW, Texas                  ANGIE CRAIG, Minnesota
JOHN JOYCE, Pennsylvania             KIM SCHRIER, Washington
DIANA HARSHBARGER, Tennessee         LORI TRAHAN, Massachusetts
MARIANNETTE MILLER-MEEKS, Iowa       FRANK PALLONE, Jr., New Jersey (ex 
JAY OBERNOLTE, California                officio)
CATHY McMORRIS RODGERS, Washington 
    (ex officio)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Brett Guthrie, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     1
    Prepared statement...........................................     4
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     6
    Prepared statement...........................................     8
Hon. Cathy McMorris Rodgers, a Representative in Congress from 
  the State of Washington, opening statement.....................    10
    Prepared statement...........................................    12
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    16
    Prepared statement...........................................    18

                               Witnesses

Chris Severn, Cofounder and Chief Executive Officer, Turquoise 
  Health.........................................................    20
    Prepared statement...........................................    23
    Answers to submitted questions...............................   311
Matthew Forge, Chief Executive Officer, Pullman Regional Hospital    26
    Prepared statement...........................................    28
Marilyn J. Bartlett, Senior Policy Fellow, National Academy for 
  State Health Policy............................................    30
    Prepared statement...........................................    32
    Answers to submitted questions \1\
Sophia Tripoli, Director, Center for Affordable Whole-Person 
  Care, Families USA.............................................    34
    Prepared statement...........................................    36
    Answers to submitted questions...............................   313
Benedic Ippolito, Ph.D., Senior Fellow, American Enterprise 
  Institute......................................................    52
    Prepared statement...........................................    54
    Answers to submitted questions...............................   329

                           Submitted Material

Inclusion of the following was approved by unanimous consent.
Letter of March 27, 2023, from Cynthia A. Fisher, Founder and 
  Chairman, PatientRightsAdvocate.org, to Mrs. Rodgers, et al....   121
Letter of March 28, 2023, from Sterling N. Ransone, Jr., Board 
  Chair, American Academy of Family Physicians, American Academy 
  of Family Physicians, to Mr. Guthrie and Ms. Eshoo.............   123
Statement of the American Hospital Association, March 28, 2023...   128
Letter of March 23, 2023, from The Alliance to Fight for Health 
  Care to Hon. Jason Smith, et al................................   136
Statement of the American Medical Association, March 28, 2023....   140
Letter of March 27, 2023, from Charles N. Kahn III, President and 
  Chief Executive Officer, Federation of American Hospitals, to 
  Mr. Guthrie and Ms. Eshoo......................................   148
Letter of March 28, 2023, from Cheryl DeMars, Chief Executive 
  Officer, Employers Health Care Alliance Cooperative (The 
  Alliance), to Mrs. Rodgers, et al..............................   155

----------

\1\ Ms. Bartlett's answers to submitted questions have been retained in 
committee files and are available at https://docs.house.gov/meetings/
IF/IF14/20230328/115581/HHRG-118-IF14-Wstate-BartlettM-20230328-
SD003.pdf.
Statement of the National Health Council, March 28, 2023.........   159
Statement of the National Community Pharmacists Association, 
  March 28, 2023.................................................   162
Letter of March 20, 2023, from Cynthia A. Fisher, Founder and 
  Chairman, PatientRightsAdvocate.org, to Mrs. Rodgers and Mr. 
  Pallone........................................................   165
Article of September 27, 2022, ``How a Hospital Chain Used a Poor 
  Neighborhood to Turn Huge Profits,'' by Katie Thomas and 
  Jessica Silver-Greenberg, New York Times.......................   171
Statement of the American Benefits Council, April 15, 2021.......   179
Statement of Consumers First, March 28, 2023.....................   190
Statement of Evan R. Goldfischer, President, and Deepak A. 
  Kapoor, Chairman, Health Policy, Large Urology Group Practice 
  Association, March 28, 2023....................................   196
Study by the Physicians Advocacy Institute, ``COVID-19's Impact 
  on Acquisitions of Physician Practices and Physician Employment 
  2019-2021,'' April 2022 \2\
Presidential Executive Order, ``Executive Order on Promoting 
  Competition in the American Economy,'' July 9, 2021............   203
Study by the American Enterprise Institute, ``Policy Solutions 
  for Hospital Consolidation,'' by Brian J. Miller and Jess M. 
  Ehrenfeld, November 2022.......................................   223
Report of MedPAC, ``Report to the Congress: Medicare and the 
  Health Care Delivery System, Chapter 6: Aligning fee-for-
  service payment rates across ambulatory settings,'' June 2022 
  \2\
Report of the Inspector General, Department of Health and Human 
  Services, ``Medicare and Beneficiaries Paid Substantially More 
  to Provider-Based Facilities in Eight Selected States in 
  Calendar Years 2010 Through 2017 Than They Paid to Freestanding 
  Facilities in the Same States for the Same Type of Services,'' 
  June 2022 \2\
Article of August 23, 2022, ``The $18,000 Breast Biopsy: When 
  Having Insurance Costs You a Bundle,'' by Lauren Sausser, NPR..   235
Letter from Kevin Kuhlman, Vice President, Federal Government 
  Relations, NFIB, to Mr. Guthrie and Ms. Eshoo..................   248
Statement of the Pharmaceutical Care Management Association, 
  March 28, 2023.................................................   251
Article of February 17, 2023, ``Estimating the Impact of New 
  Health Price Transparency Policies,'' by Stephen T. Parente, 
  INQUIRY: The Journal of Health Care Organization, Provision, 
  and Financing \2\
Study by the Division of Economic and Health Policy Research, 
  American Medical Association, ``Competition in Health 
  Insurance: A comprehensive study of U.S. markets,'' 2022 \2\
Article of March 23, 2023, ``New Poll: Majority of Voters Support 
  Aggressive Congressional Action to Lower Hospital Prices,'' 
  Arnold Ventures................................................   262
Report of the Alliance to Fight for Health Care and Morning 
  Consult, ``Coverage and Reforming the System,'' February 2023..   265
Article of March 24, 2008, ``Building Something Worth Building 
  For All Patients,'' by Rep. Michael Burgess, Health Affairs 
  Forefront......................................................   282
Report of the Foundation for Government Accountability, ``How 
  health care incentives are saving money in Kentucky,'' by Jared 
  Rhoads, The Dartmouth Institute for Health Policy and Clinical 
  Practice, March 8, 2019........................................   285
Letter of March 28, 2023, from Mary R. Grealy, President, 
  Healthcare Leadership Council, to Mr. Guthrie and Ms. Eshoo....   302
Report of the Government Accountability Office, ``Medicare: 
  Increasing Hospital-Physician Consolidation Highlights Need for 
  Payment Reform,'' December 2015 \2\
Report of the Departments of Health and Human Services, Treasury, 
  and Labor, ``Reforming America's Healthcare System Through 
  Choice and Competition'' \2\

----------

\2\ The information has been retained in committee files and is 
included in the Documents for the Record at https://docs.house.gov/
meetings/IF/IF14/20230328/115581/HHRG-118-IF14-20230328-SD003.pdf.
Report of the Government Accountability Office, ``Private Health 
  Insurance: Markets Remained Concentrated through 2020, with 
  Increases in the Individual and Small Group Markets,'' November 
  2022 \2\
Report of the Congressional Budget Office, ``The Prices That 
  Commercial Health Insurers and Medicare Pay for Hospitals' and 
  Physicians' Services,'' January 2022 \2\
Statement of the Foundation for Government Accountability, 
  ``Lowering Unaffordable Costs: Examining Transparency and 
  Competition in Health Care,'' by Jonathan Ingram, Vice 
  President of Policy and Research, and Hayden Dublois, Data and 
  Analytics Director.............................................   304
Executive Order 13877 of June 24, 2019, ``Improving Price and 
  Quality Transparency in American Healthcare To Put Patients 
  First,'' Federal Register, Vol. 84, No. 124....................   307

----------

\2\ The information has been retained in committee files and is 
included in the Documents for the Record at https://docs.house.gov/
meetings/IF/IF14/20230328/115581/HHRG-118-IF14-20230328-SD003.pdf.

 
LOWERING UNAFFORDABLE COSTS: EXAMINING TRANSPARENCY AND COMPETITION IN 
                               HEALTHCARE

                              ----------                              


                        TUESDAY, MARCH 28, 2023

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:02 p.m., in 
the John D. Dingell Room 2123 of the Rayburn House Office 
Building, Hon. Brett Guthrie (chairman of the subcommittee) 
presiding.
    Members present: Representatives Guthrie, Burgess, Latta, 
Griffith, Bilirakis, Johnson, Bucshon, Hudson, Carter, Dunn, 
Pence, Crenshaw, Joyce, Harshbarger, Miller-Meeks, Obernolte, 
Rodgers (ex officio), Eshoo (subcommittee ranking member), 
Sarbanes, Cardenas, Ruiz, Dingell, Kuster, Blunt Rochester, 
Craig, Schrier, Trahan, and Pallone (ex officio).
    Also present: Representatives Allen, Balderson, and Matsui.
    Staff present: Alec Aramanda, Professional Staff Member, 
Health; Jolie Brochin, Clerk, Health; Seth Gold, Professional 
Staff Member, Health; Grace Graham, Chief Counsel, Health; Jack 
Heretik, Press Secretary; Nate Hodson, Staff Director; Peter 
Kielty, General Counsel; Emily King, Member Services Director; 
Carla Rafael, Staff Assistant; Lydia Abma, Minority Policy 
Analyst; Waverly Gordon, Minority Deputy Staff Director and 
General Counsel; Saha Khaterzai, Minority Professional Staff 
Member; Una Lee, Minority Chief Health Counsel; Greg Pugh, 
Minority Staff Assistant; and C.J. Young, Minority Deputy 
Communications Director.
    Mr. Guthrie. The subcommittee will come to order.
    The Chair recognizes himself for an opening statement.

 OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Today we are holding a bipartisan hearing to examine the 
rising cost of healthcare for patients and their families. 
Rising costs of care for individuals is one of the single 
greatest threats to the overall economic security of Americans. 
Over the past 30 years, the cost of healthcare has steadily 
risen by almost 5 percent, annually. In 2021 costs eclipsed 4 
trillion annually, amounting to roughly $13,000 per person.
    Rising costs have coincided with a sharp rise in 
consolidation within the healthcare industry. There have been 
almost 1,800 hospital mergers between 1998 and 2021, leading to 
about 2,000 fewer hospitals throughout the country. Larger 
health systems are also buying physician practices at record 
rates. More than 80,000 physician practices were acquired in 
2018, a marked increase over the more than 35,000 acquired in 
2012.
    The three largest pharmacy benefit managers represent over 
80 percent of the marketplace, and many have merged with 
insurance companies, specialty pharmacies, retail pharmacies, 
and even drug distribution.
    Today we spend 31 percent of all healthcare expenditures on 
hospital services, 20 percent on physician services, and 9 
percent on prescription medications. It is important to note 
that these are just recent trends. The point of today's hearing 
is to better understand these trends, which I believe can be 
achieved through greater price transparency in the healthcare 
system.
    Despite having all this aggregate expenditure information 
widely available to the public, patients and employers are 
unable to access an upfront price for giving an item or 
service. They cannot make informed decisions about how and 
where to spend their money as they can in virtually every other 
industry. Consequentially, this leads to high, unexpected 
costs, a lack of trust with the healthcare system, and a 
reluctance to seek critical healthcare services.
    Not long ago, a constituent called me. He was frustrated 
because he could not find the price to get a simple healthcare 
procedure done. He had health insurance, but was trying to find 
high-quality care at the best price within his budget. 
Unfortunately, this was a--is a frustration shared by millions 
of Americans.
    I hope today that--I hope that today can be a start on 
finding bipartisan solutions to make healthcare pricing more 
transparent and the healthcare system easier to navigate for 
patients. We should start with any improvements necessary to 
the Centers for Medicare and Medicare Services' Hospital Price 
Transparency Rule and the multidepartment Transparency in 
Coverage Rule.
    These rules require hospitals to publicly post prices of 
hundreds of common procedures on their website in a user-
friendly format and require private health plans to disclose 
information about pricing and what patients are obligated to 
pay. All of this information gives patients and employers that 
pay for health insurance for their employees more information 
and some peace of mind to know how much their healthcare 
procedures or services would cost ahead of ahead of receiving 
the care.
    It is imperative for the Biden administration to conduct 
greater enforcement efforts on these rules to better serve 
patients with clear and actionable price information.
    It is also crucial for Congress to codify and strengthen 
these important transparency rules to support a more efficient 
price transparency regulatory environment.
    Congress should also consider solutions to make other parts 
of the healthcare system more transparent. We should build on 
our bipartisan work to make the pharmacy benefit managers more 
transparent and ensure patients as well as employers are 
getting the best possible deal on their prescription drug 
benefits. This could also lead to greater access to biosimilars 
and generics when they come to market.
    Shining a light on middlemen who are making prescriptions 
more expensive is one important step to bolster competition and 
lower prices.
    Further, patients, especially seniors, are unnecessarily 
paying more money for the same service because of the location 
where it was delivered, which requires further discussion.
    It is well past time to carefully examine the root causes 
of these inefficiencies that are plaguing patients with higher 
costs and more confusion. By working together across the aisle, 
I am hoping we can make important strides to make the 
healthcare system easier for patients to navigate, so they can 
get the healthcare they need. To that end, I look forward to 
today's discussion.
    I really appreciate working with the ranking member and our 
staffs together to put this wonderful panel together. Every 
witness is a bipartisan witness and was--is brought together, 
and we really appreciate it.
    [The prepared statement of Mr. Guthrie follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. I appreciate your hard work, and I yield back, 
and I will now recognize my good friend, the gentlelady from 
California, Representative Eshoo, for 5 minutes for an opening 
statement.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman, for holding this 
important hearing, and welcome to all the witnesses. We can't 
wait to start asking you questions.
    The late Uwe Reinhardt--he was a prestigious health 
economist who often appeared before this subcommittee--famously 
said ``It's the prices, stupid'' when critiquing why the U.S. 
spends so much on healthcare. Twenty years since Dr. 
Reinhardt's seminal analysis, our Nation's inflated healthcare 
prices are still the primary reason why the U.S. spends 
significantly more on healthcare than any other country in the 
world.
    A quick comparison to other large, wealthy nations shows 
the U.S. is an outlier. We spend two to three times more on 
prescription drugs and medical devices. We spend $10,000 more, 
on average, per hospital discharge. We spend seven times more 
per capita on health insurance administrative costs. Despite 
spending nearly 18 percent of GDP on healthcare, we have fewer 
practicing doctors and nurses, fewer hospital beds per capita, 
and a lower life expectancy than other wealthy nations. We also 
have the highest avoidable death rates and maternal and infant 
mortality, and an obesity rate nearly two times more than the 
average of our peer nations. None of this, none of these points 
are bragging rights, for sure.
    In other words, we spend more, but we get much less. So 
that is why I am pleased that we are holding this important 
hearing on healthcare transparency today. I am fully supportive 
of the efforts to shine a light on the fraud and the waste and 
the abuse percolating in our healthcare industry. But we need 
to do more than shine a light. Fortunately, over the past 2 
years, we have made some major strides.
    First, we finally gave Medicare the ability to directly 
negotiate prescription drug prices, which will save taxpayers 
more than $300 billion over 10 years. The Biden administration 
has implemented price transparency regulations, which require 
hospitals to publicly post prices for all their services on 
their websites in a user-friendly format.
    Now, the hospitals, I would say, have been slow to comply. 
But CMS recently found that 70--at least 70 percent of 
hospitals are in compliance with the rules over 2 years after 
they were finalized. But this has to be 100 percent 
participation. CMS is now stepping up enforcement measures 
against the 30 percent of hospitals who remain noncompliant. 
And I would just put out a call today: Don't fall into the CMS 
enforcement lane. Do it yourselves. You have had time, do this.
    Third, we are finally wrangling the abuses by Medicare 
Advantage programs. The administration has taken steps to 
recover improper payments to private plans and return this 
money to the Medicare Trust Fund. This is going to put money 
back into the pockets of American taxpayers and protect the 
long-term solvency of Medicare for future generations.
    Looking forward, we have to examine reforms to pharmacy 
benefit managers, PBMs, the secretive middlemen in the 
prescription drug industry that drive up prices and keep out 
affordable drugs. And, Mr. Chairman, I was glad to hear in your 
opening statement that you view this the same way.
    Mr. Guthrie. Absolutely.
    Ms. Eshoo. Count me in with you to do something about this.
    We really have to start spending smart. This means spending 
money on preventive care, public health, and biosecurity. So 
again, I am glad that we are having this hearing today.
    But I am disappointed that we didn't receive the witness 
testimony until 1:00 yesterday, even though the hearing was 
noticed 3 weeks ago. But let's have a good hearing.
    I want to acknowledge--and I saw them out in the hall--the 
patients--the patient rights advocates. They all have patient 
gowns on. I don't see them in the hearing room. I guess they 
will come in shortly. But I want to acknowledge their advocacy, 
because advocacy is always highly instructive to Congress.
    [The prepared statement of Ms. Eshoo follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Eshoo. So with that, Mr. Chairman, I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back. I now 
recognize the chair of the full committee, Chair Rodgers, for 5 
minutes for an opening statement.
    Ms. Eshoo. There they are.

      OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

    Mrs. Rodgers. Yes. Thank you, Mr. Chairman. There they are, 
the patient rights advocates.
    Welcome, thank you for being here.
    [Applause.]
    Mrs. Rodgers. Yes, welcome to the Energy and Commerce 
Committee and a very important hearing today. And it is an 
issue that we are addressing with bipartisan support. I really 
appreciate the comments of the chairman, the ranking member, as 
we are focused on driving down the cost of healthcare.
    It is a top concern, as cost of living has surged. More 
than 60 percent of Americans are living paycheck to paycheck. 
It means they are just one medical bill away from a financial 
emergency, one doctor visit away from not being able to pay the 
rent for their groceries or gas.
    A recent poll of Americans with health insurance found more 
than half ranked reducing healthcare costs as their top 
healthcare policy priority. For a more secure and healthier 
future, people need to have certainty and stability.
    As the ranking member just mentioned, the United States 
spends more on healthcare as a percentage of our economy than 
any other developed nation, and CBO projects that the Federal 
healthcare costs per person are expected to grow faster than 
the economy, meaning the U.S. will continue to spend more as a 
percentage of our economy. So I am pleased that we are working 
together in a bipartisan way to hold this hearing on what the 
Federal Government can do about the high cost of healthcare.
    Improving price transparency in our healthcare system is 
one of the ways that we can drive down costs. It is fundamental 
to restoring the doctor-patient relationship. Right now it is 
nearly impossible for patients or their employers to shop for 
the best and most affordable care they or their employees need. 
It is nearly impossible for people to plan ahead and budget 
their healthcare costs.
    Take, for example, Dani Yuengling from South Carolina. She 
needed a biopsy and had a $6,000 deductible. Her hospital's 
price tool estimated that she would pay $1,400. After receiving 
the bill, she found out that the true cost of the service was 
nearly 18,000, and she was on the hook for more than $5,000. 
Patients shouldn't be in the dark until after they receive care 
and their bills come.
    Now, the Trump administration finalized two rules on price 
transparency. The first rule requires hospitals to post 
standard charges and payer-specific rates for all items and 
services and a consumer-friendly display of at least 300 
shoppable services like an MRI. The second rule requires 
insurers to post comprehensive rate information and provide 
patients personalized pricing information for 500 items and 
services. That includes a wide spectrum of services, from 
routine doctor visits and imaging services to more complex care 
like knee replacements, or even delivering a baby.
    Unfortunately, independent evaluators broadly agree that 
most hospitals have not complied fully with the rules. We need 
stronger enforcement at CMS, which to date has only leveled--
levied two penalties against hospitals for not posting accurate 
information for patients.
    We will hear from a hospital in my district that is 
transparent and in compliance with the rules about their 
experience, and why we should have reasonable expectations that 
other hospitals should comply with these rules. Eastern 
Washington employers have also been on the forefront of 
utilizing price transparency for good. Schweitzer Engineering 
Laboratories in my district, one of the largest private 
employers in eastern Washington, has been a leader in utilizing 
price transparency to deliver better quality care at lower 
prices.
    We know from stories like these, if fully implemented, 
these rules help Americans. A recent economic analysis found 
that, together, both rules could reduce spending for privately 
insured individuals by tens of billions through 2025 alone, 
with low-income Americans seeing the most significant benefits. 
Ranking Member Pallone and I have worked together on oversight 
for these rules for the past 2 years, and I look forward to 
continuing that bipartisan work today.
    Additionally, we will also examine how more competition can 
help lower healthcare costs. Hospital physician and health 
insurance markets have become increasingly consolidated. 
Consolidation hasn't just been limited to hospitals buying 
other hospitals or physician groups buying other physician 
groups, also known as horizontal integration. We have seen a 
rise in vertical integration, where purchases occur across 
different sectors within the healthcare system.
    For example, this could mean hospitals acquiring physician 
groups or insurers buying PBMs. For patients, this could mean 
their insurance company may own their doctor's practice, their 
pharmacy, and the PBM that decides what they pay for medicine. 
These--are these arrangements in the best interests of 
patients? It remains to be seen, and one of the reasons why we 
are having this hearing today.
    So thank you. Thank you to the witnesses. We are grateful 
for your expertise and work, and looking forward to having this 
bipartisan conversation.
    [The prepared statement of Mrs. Rodgers follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Rodgers. I yield back.
    Mr. Guthrie. Thank you. I thank the Chair for yielding. The 
Chair now recognizes the gentleman from New Jersey, the ranking 
member of the full committee, Mr.--Representative Pallone for 5 
minutes for an opening statement.

OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Chairman Guthrie.
    Today's bipartisan hearing builds on this subcommittee's 
critical efforts to lower healthcare costs and make coverage 
more affordable. More Americans have health coverage today than 
ever before, thanks to the Affordable Care Act and the 
expansion subsidies included in the American Rescue Plan and 
the Inflation Reduction Act.
    A record-breaking 40 million people have gained coverage, 
and a record high 16.5 million Americans have coverage through 
the ACA marketplace. Millions of families have seen the cost of 
their monthly insurance premiums go down by more than 20 
percent. The average family is saving $2,400 in premiums a 
year, thanks to the ACA enhancements we made over the last 2 
years. And the Inflation Reduction Act will also lower 
prescription drug prices for America's seniors.
    We are making significant progress, but high healthcare 
costs and affordability continue to be a challenge and a 
financial burden for American families. Our healthcare system 
is complex and challenging. Too many patients are forced to 
wait until after they receive care and have the medical bill to 
fully understand how much they owe.
    Patients deserve greater transparency in the prices they 
pay for healthcare. Today consumers are not able to easily 
obtain price information in advance. Sometimes the price 
information that is provided is inaccurate and misleading, 
making it difficult to determine the true value of the care. 
And patients also face wide price variations. The lack of 
transparency makes it difficult to compare across providers in 
advance of receiving care.
    Prices for healthcare services also vary widely across 
different geographic areas, but also across providers in the 
same geographic area. According to an analysis by the New York 
Times, a single hospital can have up to a 300 percent price 
difference for the same service, depending on the insurer. 
Another analysis by the Peterson Center and the Kaiser Family 
Foundation found the price of a joint replacement for knee or 
hip surgery varied widely across the 20 largest metropolitan 
areas, ranging from less than 20,000 to more than 70,000.
    So a lack of transparency into these prices makes it 
difficult for both consumers and employers to make informed 
decisions. Employers have difficulty accessing data that could 
help them negotiate competitive prices and design high-value 
plans.
    The contracts of pharmacy benefit managers are also opaque. 
This makes it difficult for employers and plan sponsors to 
understand drivers of cost and negotiate savings. We also need 
greater oversight and enforcement of pharmacy benefit managers.
    We must also build on the Hospital Price Transparency Final 
Rule and the Transparency in Coverage Final Rule requirements. 
The Hospital Price Transparency Rule is meant to bring more 
transparency to healthcare by requiring hospitals to display 
charges for the most-used services in a consumer-friendly way. 
However, I am concerned by reports that many hospitals are 
either acting slowly or not yet complying with the final rule.
    I am also troubled by reports that some hospitals are 
making it more difficult for consumers to access the 
information. I understand that some hospitals are requiring 
consumers to input personally identifiable information in order 
to access information that should be easily available, or 
burying the information deep in their websites.
    All this is inexcusable, so I look forward to hearing from 
the witnesses on what reforms are necessary, and what more 
Congress can do to further strengthen those regulations.
    While greater price transparency is important, I don't 
believe it is sufficient in and of itself to expand coverage or 
to improve affordability. Today 43 percent of U.S. adults are 
inadequately insured, and half of uninsured or underinsured 
Americans face problems paying their medical bills. More than 
40 percent of adults have delayed or forgone medical care 
because of the cost. And more than 100 million Americans have 
medical debt. So transparency alone will not help lower out-of-
pocket costs for families.
    We need to couple greater transparency with real solutions 
that will lower costs, and that is why we must continue to 
build on the historic progress we have made over the last 2 
years. We need to continue to expand coverage and make 
healthcare more affordable and accessible for all Americans. It 
is critical that we make the ACA subsidy expansions permanent 
and build on the success of the Inflation Reduction Act to 
further lower drug prices for consumers.
    So today's hearing is an important bipartisan step in our 
continued effort to reduce healthcare costs. I look forward to 
the witnesses' testimony.
    [The prepared statement of Mr. Pallone follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pallone. And with that, Mr. Chairman, I would yield 
back, Chairman Guthrie.
    Mr. Guthrie. Thank you. I thank the ranking member for 
yielding back.
    The Chair reminds Members that, pursuant to the committee 
rules, all Members' opening statements will be made part of the 
record.
    Are there any further opening statements? Any opening 
statements on the Republican side, any on the Democrat? Any 
further opening statements?
    Seeing none, I would like to introduce our witnesses. Our 
first witness today is Chris Severn, cofounder and CEO of 
Turquoise Health. Our second witness is Matthew Forge, CEO of 
Pullman Regional Hospital. Our third witness is Marilyn 
Bartlett, senior policy fellow with the National Association of 
State Health Policy. Our fourth witness will--is--witness is 
Sophia Tripoli, director of healthcare innovation at Families 
USA. And our final witness today is Ben Ippolito, senior fellow 
in economic policy studies with the American Enterprise 
Institute.
    I thank you all for being here and the time that you put 
into being here today and preparing for--to be here today. I 
thank you.
    Some of you--most of you have testified. If you haven't, 
you have 5 minutes. You will see a green button, and--a yellow 
button means it is getting close to time to--yellow light, time 
to wrap up. And then--that is right, we get to push the buttons 
on our side--the lights will wrap up, and then red means that--
to finish up, if possible.
    So we will start with our first witness. Our witness will 
be Mr. Severn.
    You are recognized for 5 minutes for an opening statement.

   STATEMENT OF CHRIS SEVERN, COFOUNDER AND CHIEF EXECUTIVE 
   OFFICER, TURQUOISE HEALTH; MATTHEW FORGE, CHIEF EXECUTIVE 
OFFICER, PULLMAN REGIONAL HOSPITAL; MARILYN J. BARTLETT, SENIOR 
POLICY FELLOW, NATIONAL ACADEMY FOR STATE HEALTH POLICY; SOPHIA 
  TRIPOLI, DIRECTOR, CENTER FOR AFFORDABLE WHOLE-PERSON CARE, 
   FAMILIES USA; AND BENEDIC IPPOLITO, Ph.D., SENIOR FELLOW, 
                 AMERICAN ENTERPRISE INSTITUTE

                   STATEMENT OF CHRIS SEVERN

    Mr. Severn. Chairman Guthrie, Ranking Member Eshoo, members 
of the Health Subcommittee, thank you for the opportunity to 
testify at today's hearing.
    We started Turquoise Health in 2020 as a direct response to 
the 2019 Executive orders on price transparency for hospitals 
and health insurers. In my 10-year background working with the 
secret contracts negotiated between providers and insurers, it 
was clear to me this sudden profusion of price transparency 
data would both spur healthcare price competition and reform 
the patient financial experience.
    Prior to January of 2021, there was no accessible market 
data for patients to price shop. Perhaps equally important, 
there was no data to drive regional macroeconomic price 
competition. In late 2020, as we prepared to launch Turquoise, 
a platform that would allow patients to browse these new prices 
for free, bipartisan efforts in Congress passed the No 
Surprises Act. This new legislation detailed a much-needed 
workflow for communicating good-faith estimates for insured 
patients. Critically, it also outlined an avenue for patients 
to dispute inaccurate estimates after the fact.
    These three laws each mandate essential data and system 
changes that will finally permit insured patients and their 
employers to know the cost of care. Any significant 
modification to these laws could lead to the overall dilution 
of the intended dual aims of creating competition and 
empowering savvy consumers of healthcare.
    There are three main themes I aim to shed light on today: 
What is the state of compliance with existing transparency 
mandates? What impacts are we already observing on the 
economics of healthcare? And three, in what areas can 
additional government effort further the impact of these laws?
    On the state of compliance, Turquoise is one of the few 
data companies that monitors all 6,000 hospital websites on a 
quarterly basis and all health insurance websites on a monthly 
basis. As of March 1st, we have seen over 5,100 hospitals 
publishing price information, compared to just 1,800 hospitals 
this time 2 years ago.
    Health insurers were required to publish pricing data 18 
months after hospitals, starting July 1st of 2022. As of March 
1st, we have discovered over 180 insurers with pricing data 
published, an increase from 69 in July of last year. We 
estimate these prices to represent 96 percent of covered 
commercially insured lives in the United States.
    Notably, the new insurance disclosed data represents prices 
for all types of providers, not just hospitals. This creates a 
compelling new competitive dynamic around the site of care: 
When is it most cost effective to treat in a hospital or 
surgery center or at home?
    On the impact of the new transparency mandates, the sudden 
infusion of billions of healthcare prices into the system 
requires time for the industry and innovators like Turquoise to 
adjust. The initial setup time required for data ingestion, 
software development, and consumer adoption explains much of 
the gap in perception between the optimism felt by startups 
like Turquoise and the skepticism felt by--in the press, excuse 
me.
    Turquoise has now nearly 50,000 website visitors browsing 
prices for free every month, a 400 percent increase from a year 
ago. This data also reaches patients and employers through 20 
distribution partners working on care navigation. Critically, 
we are also beginning to see this data embedded into the 
clinician workflow at the time of the referral.
    Will these new efforts to decrease the cost--will these new 
efforts decrease the cost of healthcare in the U.S.? There is 
existing literature to support that competition and consumer 
choice will lead to lower prices.
    But these new laws also present a second massive 
opportunity to reduce the administrative costs of healthcare, 
which studies note to exceed 30 percent of every dollar spent 
in the U.S.--healthcare dollar spent in the U.S.--by 
standardizing the payment of medical claims and the 
reimbursement methods negotiated between providers and 
insurers.
    That being said, we are still far from seeing the full 
impact of this new data on the industry. While dozens of 
academic researchers now use this data to monitor and publish 
on economic progress, we need continued government intervention 
to carry out price transparency's potential. Notably, hospitals 
and payers should be held accountable to publish transparency 
data. Enforcement has lagged, and this delays progress for 
patients.
    The No Surprises Act needs enforcement dates for key 
outstanding critical measures such as the convening of good-
faith estimates across multiple providers and the provision of 
the advanced explanation of benefits. These two requirements 
permit the vast majority of America's commercially insured 
patients to benefit from the consumer protections of the law.
    Finally, hospitals should be required to publish data in a 
standard format. CMS introduced this format in November of 2022 
as a recommendation, and this should be made a requirement as 
soon as possible in order to create cleaner data sets for 
patients.
    Thank you for your time today and for your continued focus 
on healthcare price transparency in the U.S.
    [The prepared statement of Mr. Severn follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Guthrie. I thank you for your testimony.
    The Chair now recognizes Mr. Forge for 5 minutes for your 
opening statement.

                   STATEMENT OF MATTHEW FORGE

    Mr. Forge. All right, thank you. Good afternoon, Chairs 
Rodgers and Guthrie, Ranking Members Pallone and Eshoo, and 
members of the committee. Thanks so much for having me all the 
way from Pullman out to see you today.
    Again, my name is Matt Forge, I am the chief executive 
officer for Pullman Regional Hospital. I have served as a 
leader in rural healthcare in Idaho, Washington, and Wisconsin 
over the past 8 years and certainly understand the importance 
of pricing transparency, especially as it relates to supporting 
effective healthcare decision making for individuals and 
families seeking healthcare.
    You know, we really are here for the communities that we 
serve, everything that we do. Pullman Regional Hospital is a 
public hospital district, so everything that we do is in 
relation to their best interests. Transparency is really, 
really important to us. I want to give you kind of a--we have 
been compliant with the law since 2019, which we are really 
proud of. And so I want to give you kind of a ground-level 
observation and look into that.
    So first of all, let's talk with--about the positives that 
we have experienced with the transparency in the law. You know, 
one, it is driving a greater understanding of a really complex 
environment, down to the ground level. So not just within our 
communities to patients--patients are having conversations that 
they have never had before--but also within our organization, 
as we are able to provide more thorough information that our 
patients can utilize in their decision making, which is 
fantastic.
    I think the second one, which we are really, really excited 
about now, is it is creating a table that we can go with people 
like Schweitzer Engineering and other industries within our 
community--it is creating a table where we are looking at data 
and having conversations about how to lower cost and increase 
value of healthcare within our environment. Those are really, 
really important conversations to have, and I think for one of 
the--for the first time we are starting to have those in our 
community.
    Three--and I think is a big reason why we are here today--
is greater competition. Now, Pullman Regional Hospital is one 
of five hospitals in our region, so of course we are competing. 
And I think the important thing is that we are not just talking 
about cost. I think when we are having those conversations with 
our patient financial counselors and our patients about a joint 
replacement surgery, we are talking about quality as well. So 
we are talking about cost, but we are talking about quality. 
And it is really coming to the table and having those 
conversations together.
    Now, we have been there since 2019. I have personally been 
working on this my entire career, trying to--you know, point-
of-care cost reporting is something that people are really 
interested in. It is a challenging thing to accomplish.
    So the first challenge that we face is making it accurate 
and meaningful. We all know healthcare is a complicated 
business. It changes all the time. It is a fingerprint 
business. That means every individual that comes in has a 
little bit different experience. They have a different 
employer. And so making sure that that information is accurate 
and meaningful is difficult. And especially in rural America, 
that is something that we are really struggling with. But 
there's a lot of people putting a lot of time and effort into 
that.
    Managing constant changes. Health insurance plans change 
every single year. You know, our regulations are changing 
consistently. We are spread thin as leaders. So, of course, 
managing those constant changes, pricing strategies, payer 
contract tracking, changes in the marketplace are difficult. So 
managing that here.
    And then a big one is competing priorities. We have to 
recruit physicians. We have to manage healthcare needs within 
our community. All these things come up against ensuring that 
we have great pricing transparency. So while it is one piece, 
it is a part of a bigger puzzle that will--that we are working 
hard to solve.
    And then, as we look forward to opportunities and how we 
can get help from you all today, is continue to align 
incentives. I mentioned working with industries within our 
community. We are talking about data. That data is becoming 
transparent. We are talking about real-life things, real-life 
problems, and making progress there.
    Continue to help us simplify. Our patients are asking for 
that. Our communities are asking for that. We are asking for 
that. It is not a simple process, and we need to continue to 
work with each other to simplify this.
    And then how can we minimize distractions? You know, these 
programs are fantastic. I am a huge believer in all of them, 
and I work hard in doing that. Getting them to be operational 
is extremely challenging. And if we are managing multiple 
priorities through this, it makes it more and more difficult to 
handle these things, especially from a rural perspective. So 
help us minimize distractions.
    Again, this is a really important topic, and I really 
appreciate you guys having me today. Thank you.
    [The prepared statement of Mr. Forge follows:]
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    Mr. Guthrie. Thank you for being here. I know that you 
traveled a long way. I know the Chair enjoys showing great 
things that are happening in her home State, so thanks for 
making the long trip. I appreciate it.
    Next, Ms. Bartlett, you are the national policy--policy 
fellow for National Association of State Health Plans, but your 
State health plan was Montana. So please give our regards to 
your Governor. We miss him on the committee, and tell him hello 
for us.
    You are now recognized for 5 minutes for an opening 
statement.

                STATEMENT OF MARILYN J. BARTLETT

    Mr. Bartlett. Thank you. Chair Rodgers, Ranker Pallone, 
Chairman Guthrie, and Ranking Member Eshoo. Thank you for this 
opportunity to testify this afternoon. I am a senior policy 
fellow with the National Academy of State Health Policy, but I 
am also a healthcare cost consultant. And today I am speaking 
as Marilyn Bartlett, a forensic accountant focused on following 
the money in the healthcare system to support policy, employer-
sponsored health plans, and all with the goal of lowering 
healthcare costs.
    I hope my testimony today will help the committee not only 
understand the challenges for healthcare purchasers, but the 
opportunities to make systemic and lasting change to benefit 
all Americans.
    Let me begin by sharing a story about the Montana State 
employee health plan. It has been hailed as something 
revolutionary, but what we did was nothing more than demanding 
transparency, analyzing the data, and negotiating for fair 
prices. The fact that this is remarkable is indicative of a 
dysfunctional market that is our current model.
    I was hired in late 2015 by the State of Montana to save 
the health plan from insolvency. It had just ended a year 
losing 28 million. By 2017 we had $112 million in reserves and 
had achieved a savings of $121 million.
    How did we do it? We negotiated contracts with every 
Montana hospital to reimburse as a multiple of Medicare Cost 
Plus. No longer were we going to stand for a secret discount 
off of an unknown figure.
    And we had contracts. There was no balance billing of 
members. We terminated our traditional PBM, we moved to a 
transparent passthrough model, and we also removed CVS from our 
pharmacy network because they would not accept our prices. We 
invested strongly in primary care.
    So what happened? Employees have had enhanced benefits. 
They have had no raise to premium--last time was in 2016. And 
we were able to return over 50 million taxpayer dollars to 
Montana General Fund because we were over-funded.
    The effort was bipartisan. The Democratic Governor and the 
Republican legislature worked together, and the State employees 
in the union were engaged throughout the process. We disrupted 
the status quo.
    Since then, other States have successfully launched 
reference-based pricing. Oregon State employees have seen a 
savings of 33 percent in the first year. California's State 
employee plan saw savings between 12 and 18 percent for various 
surgical procedures. And imagine the tremendous savings you 
could have if the Federal Employee Health Benefits plan were to 
take a similar approach with your 8 million members.
    Other employers and unions have effectuated meaningful 
change, but it is often against strong headwinds from the 
industry that profits from the status quo. The State of New 
Jersey and their unions achieved billions in savings by 
launching a payment integrity program and a PBM reverse 
auction. SEIU 32BJ used data to stop egregious billing, and a 
small Pennsylvania county has identified 4 million in savings 
by negotiating directly with hospitals.
    The Hospital Transparency Rule was passed in order to allow 
plans and consumers to compare prices of services and supplies 
across hospitals. Patient Rights Advocate reports only 25 
percent of the hospitals have published complete machine-
readable files containing all of the required files which are 
needed for a consumer, and especially for an employer, 
providing benefits.
    The Consolidated Appropriations Act mandates employers to 
have full access to their data, yet carriers are blocking them 
at every turn, evidenced by a string of lawsuits. Owens & 
Minor, a large, publicly traded company headquartered in 
Virginia, has been forced to sue Anthem to get their plan data 
after 18 months of demands. A recent survey found that 89 
percent of the voters believe Congress should take action to 
reduce health--hospital prices, and 72 percent are in agreement 
that the prices should be limited to two times the Medicare 
rate.
    We can and we must do better. The State of Montana plan did 
it, other employers are doing it, and the Federal employee 
health plan can do it. But we have to have price and cost 
transparency.
    Thank you again for your bipartisan leadership.
    [The prepared statement of Ms. Bartlett follows:]
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    Mr. Guthrie. Thank you. The gentlelady yields back.
    Now the Chair now recognizes Ms. Tripoli for 5 minutes for 
your opening statement.

                  STATEMENT OF SOPHIA TRIPOLI

    Ms. Tripoli. Chair McMorris Rodgers, Ranking Member 
Pallone, Chair Guthrie, Ranking Member Eshoo, members of the 
committee, thank you for the opportunity to testify today. It 
is an honor to be with you this afternoon.
    On behalf of Families USA, a leading national, nonpartisan 
voice for healthcare consumers working to ensure the best 
health and healthcare equally accessible and affordable to all, 
I want to thank you for this critical discussion on healthcare 
affordability, transparency, and competition.
    Today's hearing is urgently needed. Our healthcare system 
is in a crisis, evidenced by lack of affordability and poor 
quality. It will take all of us working together across 
political parties from rural and urban communities alike to fix 
it.
    Every person in the United States should have affordable, 
high-quality healthcare that prevents illness, allows them to 
see a doctor when they need it, and helps to keep their 
families healthy. Yet almost half of all Americans report 
forgoing medical care due to the costs. A third say that the 
cost affects their ability to secure basic needs like food and 
housing. And over 40 percent of American adults, 100 million 
people, face medical debt. Unaffordable healthcare is a 
persistent problem for national and State governments and 
affects the economic vitality of middle-class and working 
families.
    Despite this financial burden, our health is not better. 
Our moms and babies die at higher rates, and a quarter of a 
million people a year are killed by the healthcare system for 
medical errors, infections, and the like. Make no mistake: 
America's families are suffering, and swift action is needed.
    At its core, this crisis is driven by a misalignment 
between the business interests of the healthcare sector and the 
health and financial security of our Nation's families. 
Healthcare industry consolidation has eliminated competition 
and allowed monopolistic pricing to push our Nation's families 
to the brink of financial ruin. Americans of all watched as 
their local hospitals have become health systems, and those 
systems were bought by large healthcare corporations to 
increase prices year after year. These higher prices are passed 
on to families as annual increases, and insurance premiums and 
cost sharing have become profit margins for large hospital 
corporations.
    Since 2015, hospital prices have increased as much as 31 
percent nationally, now accounting for nearly one-third of U.S. 
healthcare spending, and growing four times faster than 
workers' paychecks. And these prices are irrational, with a 
knee replacement costing three times as much in Sacramento, 
California, than in Tucson, Arizona, and an MRI at Mass General 
Hospital in Boston, Massachusetts, ranging from $800 to $4,200, 
just depending on the insurance carrier.
    Particularly concerning is that healthcare is one of the 
only sectors in the U.S. economy where consumers are blinded to 
healthcare prices until after they have received a service and 
a subsequent bill. This lack of transparency is a major barrier 
to the healthcare sector competing based on fair prices and 
high-quality care.
    But it doesn't have to be this way. We know what is driving 
the crisis, and we know how to fix it. Solutions can be 
deployed right away to end these pricing abuses, restore 
competition, and make healthcare more affordable.
    We urge the committee to consider well-vetted, bipartisan 
solutions, including strengthening and codifying price 
transparency rules, addressing payment differentials that 
incentivize consolidation and drive up costs, and limiting 
anticompetitive behavior in provider and health plan contracts.
    Ultimately, the healthcare sector's economics must change 
to align with the health and financial security of the American 
people. Congress has overwhelming public support to do this: 93 
percent of Americans agree that we pay too much for the quality 
of care that we get, and 9 in 10 voters believe that Congress 
should act to reduce hospital prices.
    I would like to finish my remarks with the story of Kynghee 
Lee from Ohio to illustrate just how anticompetitive these 
prices have become. Ms. Lee has arthritis, and once a year goes 
to a rheumatologist for a steroid injection in her hand to 
relieve her pain. Each round of injection costs her $30. But in 
2021, when she arrived at her usual office to see her regular 
rheumatologist, she found they had moved up one floor in the 
building. She thought nothing of it until she received a bill 
for nearly $1,400. Ms. Lee's infusion clinic was moved from an 
office-based practice to a hospital-based setting, resulting in 
a price increase of more than 4,500 percent for the exact same 
service from the exact same provider.
    This is a national scandal. This committee has the power 
and responsibility to stand up for our Nation's families and 
stop pricing abuses driven by big healthcare corporations.
    I thank the committee for your time and look forward to 
answering any questions you might have.
    [The prepared statement of Ms. Tripoli follows:]
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    Mr. Guthrie. I thank you for your testimony. I appreciate 
it.
    I will note there is a vote on the floor. We still have 318 
left to vote, so I know we are going to have time for the 
next--to finish our opening statements, and then we will--
probably one or two people may be able to ask questions. We 
will see how it moves forward.
    But now, Dr. Ippolito, I will recognize you for 5 minutes 
for an opening statement.

              STATEMENT OF BENEDIC IPPOLITO, Ph.D.

    Dr. Ippolito. Well, thanks very much, Chairman Guthrie, 
Ranking Member Eshoo, and members of the subcommittee. My name 
is Benedic Ippolito. I am an economist at the American 
Enterprise Institute here in Washington, D.C.
    You know, the high costs of healthcare underpin nearly 
every health policy debate that we have and, frankly, many 
nonhealth policy debates. Rising costs in programs like 
Medicare and Medicaid create budgetary pressures for the 
government, right? That stresses tax bases, and it crowds out 
other valuable uses for that fund--those funds. Whether it is 
lowering taxes, whether it is spending money on other programs 
you like, you can't do it if healthcare is taking all the 
money.
    Within the employer-based market, rising insurance costs 
eat away at the wage growth of workers. And across all of those 
settings, it becomes more expensive to expand insurance, either 
to cover more people or to cover more services. Of course, all 
of that isn't necessarily a problem, per se, if we think that 
healthcare spending reflects the demands of consumers, their 
preferences, right, be it clinical quality, nonclinical value, 
convenience, whatever it might be.
    However, at this point there is very ample evidence that 
much of our spending reflects market frictions and 
inefficiencies rather than consumer preferences. And I think 
this hearing today is highlighting two key sources of those 
frictions.
    Markets require informed consumers who have meaningful 
choice. If purchasers--whether it is individuals, a State 
health plan, an employer--if they do not have any meaningful 
choice, then their decision reflects nothing about their 
preferences, it just reflects the fact that that was the only 
option they had. And the same goes for a purchaser who doesn't 
have any information. If you make a choice but you don't really 
know the full cost of that PBM, insurance plan, whatever it is, 
well, that choice doesn't really reflect your underlying 
preferences. And that really is the fundamental problem here.
    So in both of those cases, we have high prices that can 
persist for reasons that are divorced from value. So economic 
theory and empirical evidence are very clear that improving 
competition within healthcare markets increases pressures on 
firms to improve quality and decrease costs. Increasing 
transparency in conjunction can help market actors make the 
best use of the choices that are made available to them and 
push markets to invest in the things they value by providing 
clear signals, by moving with their feet--voting with their 
feet, if you will.
    In other words--and I do think this is the key point here--
more competition and transparency doesn't just lower spending 
in some indiscriminate manner. Rather, it targets spending that 
does not reflect value to consumers. And that is the key point, 
I think, to this hearing.
    Beyond this, policies that make progress along these 
dimensions, particularly transparency, are important for 
informing the policymaking process. We need an accurate 
understanding of how markets work and when they do not. That is 
key to redesigning incentives that, for example, may affect 
consolidation incentives that were brought up earlier, and 
understand when more active intervention is justified.
    And I will just take a moment to highlight we are probably 
going to talk about a lot of policies that are informed by the 
last 10 or so years. There has been an explosion of 
understanding of the commercial healthcare market. We much 
better understand the prices and the spending in those markets, 
how important consolidation is, and that is a direct function 
of the fact that we have much better data today about 
commercial healthcare prices than we did, say, 10 or 15 years 
ago.
    In my written testimony I emphasize a host of specific 
policy options that can help address high healthcare costs by 
increasing competition and transparency, with a particular 
emphasis on those that have attracted bipartisan interest in 
recent years. And I will just note that that was coauthored 
with Loren Adler of the Brookings Institution and was recently 
copublished by AEI and Brookings. I am not going to summarize 
that list now, but I will note that this is an issue that spans 
just about every part of healthcare.
    And so that is a long way of saying that this hearing is 
keying in not just on healthcare costs in general, but rather 
two of the most important underlying sources of inefficient 
spending in healthcare markets.
    And I thank you for the invitation to be here today, and I 
look forward to your questions.
    [The prepared statement of Mr. Ippolito follows:]
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    Mr. Guthrie. The gentleman yields back.
    Like I said, there is a vote on the floor. There are two 
votes. And so we are going to recess the committee. And as soon 
as the second vote is cast, I am going to come straight back. 
So--and then I will be the first one recognized. So people, 
plan to get back accordingly. I appreciate it.
    The committee will be in recess.
    [Recess.]
    Mr. Guthrie. The committee will come back to order.
    It is now time for Members' questions, and the Chair will 
recognize himself for the purpose of--5 minutes for the purpose 
of asking questions.
    So, Ms. Bartlett, I know that you were in the Montana 
healthcare policy, and so my question is, what I--we want 
individuals out shopping for their healthcare. We want 
individuals to have access to that, and shop for their 
healthcare.
    But I think what is going to drive the system more--I mean, 
it would be difficult if I was in your situation in Montana, 
and calling, trying to make a--negotiate with hospitals, 
whatever. But when you have 21,000 covered lives--I think that 
is what you had--it is more bargaining power, I would say, for 
you to move forward. And I think getting our big employer 
groups involved in this would be important to really--to make 
this work the way that we think it should work.
    And so my questions were, what did you find--where did you 
find the most excess spending in Montana?
    And then what were a couple of the biggest drivers in 
spending?
    And as you spent less, did your employees have less care, 
or did you spend less and they still had quality care? Because 
we all want to make sure we have quality as well.
    So I would like to ask you that: What were the big costs, 
what were the big drivers of your costs, and as you spent less, 
did they have less care?
    Mr. Bartlett. Well, thank you, Chairman Guthrie.
    Our biggest spend was in hospitals. And being an accountant 
and getting my data, I analyzed it, and 43 percent of our plan 
spend were in the Montana hospitals. So I knew I had to hit 
that first.
    And we didn't have price transparency. I would argue we 
still don't have it now, totally. But what I did was run my 
claims through an independent Medicare repricer to see what I 
was paying at different hospitals as a multiple of Medicare. 
And I found the highest was 611 percent. And I found a range 
that two of the hospitals were at that had high quality. And to 
me, they became the efficient hospitals, and I definitely 
negotiated to get them in the range. So we did separate 
contracts with each hospital to negotiate to get in the range.
    I also implemented Health Care Blue Book, which would show 
prices as red, yellow, green and quality as red, yellow, green, 
so that employees could shop right now.
    I do believe that at that point employees were looking for 
a full bit of information to make decisions, but I also feel, 
as an employer, I was a fiduciary. I had to make sure only 
reasonable costs were spent, and I was also a steward of 
taxpayer dollars. So I had to make sure everything was 
transparent. I knew the Medicare rate, and I could verify 
whether or not they were.
    Now, you raise a really good question about the size of 
employer. I had a total of 31,000 lives on the plan.
    Mr. Guthrie. Oh, 31,000. I thought it was 21.
    Mr. Bartlett. And yes, that did give me bargaining power. I 
have worked with employer forums, employer groups that bring 
together employee plans to do that. They still are struggling 
to get their data from their carrier, and they also come up 
against a wall with the carriers and with the consultants, 
large brokerage firms, any brokerage firm who has a vested 
interest to keep them where they are because of commissions.
    So transparency of the whole chain of middlemen and payers, 
I broke a lot of that out. I fired Aon, I did my own data 
analysis, and I fired our TPA, I fired our PBM, and contracted 
differently.
    Mr. Guthrie. Well, so I guess my question--you know, I used 
to work in the automotive supply business. And I will tell you, 
if I had a 611 percent markup on a product that I was selling 
them, the CEO of said automotive company would have fired the 
buyer buying from me moving forward.
    But the question is just how you know the price. So we want 
to get into transparency, where people know the price they are 
shopping for. I don't know if it is too high, too low, or 
whatever, but the market can determine that if people know what 
the price is.
    And so, as we develop transparency, what do you think are 
the one or two things that absolutely are musts for us to make 
sure that you have access to? Because you said you went to a 
lot of effort, and lot of people aren't going to have that kind 
of buying power. So what is an absolute must for you to know 
what the marketing----
    Mr. Bartlett. I think two things you need. In my world it 
was--hospital prices was the big thing, although I did save 23 
percent on pharmacy. But you needed to make sure you have the 
price. And we are starting to see that in a few of the hospital 
price transparency files that are complete. I can see the 
prices by every plan, and I can see the cash price. And I have 
been surprised.
    And STAT published an article showing that 55 percent of 
the charges are--cash price are lower than the insurance-
negotiated rate.
    Mr. Guthrie. Well, thank you. I am sorry I am out of time. 
I had some more questions. I had some for Mr. Severn, and I 
will submit those for the record.
    The Chair now yields back to himself and will recognize the 
gentlelady from California, my friend Ms. Eshoo, for 5 minutes 
for questions.
    Ms. Eshoo. Thank you, Mr. Chairman, for holding this 
hearing.
    And to each of the witnesses, I think you all are terrific. 
You are highly instructive, given your experience, where you 
come from, what you do.
    This is about transparency and, like, who can be against 
transparency, right? Except there are some people that are. So 
this is an important hearing.
    I have to say, though, that I am somewhat skeptical that 
patients pick hospitals based on price. I think we go to the 
hospital that our insurance network covers. Because people 
that--their out-of-pocket costs are what are foremost in their 
mind. I think that insurers need to negotiate prices to lower 
hospital costs. And in some areas, you know, there are health 
systems that have been bought up--that have bought up every 
practice in town, and they can demand insurers pay whatever 
price they set.
    So I think that in this whole examination, Mr. Chairman, we 
need to bring the insurers in here and the PBMs. We really want 
to get at hidden costs and how they operate, and then how we 
should operate based on how they operate. I think that that 
would be an important examination for us. Great.
    To Dr. Ippolito, it is nice to see you again. Thanks for 
coming back to the committee. Civica Rx is, as you know, it is 
a nonprofit drug company. They announced in August that it 
would offer an important generic drug to treat prostate cancer 
for $160 a month. This is about $3,000 a month less than the 
average cost for someone on a Medicare Part D plan. But many 
health plans are having trouble getting this lower cost to 
their members because of obstruction by PBMs.
    So I think there is an evident answer to my question. Why 
do you think PBMs--what do you think they have to gain by 
keeping their costs so high for Medicare beneficiaries?
    Dr. Ippolito. Well, I mean, PBMs are certainly at the--they 
have long been blamed for the phenomenon of very high-list 
prices for many brand drugs. And particularly in Medicare Part 
D----
    Ms. Eshoo. Right.
    Dr. Ippolito [continuing]. That can really----
    Ms. Eshoo. But why do you think they are doing it?
    Dr. Ippolito. It is because they get paid on the rebates, 
the differential----
    Ms. Eshoo. It is all about money.
    Dr. Ippolito [continuing]. Between the list and the net 
price.
    Ms. Eshoo. Right, it is all about money.
    What would you suggest to us that we do to get at how PBMs 
manipulate costs this way? That is a--I mean, this is a 
stunning difference right here.
    Dr. Ippolito. Yes, I----
    Ms. Eshoo. You know, $160 a month versus over 3,000 and 
over.
    Dr. Ippolito. Yes, it is an enormous difference. And I 
think the central point, the big difference between list and 
net prices in the drug market represents one of the most 
dysfunctional parts of healthcare, at least in its current 
form. So anything you can do to try and align lists and net 
prices in the drug market aligns--it doesn't just lower the 
out-of-pocket for the senior taking that drug. What it does is 
it aligns the incentive. Suddenly, the insurer has the same 
incentive to negotiate for the same low net price that the 
consumer gets at the out-of-pocket--out-of-pocket, right?
    So I think, in terms of conceptual approach, that is the 
key: aligning the list and the net price in the drug market.
    Ms. Eshoo. Thank you.
    To Ms. Tripoli, welcome back. I know Families USA has 
testified at our subcommittee many, many times to the 
betterment of the hearings and what we do.
    Sutter Health has--is really dominant in my congressional 
district, and they have a new CEO that came in and met with me 
maybe a few weeks ago--3 weeks ago, something like that, very 
recently--and before he even asked me what I had on my mind, I 
told him. And at the top of my list was that they were turning 
away new patients with traditional Medicare but accepting 
patients who have Medicare Advantage and private insurance.
    Obviously, I don't support that. I don't support that 
practice. And these complaints have come from my constituents. 
When I asked him about it, he said that as they moved to hire 
more doctors, that that would--that policy would not remain in 
place. But when we circled back with them, they had changed 
their mind about it. Not a good policy.
    Is this--in your view or your understanding, is this a 
common practice of health systems nationwide?
    Ms. Tripoli. Thank you for the question, and I would agree 
that is--it is outrageous. I think it is just another example 
of how broken the markets have become, where we have large 
systems like Sutter with dominant power, and they are able to 
make all kinds of decisions about prices, turning away patients 
because of the types of rates that they are getting. So it is 
completely, completely unacceptable, I would agree.
    Ms. Eshoo. But what it is is that the privately insured are 
favored over the publicly insured. So how would you address 
that? What would you recommend this committee on a bipartisan 
basis to do?
    Mr. Guthrie. You have got to sum up there, when----
    Ms. Eshoo. Mm-hmm.
    Ms. Tripoli. I think it is the very solutions that we are 
here----
    Ms. Eshoo. Oh, it is way over.
    Ms. Tripoli [continuing]. To talk about today.
    Ms. Eshoo. You can respond in writing to me in length.
    Mr. Guthrie. OK.
    Ms. Eshoo. Thank you.
    Thank you, Mr. Chairman.
    Mr. Guthrie. Yes, we want to hear your response.
    Ms. Tripoli. Thank you for the question.
    Ms. Eshoo. Yes, we need the response.
    Mr. Guthrie. So the Chair now recognizes Chair Rodgers for 
5 minutes for questions.
    Mrs. Rodgers. Thank you, Mr. Chairman. I have long said 
that price transparency is foundational to restoring the 
doctor-patient relationship. And as I mentioned in my opening 
statement, we have studies that show billions in savings for 
the healthcare system.
    I wanted to start by asking each one of you if you agree, 
yes or no, that robust price transparency will empower patients 
and help with the downward pressure on prices.
    I will start----
    Mr. Severn. Yes. Yes.
    Mrs. Rodgers. I will just go across.
    Mr. Severn. I will start real quick. I mean, there is a 
reason I dropped everything and started a business with a bunch 
of great people to work on this. It is a really big event that 
all these prices are now public.
    In the first effort over these past 2 years, especially for 
innovators that jumped in, is get all the data and create 
market forces. I am not an economist, but----
    Mrs. Rodgers. OK, thank you.
    Mr. Severn [continuing]. Before----
    Mrs. Rodgers. I want to keep this going.
    Mr. Severn. Yes, oh, yes.
    Mrs. Rodgers. OK, Mr. Forge, yes.
    Thank you.
    Mr. Forge. Yes, absolutely.
    Mrs. Rodgers. Thank you.
    Mr. Forge. Yes.
    Mr. Bartlett. Yes, absolutely, too.
    Mrs. Rodgers. Thank you.
    Ms. Tripoli. Yes.
    Mrs. Rodgers. Great.
    Dr. Ippolito. Yes.
    Mrs. Rodgers. Great. We are unified.
    So coming back to Mr. Forge, I am just personally very 
proud of the work that you have done at Pullman Memorial 
Hospital, a critical access hospital in eastern Washington 
leading the charge on price transparency. And it is clear that 
you also believe that you are doing right by your patients. 
Hospitals around the Nation should look to Pullman as an 
example.
    So do you believe that your experience is one that can be 
scaled and replicated nationwide?
    Mr. Forge. Well, I think, you know, first of all, I think 
transparency is always good. You know, we are all really smart 
people, and we can solve problems. If they are under the table, 
we are going to have a difficult time doing that. So I think, 
first and foremost, getting these challenges on the--you know, 
pricing and these things--on the table is how we are going to 
solve them.
    I think it is a big challenge as you are looking across the 
country. We are going to have to prioritize it as a key 
strategy, because there are so many priorities in healthcare.
    So absolutely, I think it can be scaled.
    Mrs. Rodgers. Thank you. Would you speak to recommendations 
that you have for improving hospital transparency experience, 
while making sure that the data is available to patients and 
employers?
    Mr. Forge. Well, I think making--I think data is going to 
be the key to it. I think right now we are having to fight to 
get access to data. But once we do have access to data and we 
are sitting down with our partners like we are doing with the 
business community in Pullman, we are able to come up with 
solutions that make our communities a great place to receive 
care, a great place to live, and a great place to conduct 
business.
    Mrs. Rodgers. Great. Thanks again for being here.
    Mr. Forge. Thanks for having me.
    Mrs. Rodgers. Mr. Severn, I--you know, so we all agree on--
that price transparency is important.
    There's been a lot of issues with the hospital 
requirements. And unlike Pullman, not all the hospitals are in 
compliance with the CMS standards. And, you know, we need to 
have data quality completeness and user friendliness.
    So I wanted to ask, Turquoise helps hospitals come into 
compliance with the Federal regulations. If we increase 
hospital standards for data quality and completeness, do you 
have advice on the biggest challenges hospitals face?
    And are there ways that we can help mitigate those 
challenges while increasing the quality of the data and 
compliance?
    Mr. Severn. Yes, there was--it is a great question. There 
was a big initial setup of publishing this data for hospitals 
in Pullman and a lot of others, and they had to guess on a 
format, because there was no standard format. With the payer 
rule, there was a prescribed format: the table looks like this, 
the columns are named this. And hospitals would have 
appreciated that and, you know, innovators and folks using the 
data would have appreciated that.
    And so, you know, we now have a suggested standard that 
came out, and I would suggest making that enforced. And I think 
that also helps hospitals know, if we follow this standard, we 
are in compliance, we are not guessing, and we don't have a 
question mark when CMS comes and looks at our file.
    Mrs. Rodgers. And I would also like you to speak to how you 
believe this is going to improve patient care. So increased 
compliance, better data, how is that going to bolster the 
patient-facing transparency, and ultimately directly helping 
patients?
    Mr. Severn. Yes, there was a great point earlier about will 
patients shop for care. And, you know, I hope they do, we are 
banking on it.
    But, you know, when my primary care doctor says, ``Hey, you 
need an MRI'' and there are four health systems in San Diego, I 
want those prices in front of my primary care to say, ``Hey, 
you could go to any of these four. You could save $1,000 if you 
go to Sharp instead of UCSD.'' And so, by making a standard, 
you speed up that data reaching the EHR in front of the doctor, 
so that they have that data in front of them.
    Mrs. Rodgers. Well, again, it is just--thank you all for 
being here. I really appreciate your input on this important 
issue. And we are--we have more work to do.
    Thank you, I yield back.
    Mr. Guthrie. I thank the gentlelady for yielding back, the 
Chair for yielding back. The gentleman from California, Mr. 
Cardenas, is recognized for 5 minutes for questions.
    Mr. Cardenas. Thank you, Chair Guthrie and Ranking Member 
Eshoot, for holding this hearing, and thank you to our 
witnesses for being here to give us your expertise and your 
opinions.
    Americans are getting crushed by skyrocketing healthcare 
costs. Medical debt is weighing down far too many people, 
preventing them from spending on basic necessities and causing 
deeper financial pain beyond their healthcare. It is shameful 
that an individual's health can completely derail them 
financially. And what is worse, in most cases there is no 
information about how to make the best decision about their 
care.
    I am glad to see new rules being instituted to increase 
transparency about cost and coverage and in hospitals and 
healthcare settings. But there is still much to be done to make 
sure these rules are implemented in a way that is usable and 
easy to understand.
    I apologize, I am having a hard time reading my notes 
because I have allergies. And I was talking to one of my doctor 
colleagues, and he goes, ``Let's go walk outside. It is a 
beautiful day,'' right? I forgot that I am probably going to 
get hit with my allergies. By the time I got to this building, 
I can barely see, and my eyes are watering. And I was walking 
with a doctor. My point is he couldn't help me in the moment.
    So access is real and different for every person. And in 
America, it appears, in my opinion, in districts like mine, 
which are a little bit lower-income than average, access and 
how we communicate with people really can make the difference 
as to whether or not they are going to get the care that they 
deserve and need, even though they might have insurance, even 
though they might have coverage. How to access that coverage is 
a real issue.
    So, Dr. Ippolito, thank you for providing your remarks 
today, and I hope I said your name right. That is the way I 
used to call my uncle. His first name was Hipolito. You are the 
second person in my life I have met with the same name.
    Part of having real transparency is ensuring that the 
information is accessible and understandable to everyone. To 
your knowledge, what efforts are being made to ensure that cost 
disclosures and comprehensible and easy, accessible--that are 
comprehensible, and easy, accessible for all, including for 
those with limited health literacy or reduced access to digital 
platforms?
    Dr. Ippolito. Well, I think the answer to that is there is 
sort of twofold. The first is that making sure that the 
submitted forms come in some type of reasonable format that 
includes both the raw data that is submitted to places like 
Turquoise that they use, and the stuff that is put in the user-
friendly format. But the second piece of this is places like 
Turquoise.
    I mean, this is how markets work. Sometimes information is 
put out, and it is complicated. But Consumer Reports exists. 
You don't need to know everything about a car and everything 
about an engine to understand which one is better and which one 
is worse. And so there really is a role for places just like 
Turquoise, actually.
    Mr. Cardenas. Thank you.
    In districts like mine, Spanish is the primary language for 
many, many families. And to your knowledge, what efforts are 
being made to ensure that non-English speakers can still have 
the same tools at their disposal to make informed decisions?
    Dr. Ippolito. You know, I am not sure about the answer to 
that question right now. I would have to look it up after.
    Mr. Cardenas. OK, thank you very much. Does anybody have an 
answer to that question?
    Please.
    Ms. Tripoli. I think on the price transparency requirements 
in particular, my understanding is there is not a requirement 
for the information to be in any other language other than 
English.
    Mr. Cardenas. OK. Well, thank you for that. I think that in 
this very diverse country, we should make an effort to at least 
make sure that it is accessible to people, and that if there's 
language barriers, we have the technology and the ability to 
make it more accessible, which at the end of the day means 
better outcomes for individuals, for people. So thank you for 
that answer.
    I also want to acknowledge the impact of the cost of 
medications on American families as well. I am thrilled that 
the Inflation Reduction Act was signed into law, and with it 
the many provisions to lower drug costs. But there are still 
several aspects of the drug-pricing pipeline that are unclear 
at best. As we turn our attention more to the role of pharmacy 
benefit managers, or PBMs, as they are called, in the cost of 
drugs, I am left wondering why there is so little transparency 
in this space.
    Dr. Ippolito, how might greater public transparency around 
rebates and who they go to impact costs? Can you discuss some 
of the benefits that we could expect?
    Dr. Ippolito. Yes. PBMs are extraordinarily--have 
extraordinarily complicated contractual relationships. And when 
you say PBMs, I would include things like PBM aggregators that 
are at a whole different level but affiliated with those 
entities as well.
    The problem is it makes it extremely difficult if you are a 
plan sponsor, if you are an employer, to evaluate that contract 
and compare two PBMs to each other if the contracts are very 
complicated, there's 20 different fees, and you may or may not 
even be getting all the rebates passed through to you.
    So the point about simplifying that information, making it 
clear to the person purchasing the plan how much this costs and 
what exactly I am getting suddenly makes it much, much easier 
to compare one PBM versus the other.
    Mr. Cardenas. Thank you very much.
    With that, I will yield back the balance of my time.
    Mr. Guthrie. I thank the gentleman for yielding back. The 
Chair now recognizes Dr. Burgess for 5 minutes for the purpose 
of asking questions.
    Mr. Burgess. I thank the chairman. Great panel today. I am 
glad we are doing it.
    Transparency is something that is--a lot of us talk about. 
It has been very, very difficult to achieve. I would be remiss 
if I did not acknowledge the signing of the Executive order in 
June of 2019. I was down at the White House when that happened, 
and I could not believe the people in the audience that day and 
how genuinely excited they were that someone at some level had 
finally elevated this to the point where something was actually 
going to get done.
    I--you know, as a Member of the House, and Article 1 in the 
Constitution, I don't think Executive orders are the way to go, 
I think we should do it legislatively. But we had not been able 
to do it legislatively. So the President did it with an 
Executive order and, to my surprise, it did not disappear 2\1/
2\ years ago, when the presidency changed.
    Well, Mr. Chairman, I would like to ask--it is a short 
document, but it is a phenomenal document, so I would ask 
unanimous consent to introduce into the record President 
Trump's Executive order on price transparency.
    Mr. Guthrie. Any objection?
    Seeing none, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. So, Dr. Ippolito, let me ask you. And one of 
the things I have worked on for a number of years--I never 
understood why in the Affordable Care Act they carved out and 
said physician-owned practices or physician-owned hospitals 
could not expand after the passage of the Affordable Care Act.
    So I have a bill with Henry Cuellar of Laredo. It is a 
bipartisan bill to repeal the ban on physician-owned hospitals. 
Personal experience myself, owning an ambulatory surgery 
center, my dad, who was a general surgeon, actually had a 
physician-owned hospital when he was in practice--I think 
doctors understand what it takes to make a hospital run, and 
they want the best facility for their patient. They want their 
patients to go to a facility that meets their needs and is 
obviously of top notch in quality.
    I have worked with a hospital in McAllen, Texas, Doctors 
Hospital Renaissance, for many years on these policies. They 
operate on the Texas-Mexico border, a 530-bed general acute 
physician-owned hospital. During the pandemic, Doctors Hospital 
Renaissance converted its rehabilitation hospital--
rehabilitation unit into a 102-bed COVID hospital in a matter 
of 10 days. They had to get a waiver from CMS to do that 
because they weren't allowed to expand as a physician-owned 
hospital. But a phenomenal service they provided in a part of 
the world that really wasn't receiving much in the way of 
services.
    And then, in addition to all of that, prior to COVID they 
received an accreditation for and opened several medical 
residency programs in primary care to bolster the physician 
workforce in what is a very underserved area of our State.
    So I would just like to hear your thoughts on the value of 
physician-owned hospitals. If we are going to combat 
consolidation in the healthcare space, physician-owned 
hospitals, do they play a role in this?
    Dr. Ippolito. Yes. I mean, I think one of the lessons over 
the last, say, 20 or 30 years is that we ought to take any 
competition where we can get it in healthcare markets. And, you 
know, the bar ought to be very high for impeding entry of new 
competitors. And so, yes, there is some concern about, you 
know, potential cream-skimming with physician-owned hospitals. 
But to be completely honest, I don't really know that it is 
more acute in those settings than it is in, say, an environment 
where an insurer is vertically integrated with physicians. So 
that is a long way of saying----
    Mr. Burgess. Yes.
    Dr. Ippolito [continuing]. It is a reasonable addition.
    Mr. Burgess. I would refer you to an article in Health 
Affairs of March of 2007 that I wrote that actually refuted 
that concept. Brilliant article.
    [Laughter.]
    Mr. Burgess. So let me ask you this: Is there anything 
that--else we can be doing to support the smaller and 
independent practice of medicine?
    Dr. Ippolito. Yes, I mean, there's a number of things. I 
guess there's two buckets. One is getting rid of barriers to 
entry for new competitors. So whether that is certificate of 
need laws in some States--I don't think Texas has one----
    Mr. Burgess. Not anymore.
    Dr. Ippolito [continuing]. But I think a number of other 
States have them still. Whether it is scope of practice, trying 
to make sure that people can actually practice up until their 
training. And on the other end, you have got to think about 
other policies that really do make it difficult for physician 
practices to compete with hospitals. Getting paid much less to, 
for example, administer a drug compared to a hospital-based----
    Mr. Burgess. Right.
    Dr. Ippolito [continuing]. Facility suddenly makes it very 
difficult for that kind of facility to----
    Mr. Burgess. So site neutrality is something this committee 
should focus on.
    Let me just ask you one last question. Mark Cuban came into 
our Doctors Caucus a few weeks ago and talked about his 
company, Cost Plus Drugs. They offer generic drugs at a 
discount, transparent price by removing PBMs altogether. Do you 
see a future for that type of activity?
    You talked about a line list of net prices. It seems like 
that is what is being accomplished there.
    Dr. Ippolito. Yes, at least for some drugs it seems like 
there is a reasonable future for that kind of arrangement.
    It is going to be challenging in the big-name brand drug 
market to do that. But on the plus side, it is another sort of 
effort to chip away at the current standard of very high list 
prices and low net prices. We have seen that in other places. 
We have seen insulin makers lower list prices. We have seen by 
biosimilar makers that are competing with Humira offer products 
at lower list price versions. And so I think the totality of 
evidence suggests there is at least an effort to move in that 
direction.
    So that is a reasonable goal, and I think that is one way 
to do it.
    Mr. Burgess. Thank you, Mr. Chairman. I will yield back.
    Mr. Guthrie. I thank the gentleman for yielding back. The 
Chair now recognizes Dr. Ruiz for 5 minutes for the purpose of 
asking questions.
    Mr. Ruiz. Thank you all for being here today.
    High healthcare costs continue to be a challenge for 
American families. About half of Americans have reported 
difficulty affording healthcare. Time and time again, my 
constituents tell me they ration or forgo medication or care 
because of the cost. In the emergency department, the first 
question I would get was, ``Am I going to be OK?'' And the 
second question was, ``How much is this going to cost? Am I 
going to be able to afford it?''
    So even in nonemergency healthcare settings, patients 
cannot see prices in advance and are forced to wait until after 
they receive medical care and get the bill to fully understand 
how much they owe.
    Ms. Tripoli, can you discuss some of the challenges 
patients face in navigating the health system and how 
increasing transparency can help patients achieve savings?
    Ms. Tripoli. Absolutely. Thank you for the question. I 
think there are two.
    The big purpose of price transparency is that we have a 
system where we actually don't know what the prices are until 
we get a service and we get a bill. Price transparency helps to 
crack that wide open. The most important pricing information 
that we need in price transparency is the negotiated rate. That 
is the rate that is being negotiated behind closed doors 
between dominant health systems, hospitals, and plans and then 
buried in proprietary contracts with no insight or oversight 
from the public.
    Pulling out that information gives patients the ability to 
say, ``I want to get my MRI for $80 at this facility, and not 
for $3,000 at the one half-mile down the road.'' It has direct 
ability for consumers to be able to shop and also for 
policymakers to be able to intervene where prices have gotten 
too out of control.
    Mr. Ruiz. Thank you. You know, and I agree, patients 
deserve greater transparency in the prices they pay for 
healthcare. But right now, despite the transparency rules that 
went into effect in January 2021, it is still difficult for 
consumers to access pricing.
    So, Ms. Tripoli, in your testimony you discussed how some 
hospitals are failing to fully comply with the Hospital Price 
Transparency Final Rule. Can you briefly discuss how hospitals' 
failure to fully comply with the provisions of the final rule 
is making it difficult for consumers to access critical 
information on pricing?
    Ms. Tripoli. Absolutely. I think that it is just another 
example of the gaming of keeping pricing--prices hidden, how 
broken the markets are, that this pricing information is 
incredibly valuable for hospitals to keep hidden so they can 
increase prices year after year with no insight or oversight 
from the public.
    So I think being able to pull down the pricing information 
is critical. We are seeing hospitals doing everything from not 
posting any pricing information to posting a price as a 
percentage of Medicare, for example, 120 percent of Medicare, 
which is meaningless for most consumers. They are publishing 
information in various formats that are not usable or machine 
readable. They are using a lot of ``N/As'' as examples, as 
well.
    Mr. Ruiz. Yes, so what are some ways Congress can further 
strengthen the final rule?
    Ms. Tripoli. Congress absolutely should be strengthening 
and codifying, increasing--including, as we have heard some of 
the testimony already today about creating more standards 
around the format, outright prohibiting hospitals from being 
able to price--post anything other than a dollar-and-cents 
amount. The actual price is what we need. More streamlining 
around the names of services, so we can actually compare and 
understand what the services are across hospitals.
    And I would also say that increasing the fine for hospitals 
that don't comply. The $2 million max fine is not sufficient to 
incentivize most hospitals to comply.
    Mr. Ruiz. I would also add the out-of-pocket costs for 
patients, as well, given the different health insurances that 
are out there.
    I continue to be concerned with reports of low hospital 
compliance, and I believe Congress needs to further strengthen 
the regulation. I believe we also need to couple transparency 
with policies that will further expand coverage and lower 
healthcare costs.
    So, Ms. Tripoli, can you discuss how the subsidy expansions 
included in the Inflation Reduction Act are helping lower costs 
for families?
    Ms. Tripoli. Absolutely. I mean, the bottom line is that 
our families are facing a healthcare affordability crisis. The 
extensions of the subsidies that were passed through the IRA 
were critical to be able to support families in a moment when 
100 million people are facing medical debt because they can't 
actually afford the cost of care. So we absolutely should be 
extending those subsidies to continue to support families.
    And we also have to address the root problem of what is 
driving our affordability crisis. It is prices, it is 
predominantly driven by prices by hospitals due to unchecked 
consolidation from the last several decades. And so it is 
really--it is critical that we are--it is both/and. We have to 
also look at the root causes to address the affordability 
crisis.
    Mr. Ruiz. Well, thanks to the subsidy expansion in the 
Inflation Reduction Act, millions of families have seen the 
cost of their monthly insurance premiums go down, and the 
average family is saving $2,400 in premiums a year. More than 
40 million Americans are enrolled in the health coverage 
through the Affordable Care Act, the highest total on record. 
It is imperative that we make permanent the enhanced premium 
tax credits.
    So I thank you, and I yield back my time.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Mr. Griffith for 5 minutes for questions.
    Mr. Griffith. Thank you, Mr. Chairman.
    Mr. Severn and Mr. Forge, we have been discussing the 
Hospital Price Transparency Rule, which obligates the 
hospitals, as you have been testifying about, to post the 
``discounted cash price'' for services to their website. But it 
seems like some cash prices are not available at specific 
hospitals.
    Are there any barriers in place prohibiting hospitals from 
complying and posting these cash prices?
    Mr. Forge. I mean, I think there's a lot of challenges 
that's associated with posting cash prices. Fundamentally, they 
are in there. They are--we are talking about lists of 
thousands. I know that we are looking at top 300s, but there is 
a lot in there. We have mentioned the negotiated prices, you 
know, that we are talking about.
    I think the part that we haven't talked enough about is 
transparency around payer strategies. You know, a lot of times 
in healthcare you are talking--in hospitals it is a 24-hour 
business, you know, that we are providing care. And, you know, 
you are looking at, potentially, three service lines that have 
a profit margin that helps support, you know, the other ones.
    I think that, you know, sometimes hospitals have a, you 
know, have a difficulty, you know, sharing some of that. It is 
complicated, and it is difficult to manage. And so that is 
where we are with that.
    Mr. Griffith. And do you agree with that, Mr. Severn?
    Mr. Severn. Yes, cash prices are interesting for hospitals, 
because when this law came out you had 6,000 hospitals--some of 
them didn't have a cash pricing policy. Some did, some didn't. 
And this law forced them to think about cash prices maybe for 
the first time formally.
    And when we think about competition, if you have options, 
and you are uninsured or you have a high deductible and you 
want to cash pricing option, Pullman or a hospital can say, 
``Hey, we have a clear menu of cash prices, come on in.'' And 
to me, that is competition.
    And so, if there is a hospital that hasn't come up with a 
clear cash pricing strategy or is late to the game, that is 
just market competition. And we--you know, we would hope to 
display sort of cash pricing certainty on the Turquoise website 
to reward forward-thinking hospitals doing that.
    Mr. Griffith. And let me continue, Mr. Severn. How can HHS 
strengthen the price transparency rules and improve compliance 
so that consumers and tech developers can access all prices 
systemwide and more meaningfully shop for the best care?
    Mr. Severn. Is this a question about the hospital rule, or 
payer rule, or both combined?
    Mr. Griffith. Let's go with both.
    Mr. Severn. OK. So on the hospital rule, you know, we have 
had 2\1/2\ years with this. It is enforcing the standards. So 
adopting the standard as required, and enforcing it.
    On the payer rule, you know, because it is all items and 
services for all providers, the data is just so much bigger. 
You know, I wish we had a scale replica of the comparison in 
size. And for that it is more course correction. There is a 
good process that CMS has going technically for technical 
specifications with the payer rule. I would say continue that 
process, continue iterating. It comes down to minor course 
corrections: adding a few fields, renaming a few fields, being 
more specific. And we will see more proliferation of these 
rates on the payer side.
    Mr. Griffith. Well, and having these rates out there is 
helpful.
    I recently met with a company that works in Ohio: Sidecar. 
I think they have actually worked with you some at Turquoise. 
And what they do is they figure out--based on the region that 
is set up by the ACA, they figure out what the average cost is 
for various procedures, and they cover you. They don't go 
through middlemen. They just say, ``We are going to give you 
the money for the average cost. If you spend more, that is your 
choice. You can spend more, but it is out of your pocket. If 
you spend less, you can save that savings for future medical 
care.'' Or you can click a box that says ``Send me the check.'' 
And I think that is an interesting, disruptor concept. We will 
see how it goes as it goes forward.
    Last week, ProPublica published a report that found Cigna, 
which covers or administers healthcare for 18 million people, 
built a system to instantly reject claims for not being 
medically necessary without its doctors even opening or looking 
at the patient's file to make them go through extra steps.
    Mr. Forge, based on your experience as a hospital CEO, what 
impact does this type of a system do when it automatically 
rejects medical claims? What does it do to the patients?
    And I have got about 39 seconds.
    Mr. Forge. Sure. Well, I talked about it earlier in terms 
of distraction. You know, we have to train and get our people 
ready in denials management, you know, making denials 
management a priority. And so they are working hard, you know, 
to do that. That keeps us away from strategies to help, you 
know, support our patients, you know, up to the right speed.
    So, you know, we have a lot of distractions out there--
those are one of them--that is preventing us from helping our 
patients.
    Mr. Griffith. And in the last couple of seconds that I have 
I would just say that is what makes Sidecar--and I am not fully 
advocating it, I am just saying it makes it kind of 
interesting, because they get rid of all those middlemen and 
you, the consumer, get to help drive what is going to happen. 
And you can either spend more on a doctor if you particularly 
want that doctor, or find somebody who has a lower price or a 
hospital that has a lower price. And I think putting the 
consumers in charge--I understand there are some who may never 
use that, but there's a lot of us out there that would start 
doing it, and that creates the competition Mr. Severn has been 
talking about.
    My time is up, I yield back.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Ms. Blunt Rochester for 5 minutes for questions.
    Ms. Blunt Rochester. Thank you, Mr. Chairman, for the 
recognition, and thank you to our witnesses for your 
testimonies. I am grateful that we are having this hearing 
today that is focused on how the lack of price transparency is 
making healthcare unaffordable for countless Americans.
    The Federal Government has recently made strides toward 
increasing transparency in the commercial healthcare market 
through two important Federal rules. But it is clear that more 
must be done to help Americans struggling with the crushing 
weight of healthcare costs.
    Ms. Tripoli, in your testimony you note that almost half of 
Americans have reported having to forego medical care due to 
cost. Almost a third of Americans indicate that the high cost 
of medical care is interfering with their ability to secure 
basic needs like food and housing. And although 8.2 million 
fewer Americans are struggling with medical debt under the 
Biden-Harris administration, too many Americans continue to 
have problems paying their medical bills.
    Can you give specific examples of how healthcare 
transparency can result in lower healthcare prices, and also 
let our constituents know why we should have faith in the 
policies that we are discussing, that they really will bring 
down cost?
    Ms. Tripoli. Thank you for the question. I think there are 
two pieces to the price transparency rule that are really 
important. One is the negotiated rates and making sure we can 
actually see how irrational prices have become, and then we can 
make informed policy decisions that target where they have gone 
too far in the price gouging direction. The other part of that, 
as was also mentioned earlier, is around making sure that you 
can understand out-of-pocket costs. Those are the two most 
important pieces of information for consumers.
    At the end of the day, price transparency is about 
disrupting the status quo in the hospital business model, which 
is keep prices hidden, buy up the local competition, price 
gouge year after year, all on the backs of the American people. 
So price transparency both for hospitals and for plans helps to 
disrupt that market and give policymakers, purchasers, 
employers the tools and consumers to be able to get a better 
deal in healthcare.
    Ms. Blunt Rochester. Thank you.
    The Hospital Price Transparency Rule requires that 
hospitals publish a consumer-friendly online tool that allows 
people to shop for services and make informed decisions. Yet 
some patients may not have the medical literacy necessary to 
navigate and take full advantage of the online tools.
    Mr. Forge, it sounds like your hospital has been successful 
in developing a tool that is simple to navigate, yet 
comprehensive. What steps did you take to accomplish this, and 
how can other hospitals replicate your success?
    Mr. Forge. Well, a couple of things. We have a transparency 
website that went up in 2019. So we have a place, you know, 
right on our website that is directing patients right there. 
And I think that you hit on a good point that is something that 
we are really working on that I think benefits everybody, which 
is medical literacy.
    You know, I mean, it is a very complicated system and 
difficult for patients to understand. And so we are just trying 
to give multiple methods: a website, but also in-person, you 
know, care conferences. Like I told you, the patient financial 
counselors are really helping to train patients on--right at 
the front end of service, to make sure that they are making the 
right decisions for themselves and their families.
    Ms. Blunt Rochester. Thank you. You know, I am really 
concerned about this because I looked at a couple of these 
websites, and they are not equal. And some are still very hard 
to understand.
    And so, Ms. Tripoli, I would also like to hear your 
perspective on how hospitals can make it easier for consumers 
and employers to compare prices for services and make informed 
decisions.
    Ms. Tripoli. Absolutely. I think, first and foremost, we 
have got to get all the hospitals complying with the basic 
rules. And we know we have got a lot of work to do to be able 
to get there. I think part of that is making sure we have more 
standardization across what the required services are, so that 
when you are looking for an MRI in one hospital, that same MRI 
is showing up in another hospital. There is a little bit of 
variability right now.
    And I think the other piece to point out is we also have to 
clean up the data files. Like, we have to actually have prices. 
We have to have the same standard way for how we are describing 
services, so that consumers can actually understand. You know, 
most folks don't know what a CPT code is.
    Ms. Blunt Rochester. Right.
    Ms. Tripoli. So we need a description to explain, well, 
what does that mean?
    Ms. Blunt Rochester. Exactly.
    Ms. Tripoli. And what price am I getting for that service?
    Ms. Blunt Rochester. Thank you. I have, like, 30 seconds 
left, but Ms. Bartlett, I cochair the Primary Care Caucus, and 
so I was really pleased and interested to hear about your work 
with primary care. Can you tell us how you invested in primary 
care, and how that specifically helped save the plan from 
insolvency?
    Mr. Bartlett. Yes, thank you. We implemented five on-site 
or near-site primary care clinics. Employees and dependents 
could have an appointment online. They could schedule--all 
appointments were 20 minutes. You could do back-to-back 
appointments. We negotiated radiology, ultrasound lab contracts 
with independents that were wonderful. We also had health 
coaches for diabetic care clubs. And so we improved access, 
because the employees had no cost to go to these.
    Ms. Blunt Rochester. That is so powerful.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Guthrie. Thank you. Ms. Blunt Rochester yields back. 
The Chair now recognizes Dr. Bucshon for 5 minutes for the 
purpose of asking questions.
    Mr. Bucshon. Thank you, Mr. Chairman, and I will start by 
expressing my appreciation to the members of this committee and 
the witnesses here today for what seems to be a shared 
commitment to lowering the costs of healthcare by increasing 
transparency and accountability in our healthcare system.
    Many of you know about my long-time interest in a program 
known as 340B, named for a section of the Public Health Service 
Act in which it appears. The 340B drug-pricing program was 
created by Congress in 1992 to enable providers, and I quote, 
``to stretch scarce Federal resources as far as possible, 
reaching more eligible patients and providing more 
comprehensive services.''
    If you take away one thing from my comments today, let it 
be this: I support the 340B program, and I want to see it 
succeed. I want Federal resources to be put to good use. I want 
services to reach more patients, and I want patients to have 
access to more comprehensive services.3
    40B operates by allowing certain entities--theoretically, 
those that serve our most vulnerable populations--to purchase 
prescription drugs from manufacturers at a discount. They are 
permitted to pocket that discount because we expect that they 
are providing disproportionate amounts of charity care for 
patients who are uninsured or underinsured. But because 
Congress failed in 1992 and in the last 30 years since to set 
clear guidelines and parameters for the program, we have no way 
of knowing when the program is being exploited, and we know 
that it is.
    And that is not just my opinion. A GAO report and a report 
from this committee's Oversight Subcommittee a number of years 
ago said so very clearly.
    Although I have heard rumors and have seen smaller-scale 
examples, for the last decade, at least, exploitation of the 
340B program was clearly and strikingly demonstrated in a New 
York Times article published last September. I encourage all of 
my colleagues to read the article, which I will submit for the 
record.
    I ask unanimous consent to submit that for the record.
    Mr. Guthrie. Hearing no objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Bucshon. The gist of this is--and I am quoting again--
``Starting in the mid-2000s, big hospital chains figured out 
how to supercharge the program''--I am quoting from the 
article--``where patients with generous private insurance could 
receive expensive drugs but on paper make the clinic's 
extensions of poor hospitals to take advantage of 340B.''
    The article discusses how a large hospital system in 
Richmond, Virginia--not far from here, in the former district 
of our late friend and former committee member, Don McEachin--
did just that. It purchased a 340B-eligible hospital in a poor, 
predominantly Black neighborhood, used the hospital's 340B 
status to purchase discounted drugs for use at points of care 
across the system, decreased services to patients at that 340B 
hospital, including closing its ICU, and profited to the tune 
of $100 million per year on the 340B program.
    We also know from disclosures of Fortune 500 companies that 
340B is seen for--by profit entities as a revenue generator for 
shareholders. For example, CVS Health, the fourth-largest 
company in the country, warned investors in its 2022 annual 
shareholder filing that changes to the 340B program could, and 
I quote, ``materially and adversely affect the company.'' 
Information like this informs us exactly where the 340B 
discounts are likely not going to: the patients.
    I hope to eventually work on broad, large-scale reforms to 
the program. But in the short term, consistent with this 
hearing, I am calling for Members of Congress to join me in 
advocating for more transparency on the discounts.
    Can we not agree that entities benefiting from the 
discounts need to show the American people what they are doing 
with the savings, and for that matter, what the savings are? 
This wouldn't be difficult, because CMS already requires many 
types of providers, the grantees, to report similar data.
    So Mr. Forge, does Pullman Hospital report its annual 
amounts of charity care and payer shortfall?
    Mr. Forge. Yes, we are required to share our charity care 
outlay----
    Mr. Bucshon. To CMS, correct. And if Congress asked Pullman 
to report how much savings in 340B they receive in the 
aggregate each year, would that be feasible?
    Mr. Forge. I think anything is feasible. I think we can 
share any information that is asked for us--you know, asked 
from us. Transparency in the spirit is what we are looking for.
    I can say that it is a challenging program to manage. We 
have to get outside help to help us manage that.
    Mr. Bucshon. Right, a lot of smaller facilities like yours 
have to have third-party people to do----
    Mr. Forge. Correct.
    Mr. Bucshon [continuing]. That reporting. But it is being 
done, including in my district. And if a small critical-access 
hospital like yours has the ability to collect and submit data, 
I have no doubt that other entities do as well.
    I don't think there is anything hospitals should be afraid 
of when it comes to 340B transparency, honestly. If an 
institution needs this benefit to continue helping patients, 
let them show us so we can support those efforts and make sure 
we have a strong program.
    With that, Mr. Chairman, I yield back.
    Mr. Guthrie. I thank the gentleman for yielding. The Chair 
now recognizes Mrs. Dingell from Michigan for 5 minutes for 
questions.
    Mrs. Dingell. Thank you, Mr. Chairman, and thank you, 
Ranking Member Eshoo, for convening this hearing.
    Nobody--Democrat, Republican, independent, anybody--should 
be harmed by medical expenses. And as healthcare continues to 
rise, it is important that consumers have access to accurate 
pricing information about their healthcare.
    You know, I think the current healthcare system is 
gobbledygook. I am healthy, but for--I have had an infection, 
and I have had three CAT scans at three different institutions 
in the last 3 months. They have all been between 6 and $8,000. 
Medicare covers a few hundred, my insurance covers another few 
hundred, but each of them has a different amount, and the rest 
of it goes into Never Never Land. And I am one of the lucky 
ones, because I have Medicare and insurance. People can't 
understand the system.
    And talk to a pharmacist or a patient these days. Pharmacy 
benefit managers? I had a pharmacist ranting at me that a pill 
that cost them $10 for 30 pills, they were--the pharmacy 
benefit manager was charging the customer $700. It is wrong.
    So the Hospital Price Transparency Final Rule is a step in 
the right direction to improve transparency in healthcare 
prices. It went into effect in January 2021. But since the 
hospital rule went into effect, studies have found that most 
hospitals are not meeting all the requirements of this final 
rule.
    Ms. Tripoli, one concern we continue to hear is the 
difficulties with the erratic compliance, with some estimates 
being as little as 16 percent of hospitals being in full 
compliance of the regulations. What do you think the obstacles 
are to preventing this compliance?
    Ms. Tripoli. Thank you for the question. I think, at the 
end of the day, it is just about the business model of the 
sector, which is to keep prices hidden so that they can 
continue to increase prices year after year on the backs of the 
American people. There is not a strong enough financial 
incentive or requirement to get prices--disclose prices, 
because that pricing information is the most valuable piece of 
information in the hospital business model.
    So price transparency, unveiling prices, requiring the 
negotiated rate to be disclosed for the public is hugely 
powerful, disrupts the status quo, and it actually allows 
policymakers to make targeted decisions about how irrational 
prices have become, and it allows academics to understand where 
does high value occur--value care occurring, where is low-value 
care occurring, and then we can make targeted interventions to 
make sure all people living in this country have high-value 
care.
    Mrs. Dingell. So some of my colleagues were asking this 
question, but I am going to ask it again as, you know, what can 
we do to help encourage that compliance?
    You said there's no incentives. Do we penalize? There is--
what specifically would you recommend we do to start to 
increase this compliance number?
    Ms. Tripoli. I think strengthening and codifying the rule 
into statute is a good step in terms of strengthening on top of 
the requirements that are already there.
    I think specifically prohibiting hospitals from posting 
prices as a percentage of Medicare or a percentage of gross 
charges--so we actually need dollars and cents. Dollars----
    Mrs. Dingell. So talk in English.
    Ms. Tripoli. Exactly, in English. To that point, we 
actually need to understand beyond a confusing code that most 
folks don't understand what that is, a description that puts 
things in layman's terms: What is this?
    We need more standardization across the services that we 
can actually compare apples to apples, and not oranges to 
grapefruits.
    And I would say the other piece that has not been mentioned 
yet is we need quality information. The only way to assess 
high-value care is if we have price and quality together so we 
can determine is that a value product that--and are we getting 
our money's worth for that?
    Mrs. Dingell. Thank you. And I should have said Spanish or 
French or--``layman's language'' is a much better word.
    Ms. Tripoli. Absolutely.
    Mrs. Dingell. Mr. Severn, while the rule also requires 
hospitals to publish the prices of common health services, we 
have heard about challenging--the challenges of accessing the 
data. What kind of data are hospitals currently reporting, and 
how is a lack of standardization contributing to data 
inconsistencies?
    Mr. Severn. Yes, thank you for the question. So with about 
5,100 hospitals in our database now, which is much better than 
2 years ago, we have had to written--we have had to write over 
1,000 unique programs to bring that data in.
    If you had a standard, not only is it easier to ingest all 
the data and enforce compliance, it also puts some pressure on 
the gobbledygook of the rates, because there is now a column 
and a suggested format that--it is a payment method column. And 
if the payment method is really simple--just cash, a full, 
inclusive rate--patients and referring physicians and employers 
will go towards the upfront price. And so, you know, the 
standard will beget competition on simplicity, as well.
    Mrs. Dingell. I am out of time, so I will yield back, Mr. 
Chairman.
    Mr. Bucshon [presiding]. I yield briefly to the gentleman 
from Texas for a unanimous consent request.
    Mr. Burgess. Thank you, Mr. Chairman. As a consequence of 
my excellent staff, they were able to dig up the excellent 
article that I referenced from Health Affairs from 15 years 
ago.
    [Laughter.]
    Mr. Burgess. And I ask unanimous consent to put that in the 
record.
    Mr. Bucshon. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Bucshon. I now yield to the gentleman from Florida for 
his 5 minutes for questioning, Mr. Bilirakis.
    Mr. Bilirakis. Thank you. Thank you, Doctor. I appreciate 
it, and I want to thank the panel for their testimony.
    Dr. Ippolito, as you know, Community Health Centers are 
required under law to have a sliding fee schedule for low-
income patients based on their needs. One way they do this is 
by passing through the 340B rebates to their patients to lower 
their prescription drug costs. This allows health centers to 
meet the unique needs of their communities, and they do an 
outstanding job.
    However, when they utilize contract pharmacies, we have 
seen instances where these pharmacies will take these rebates 
and not pass them on to patients. Do you think that is fair?
    Dr. Ippolito. Well, I mean, I--it certainly seems to 
undermine the goals of that program. And I think it speaks to 
this broader question about the 340B program, which is, as it 
increases in size, are we comfortable with how the program is 
actually targeted? Are the right sort of institutions 
benefiting?
    We heard earlier about--a question about, well, which 
hospitals are benefiting? Is it community access hospitals? Is 
it safety-net hospitals? Is it the Johns Hopkins and the elite 
academic medical centers of the world? I think this is a 
question that is along those same lines.
    Mr. Bilirakis. Thank you. Should we be concerned by the 
consolidation incentives you mentioned in your testimony, your 
written testimony, that also allows for single entities to take 
340B rebates that should instead be legally passed on to the 
patient?
    How do we incorporate a policy that ensures consistent 
compliance and accountability in the program?
    And that is the bottom line. So if you could comment on 
that, I would appreciate it.
    Dr. Ippolito. Yes. I think, if you think about 340B, the 
two big questions are is it targeted well, and is it 
functioning just literally the way we think it is supposed to 
be functioning? Are the discounts going where they are on paper 
supposed to be going? Are there duplicate discounts between the 
Medicaid program and the 340B program?
    When you talk about--you mentioned consolidation--I heard 
at the beginning of that. You know, one of the ramifications of 
this whole program is that it gives this enormous arbitrage 
opportunity to hospitals that have 340B status, that suddenly 
they have a big opportunity to propose to a physician that 
practices independently: ``If you come affiliate with us, we 
have an enormous advantage on our acquisition costs for these 
medications, and we can basically share that with you.'' And so 
it is another contributor to this phenomenon of greater 
consolidation over time, and it goes back to that question 
about targeting.
    Mr. Bilirakis. OK. Again, Dr. Ippolito, can you discuss if 
the way that Medicare reimburses for physician-administered 
drugs has contributed to the consolidation trend of hospitals 
purchasing local physician practice offices?
    And how do we fix this problem without further squeezing 
small independent providers?
    Dr. Ippolito. Well, yes. A Medicare payment policy is like 
a double whammy on top of a 340B. So 340B gives the hospital a 
big advantage on the acquisition cost, and then Medicare pays 
the hospital-affiliated facility more than it would an 
independent physician to administer that drug. And there 
certainly have been proposals to address that. I know H.R. 19, 
I believe, incorporated some site-neutral payments, even just 
for administration of drugs.
    But that is part of this broader effort that places like 
MedPAC have highlighted. There are certain services that seem 
like they are basically the exact same service, and they don't 
really need access to the hospital. And so we ought to start 
thinking about whether we should reimburse those things in a 
way that is both saving Medicare money, but it doesn't 
disadvantage these independent physician practices quite as 
much.
    Mr. Bilirakis. Thank you very much.
    Finally, I am interested in implementation of the price 
transparency rules--and I know that my good friend Mrs. Dingell 
here on this.
    Mr. Severn and Ms. Bartlett, how can HHS not only boost 
hospital compliance but ensure that compliant hospitals have 
prices that make sense and are easy to understand for the 
consumer--that is the bottom line for it to work--so that 
patients and websites can access more prices and more--
meaningfully shop for the best care, please?
    We will go ahead and start with Mr. Severn. I don't have a 
lot of time, though.
    Mr. Severn. Thanks for the question. The first--and I have 
said this a few times--there is a standard that is suggested. 
And the moment that standard is enforced and there is an 
enforcement date, it makes it easier for all of us to see what 
is in these files. It shouldn't be just Turquoise, a company 
with the resources, that can go through and process all this 
data. It should be easier to access this. And so the first step 
to making compliance and enforcement easier is having a 
standard to look through these 6,000 files.
    Mr. Bilirakis. Thank you.
    Ms. Bartlett?
    Mr. Bartlett. I would agree. I think having a standard, a 
template, as--would be the first big step to get those prices 
out, and standard descriptions and everything. But some 
standards would be great.
    Mr. Bilirakis. Thank you.
    I don't--I ran out of time, so I will yield back. Thank 
you, I appreciate it.
    Mr. Bucshon. The gentleman yields back. I now recognize the 
gentlelady from Washington, Dr. Schrier.
    Ms. Schrier. Thank you, Mr. Chairman. Thank you to all the 
witnesses for being here today, and a big, special thank you to 
Mr. Forge for coming out from Spokane, from Pullman. Thank you 
for the work that you have done for rural patients.
    You have all pointed out how transparency is critical in 
bringing down costs and for patients to know what they are 
paying for.
    Dr. Ippolito, I was intrigued by the discussion in your 
testimony--and many people have commented on it now--about 
different Medicare reimbursement rates, depending on whether--
what procedures take place in a hospital, a hospital-affiliated 
center, or a freestanding clinic, or an ambulatory center that 
is not associated. And, of course, this sets up all kinds of 
wrong incentives.
    And this is not pointing at the people doing the wrong 
thing for the wrong reason, it is just that when you have, say, 
an orthopedic surgeon who has to do a knee replacement, there 
may be pressure from all kinds of directions for that doctor to 
do a knee replacement in a hospital rather than an outpatient 
surgical center, even though for a low-risk patient doing that 
is the safer and better thing to do and even though, you know, 
in a hospital--a hospital is a very expensive place to stay for 
a night, when you can just as well go home and do your rehab 
and PT at home.
    So, you know, I was just going to ask you to expand a 
little bit on all of this, what we should do about it, whether 
you are finding that hospitals are buying up ambulatory 
surgical centers to kind of run around this issue, and how you 
suggest fixing it.
    Dr. Ippolito. Well, sure. I mean, the short answer to your 
last question there is ``yes.'' There has certainly been a lot 
of consolidation of facilities that otherwise would have not 
been affiliated with a hospital into the hospital sphere, if 
you will.
    I will just emphasize one thing that hasn't really come up 
is that, especially in the Medicare market, the site of service 
doesn't just affect, like, aggregate Medicare spend or 
something like that, which obviously matters for taxpayers and 
budgets and all those things, which are very real. But it 
matters for the person who is getting the care, because your 
out-of-pocket can be a 20 percent coinsurance. Well, if the 
bill is larger, 20 percent of a larger bill is a larger bill, 
you know.
    Ms. Schrier. That is right.
    Dr. Ippolito. And so I think we don't want to lose sight of 
that. It is one of the examples where consolidation issues 
sometimes sound abstract. They affect the medium and the long 
run. That is an example where, yes, you can affect the 
consolidation incentives in a meaningful way, like you point 
to, but in the short run it materially affects out-of-pocket 
spending for people. So it is one of the avenues through which 
we can really make a big difference in the relatively short 
term.
    Ms. Schrier. And I think you brought up a really 
important--there about whether people feel that if you are 
paying 20 percent of the bill, then you actually feel--and you 
can have some power in making those decisions.
    Mr. Severn, you were talking about MRIs costing vastly 
different amounts at different locations. And I was going to 
say that, with many insurance companies--for example, with 
mine--there is a copay. And so I don't feel it if there is a 
higher price or a lower price for the MRI, and the insurance 
company negotiates whatever price they want that has nothing to 
do with the list price.
    I was wondering if you could talk a little bit about 
transparency there, but also how to give people more agency so 
that, when there is a higher or a lower price out there, it 
serves us to go for the place with the lower price. Give us 
some, like, good skin in the game, if I am explaining that----
    Mr. Severn. Thanks for the question. So there's a couple 
ways to summit Transparency Mountain.
    You mentioned one of them, which is just copay-based plans. 
And there's a lot of startups innovating to say, hey, no matter 
where you go, here is the copay.
    You know, giving patients the skin in the game, there's a 
couple of different mechanisms. High-deductible plans is one. 
Having a percent, coinsurance, is one. And it is back to the 
issue of, hey, 20 percent of a bigger number is more money, 
right? And so the problem with saying patients need skin in the 
game but without giving them a variable that is necessary to 
calculate that skin in the game is what was so ludicrous before 
2021.
    Now we have this key negotiated rate variable, where if you 
have a high deductible plan or a percent coinsurance, you can 
do the math as a patient. But I think what I am advocating for 
is they shouldn't have to do the math. You know, companies like 
Turquoise should make it as simple as possible, like you are 
buying a toaster off Amazon, to say you will pay $50 if you go 
here.
    Hopefully, that answers your question.
    Ms. Schrier. Thank you. Yes, I appreciate it. And I know 
how much people are suffering from high prices.
    I just wanted to lastly touch on PBMs. I use insulin. I 
have seen the price of insulin go up from about $40 a bottle to 
north of 300 now. We have talked about that before and the role 
of PBMs in those pricing changes. And just want to say to my 
colleagues I am happy and ready to work on combating some of 
these perverse incentives for pharmacy benefit managers, where 
they get compensated more for a higher negotiated medication 
price.
    So thank you. I yield back.
    Mr. Bucshon. The gentlelady yields back. I now yield to the 
gentleman from Ohio, Mr. Johnson, for his 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman, and thank you to our 
witnesses for being here today.
    I think this is a crucial time for discussion on price 
transparency, and I thank the chairman for having this hearing. 
It comes as Congress is in the middle of debt limit discussions 
with the President, and healthcare costs are a really big part 
of what is driving the national deficit. The Medicare Trust 
Fund will be insolvent in less than 5 years, and our national 
debt is over $31 trillion, a major reason why healthcare costs 
are simply too high.
    Runaway healthcare prices are bankrupting the country, 
often putting everyday Americans, our constituents, in 
financial distress. They are having to choose between paying 
for healthcare or paying for groceries, energy, and other 
necessities. Oftentimes, they go without the healthcare that 
they need because they can't afford to go to the doctor, and 
they can't afford the insurance premiums that would get them 
there.
    Healthcare costs now make up nearly 20 percent of GDP. This 
is not sustainable. At a time when inflation is crushing 
families, it is our responsibility to scrutinize the 
contributors to these skyrocketing costs and either call for 
regulatory changes or make statutory changes when appropriate.
    So my first question, Dr. Ippolito, how can increased 
healthcare price transparency and competition tamp down these 
costs and start to give families a little more wiggle room?
    Will this help change the trajectory for healthcare costs?
    Dr. Ippolito. Yes. Well, I mean, it is a necessity, to some 
degree. If an employer or an individual doesn't really have 
much in the way of choice, well, there is not much way for them 
to put any downward pressure on prices in their local market. 
And I think we have certainly heard about specific examples of 
that today.
    You know, in terms of a high-level point, you know, it is 
easy to lose sight of the direct impact that competition in 
healthcare costs have on people. We forget you don't see that 
if you have employer-based coverage, that costs $20,000 a year. 
And economic theory and evidence is extremely clear: Employees 
pay for that, every cent of it. Every time we see healthcare 
costs go up, even if just for a sliver of workers, we see the 
wages adjust for that sliver of workers.
    And so we really need to hammer home that point. This is 
not some abstract budgetary issue that affects the government 
in some sense. It is an issue that directly affects people, 
both through wages and their tax bill and so many other things.
    Mr. Johnson. OK. Better price transparency throughout the 
healthcare system will result in greater competition, lower 
costs, and create a better level of trust between patients, 
insurers, and providers. Congress has given the Biden 
administration the tools necessary to ensure compliance of the 
hospital price transparency regulations already on the books.
    So my next question, Ms. Tripoli: In your opinion, what 
could be done by CMS or the executive branch to better ensure 
compliance with the hospital price transparency regulations?
    Ms. Tripoli. I think, at the end of the day, this is about 
hospitals failing to comply. They have the requirements. We 
have been--it is a Federal rule. We have been in implementation 
for 2 years. At this point we would expect to see much higher 
compliance, and not just a--the--posting some prices, complete 
data files.
    So I think, at the end of the day, this is about hospitals 
showing up and doing their part and complying with Federal 
rules.
    Mr. Johnson. OK, all right.
    Mr. Severn, you work to help patients obtain a good-faith 
estimate of what they will pay for services they need under the 
No Surprises Act, which mandated that providers furnish such 
estimates. It has been a challenge to implement this part of 
the law in cases where multiple providers or facilities are 
involved.
    Do you have recommendations for Congress or CMS to improve 
data sharing to make good-faith estimates seamless and ensure 
patients have access to accurate cost information?
    Mr. Severn. Thank you for the question. So to answer that 
question, I will give a couple of stats.
    You know, we say there are 5,300 hospitals, it looks like 
as of today, that have prices posted; 4,600 over that have 
negotiated rates, 4,500 have cash prices. I think these numbers 
are important, because those stats are pretty high, and we are 
in this data every quarter. And so maybe a lot of things that 
you saw last year and the year before show you that there 
aren't as many prices. There are quite a few prices out there, 
what we call coverage in the market.
    The next step, as you mentioned, is these prices turn into 
good-faith estimates, and these estimates need to be packaged. 
And the beautiful thing about No Surprises is that there is 
teeth to create an estimate that is accurate within $400. And 
so, to us, that is the next step. That is where this is going 
next is, great, your prices are out there. We need to get them 
to a patient before time of service, and then you need to be--
it needs to be enforced that the estimate is accurate.
    Mr. Johnson. Isn't it amazing how a free enterprise economy 
actually works to drive down costs when you tell people what 
they are going to pay for stuff?
    Mr. Chairman, I yield back.
    Mr. Bucshon. The gentleman yields back, and I recognize 
Mrs. Trahan from Massachusetts for her 5 minutes.
    Mrs. Trahan. Thank you, Mr. Chair.
    Healthcare in the United States operates on a free market 
system, where larger systems command higher rates of 
reimbursement with their market clout and smaller, often urban 
or rural systems have limited opportunity to negotiate higher 
prices. As many of my colleagues have said here today, this 
contributes to the strong getting stronger and the weak getting 
weaker, as providers with market clout can demand higher 
reimbursement from insurers.
    During COVID we saw a number of rural hospitals closed 
because of this trend. And in the district I represent, we are 
seeing the same threat to access among urban community 
hospitals. We are told that hospital mergers and consolidation 
are supposed to increase efficiencies and lower costs, but 
community hospitals have not been part of market consolidation, 
and therefore they lack negotiating power. These hospitals 
don't have strong operating margins to begin with and provide 
care for some of the most underserved communities across the 
country, so they often aren't invited to join larger systems.
    Mr. Ippolito, do larger hospitals and hospital systems 
charge more than smaller community hospitals for the same 
services because they cost more at larger facilities, or is it 
simply because these large hospital systems wield more 
negotiating power and can therefore fetch higher reimbursement 
rates for the services they provide?
    Dr. Ippolito. It is to some degree both, but it is 
important to remember that the costs are endogenous. The 
hospital gets to choose how much things cost, and Partners has 
made different decisions about their underlying cost structure 
than, for example, a smaller community hospital.
    But there is no getting around the second point. They have 
more negotiating leverage, and that is absolutely correct.
    Mrs. Trahan. Thank you. In Massachusetts, outside of cities 
like Boston, we have lower-income communities that rely on 
stand-alone providers. These providers have the lowest prices 
and operate with the fewest resources. They cannot command 
prices, and many of them are limiting essential services and, 
in the worst cases, are on the brink of closing entirely.
    Ms. Tripoli, where is access to care most threatened due to 
the limited market clout of smaller community hospitals?
    Ms. Tripoli. I think, at the end of the day, what we know 
about the markets is that these large, dominant systems are 
able to buy up independent physician practices. And that is one 
of the greatest trends we are seeing right now in terms of 
vertical integration. And that has a direct impact not only on 
prices, but also access to care, and particularly primary care 
for many of the communities around our country.
    And so one of the solutions we can do right now to end one 
of those incentives for big systems buying up smaller doctors' 
offices is to expand site-neutral payments, and--which will 
also result in significant savings for the system and also for 
the beneficiary.
    Mrs. Trahan. So my followup question to that was that I am 
exploring policy solutions to address this access-to-care 
challenge that is disproportionately hurting low-income 
communities, especially in the district I represent.
    So if you could share some of the challenges facing smaller 
community hospitals and some of the ways that we can improve 
reimbursement for these kinds of hospitals, that would be 
helpful.
    Ms. Tripoli. That was directed for me?
    Mrs. Trahan. Yes.
    Ms. Tripoli. Again, I think one of the things we can do 
right off the bat, which is what is under discussion for this 
committee here today, is expanding site-neutral payments, which 
eliminates this perverse incentive for big systems to buy up 
independent doctors' offices, which has a direct impact on 
making sure that we have access to critical care in 
communities.
    The other thing that I would just say is one of the other 
things we are seeing in terms of dominant market power is a lot 
of anticompetitive practices, including restricting providers 
from being able to go to competing systems, which has also a 
direct impact on access to care in communities. So I think 
taking a closer look at the different types of anticompetitive 
practices that are occurring between plans and providers, and 
prohibiting some of those practices that we know that lead to 
burnout, reduced access to care, drive up prices, and result in 
poorer quality care.
    Mrs. Trahan. Great. Thanks so much.
    I yield back.
    Mr. Guthrie. The gentlelady yields back. The Chair now 
recognizes Mr. Carter from Georgia for 5 minutes for the 
purpose of asking questions.
    Mr. Carter. Thank you, Mr. Chairman, and thank all of you 
for being here. I appreciate it very much.
    This is my ninth year in Congress, and I have to tell you--
I am just beginning my ninth year and, you know, when I first 
got here 8 years ago, the first thing I did was to go to the 
FTC and ask them to look at the vertical integration that 
exists with the insurance company owning the PBM, owning the 
pharmacy.
    To me, it is a direct conflict of interest. All this could 
be resolved by just saying the insurance company can't own the 
PBM, and saying the PBM can't own the pharmacy. If we did away 
with that, we wouldn't have any problem. We would have what all 
of you have been calling for today, and that is competition, 
and that is what we need.
    Obviously, transparency is a big part of it. I am not going 
to repeat everything that you have heard here. You know that 3 
PBMs control 80 percent of the market--75, 80 percent of the 
market. That in itself is a big problem. When you have the 
insurance company that owns the PBM, you have steering going on 
because they are trying to get them to their pharmacy. All of 
that you understand.
    I want to ask you, Ms. Bartlett, because I was intrigued. I 
haven't, unfortunately, been able to sit here the whole time to 
listen. But what was done in Montana with our good friend and 
former colleague, with--or who is now the Governor--I guess it 
may have been done before then, but nevertheless, thank you for 
what you did. But you mentioned that you all had changed PBMs, 
I think, at one point.
    Did you know if the PBM before--were they engaging in 
spread pricing?
    And all of you know what spread pricing is, I am assuming, 
and I am sure you do. So----
    Mr. Bartlett. Yes, thank you for the question. The PBM we 
had previously was engaged in spread pricing.
    They also had contracted with CVS to be the rebate 
aggregator who would bring all the rebates in. And we were 
given $20 per drug rebate. And from my previous experience, I 
knew that that was way, way, way too low.
    Mr. Carter. Right.
    Mr. Bartlett. And then they also had contracted with a 
specialty pharmacy that was owned by an insurance company. And 
so----
    Mr. Carter. Go figure.
    Mr. Bartlett. Oh, yes. Going through that contract, you 
were able to see all the places that needed to be cleaned up. 
And so I terminated all those contracts and went for a 
transparent passthrough.
    Mr. Carter. You know, I mentioned earlier about the FTC. 
And finally, last summer, they are undertaking a study now, a 
6B study looking at the impact that PBMs are having on 
independent retail pharmacies. Four percent of all independent 
retail pharmacies are going out of business every year, 
primarily because of the low reimbursement by the PBMs.
    And of course, you know, it is such a problem, particularly 
when you think about the fact that the independent pharmacies 
adjudicate their claims through the insurance company. 
Therefore, the insurance company that owns the PBM that owns 
the pharmacy has all that information right there.
    We had a case in middle Georgia just here in the last year 
where they were cut off by one of the PBMs and all of their 
patients were transferred to the mail order pharmacy that was 
owned by the PBM. That is--I mean, it is so obvious to me, and 
thank goodness my colleagues are getting it now and 
understanding what is going on. And thank goodness the FTC is 
undertaking this study.
    I know you find it hard to believe--we get updates from 
them as to how the study is going, and they are having trouble 
getting the PBMs to cooperate. I can't imagine. But 
nevertheless, that is happening.
    I want to mention--and I know it is self-serving, but I do 
have legislation, and it is bipartisan legislation. It is 
called the Drug Price Transparency in Medicaid Act of 2023. And 
it is to improve transparency and eliminate the use of spread 
pricing. You all know what is going on right now--it made news 
yesterday with the attorney general of Ohio and what he is 
doing--that is the kind of thing we need. That is the kind of 
action that needs to be taken.
    Dr. Ippolito--I am sorry, I know you have been before us 
and before the Doctors Caucus, and thank you for your expertise 
in this field as well. But what about--you know, the thing that 
concerns me is employers don't get it, either. They don't 
understand. They don't know. What can we do to help employers 
understand and see just how rogue this is?
    Dr. Ippolito. Well, I mean, I think what--you referenced 
your bill, and I think CBO will tell you--I am sure they have--
that if you give the employers better information, their 
expectation is that they are going to change their behavior if 
they better understand, really, what the rebate levels are, 
what the gross spend and what the net spend really is.
    Mr. Carter. Right.
    Dr. Ippolito. The only thing I will add--it has come up a 
couple times--you have got to make sure that those things 
actually incorporate more than just the PBM, but it has to 
include the rebate aggregator, the one level higher than the 
PBM, just to make sure that you get the full picture.
    But I think their expectation is my expectation. If you 
know more, you are going to make a better decision and you are 
going to be--it is going to make it easier to compare the PBMs 
against each other if these fees and the costs are much 
clearer.
    Mr. Carter. You know, I will tell my age here, but I can 
remember practicing pharmacy and--when PBMs were nothing more 
than processors. That is all they did, was process claims. And 
then they evolved into this now that is causing--you know, all 
of us in Congress, and Democrats and Republicans alike, we want 
accessibility, affordability, and quality in healthcare. That 
is what we want.
    Well, right now, pharmacists are the most accessible 
healthcare professionals in America. Ninety-five percent of all 
Americans live within 5 miles of a pharmacy. If you start doing 
away with independent retail pharmacies, that is going to end. 
Therefore, it will impact accessibility to healthcare in 
America.
    I am sorry, Mr. Chairman, I know I am over, and I will 
yield back. Thank you.
    Mr. Guthrie. The gentleman's time has expired, and he 
yields back. We will complete the members of the committee, and 
then go to people who are waiving on to the committee. So next 
would be Dr. Dunn from Florida.
    You are recognized for 5 minutes.
    Mr. Dunn. Thank you very much, Mr. Chairman.
    You know, policies to promote transparency in healthcare 
pricing are a sure way to address the pressing issue of high 
healthcare costs. Empowering consumers with knowledge about the 
true cost of healthcare services and products will put more 
Americans in the driver's seat when it comes to their family's 
health and spending.
    President Trump executed a number of transparency policies 
across the healthcare continuum, from drugs to insurers to 
hospitals to doctors. And this committee must ensure that this 
compliance with these new rules continues or is enacted.
    However, policies such as price caps and price setting 
actually pervert the market and limit access to consumer 
choices. That is not the path we should follow. Instead, I 
think we should be promoting the transparency that everybody 
has talked about so well tonight and thus competition to ensure 
healthcare markets operate in a way that serves the consumers.
    Mr. Severn, we have seen greater compliance amongst 
insurers rather than hospitals when it comes to their 
respective transparency rules. But the size and complexity of 
the data files has made this information difficult for 
consumers to use in a meaningful way. I appreciate what 
Turquoise has been able to accomplish in the private sector 
when it comes to distilling these complex data sets to empower 
patients.
    Will this data continue to improve the availability--the 
legibility, if you will--of the data and continue to improve 
with time, or should we consider tweaks to the regulation to 
assist with the processing of data?
    Mr. Severn. Thank you for the question. You know, I will 
leave it up to others, not myself, to decide where best to 
tweak this.
    But what I would recommend is there is a process right now 
for the insurance data to be modified through a technical back-
and-forth that occurs on GitHub, which CMS runs. And over 9 
months in the--since this data has come out, every month it has 
gotten more accessible, easier to work with. More companies and 
more third parties are making use of it, distributing it to 
patients and downstream.
    So I would recommend continued tweaks, at least through the 
GitHub process with CMS, and then I will leave it to regulators 
to decide if more needs to happen in the text.
    Mr. Dunn. How about enforcement?
    Mr. Severn. Enforcement on the payer side is, you know, a 
little harder to address. I might not fully speak over that, 
because it kind of filters out to States and----
    Mr. Dunn. OK, we haven't been doing it, for the most part. 
I think there's a couple of isolated instances, but we haven't 
been doing it.
    Mr. Forge, the theme of this hearing is competition. It 
seems that you have, in fact, created competitive value for 
your patients in--by complying with the Hospital Price 
Transparency Rules as a community-based critical access 
hospital. How does price transparency enhance your ability to 
compete with larger competitors?
    Mr. Forge. Well, I think we have kind of addressed it a 
little bit earlier. I think the--what it focuses on for us, 
what we can really compete at is with quality. You know, when 
you are talking about competing on price, you know, volumes 
really takes the ticket right now. And so we are kind of, you 
know, where we are.
    But if we can continue to provide a better product, and we 
can prove it, and a better service, maybe our volumes will 
continue to grow, we will gain more leverage. The cost has got 
to be a part of that equation.
    Mr. Dunn. So I would say--I am a doctor in my real life. I 
would say that I have seen, you know, large hospital systems 
that simply did not compete on cost. They didn't use the 
benefit of their size to get low cost for themselves, which 
they would then--they didn't pass on to the consumer. So I 
think you have some potential to compete on cost, as well.
    Dr. Ippolito, we have seen PBMs become vertically 
integrated with large health companies and pharmacies. I 
completely associate myself with the remarks of my colleague 
Mr. Carter. You have previously written, however, that the 
effects of that integration is somewhat unclear. I am fairly 
confident that such integration drives higher costs for 
consumers.
    Do you have recommendations for transparency-oriented 
policies Congress could enact that would shed some light on the 
effects of that vertical integration?
    Dr. Ippolito. Yes. So I will maybe clarify my prior 
writing.
    The effects of vertical integration, as a general 
proposition, are a little bit less certain, just because 
conceptually there can be things like better adherence or 
better communication between various levels of the organization 
that could provide value.
    That said, if you want to think about high level, what is 
important, you know, what do these contracts look like? Where 
are the incentives, right? Are there incentives to steer 
patients or steer volume to things that deliver, you know, 
revenues for you? If there is a choice between, for example, a 
pharmacy-dispensed product and a physician-administered one and 
you run a pharmacy, do you tend to steer people to the 
pharmacy?
    Those are the kinds of questions I would be asking when it 
comes to vertically integrated firms like you are talking 
about.
    Mr. Dunn. Thank--I want to thank the panel for their time 
today.
    And, Mr. Chairman, I yield back.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Mr. Latta for 5 minutes for questions.
    Mr. Latta. Well, thank you, Mr. Chair, and thanks for 
today's hearing, and also thanks for our panelists.
    I am sure the Chair has already said we have three 
different subcommittees that have been running today in the 
committee, so we appreciate your indulgence.
    Mr. Forge, if I could start my questioning, what can or 
should the Federal Government do to make price transparency 
requirements and compliance criteria clearer--this has always 
been the tougher one--and more user-friendly for hospitals 
while also being useful for the--our patients out there?
    Mr. Forge. Well, I think, you know, basically, just 
simplification. You know, how do you simplify the regulations 
so that, you know, more hospitals can comply with them, you 
know, with less resources, less, you know, less effort, less 
work? We need simplification of these things.
    The truth is we have to compete in rural America with big 
hospitals. We have to compete in that area. And so we need a 
little bit of help to make that easier for us to do so at that 
level.
    Mr. Latta. Well, you know, you bring up a question when you 
say ``simplification'' because, again, I know that when I go 
through my health facilities in the 5th district and around the 
region, you know, sometimes you look around and also we have 
had panels here before us of docs and other individuals, and 
I--you know, after a while you have to ask this question: How 
much time do you get to practice? How much time are you 
actually doing, really, the medical end of this job, instead of 
all of the paperwork?
    And I know I have been in some doctors' offices that they 
have invited me in, and as I observed things for a little 
while, I say, ``Who is actually practicing medicine here 
instead of filing forms?''
    So how do we--you know, how do we get the simplification in 
there? Because we all know it needs to be done. But how do we 
do it?
    Mr. Forge. Good question. I spend most of my days trying to 
solve that for our teams, as it is.
    I think, you know, the volume of change in regulations is a 
big part of it. You know, we are adopting--adapting to new 
concepts, to new programs, to new deals every month, every 
year. And the volume of that becomes excessive. We need to kind 
of get back to why we are here.
    An example would be simplifying the CPT codes. What do we 
have, 10,000 codes, you know, that we are working on? I know 
that is really important for value-based care, and I am all for 
that, but we have to figure out ways to make it easier for 
providers just to take care of patients and for us to get clear 
bills out to our patients.
    Mr. Latta. Well, thank you very much.
    Dr. Ippolito--I hope I pronounced that--is it 
``Eppolitto''?
    Dr. Ippolito. Ippolito, but I have heard----
    Mr. Latta. Ippolito, I am sorry. We have heard much about 
transparency in the 340B program. And while I believe in the 
importance of transparency, I want to ensure that steps we take 
do not deny the resources from the hospitals that need them.
    So do you believe we can increase transparency over the 
340B program without serious consequences for our hospitals 
that use the program?
    Dr. Ippolito. Yes, sure. When it comes to 340B, I think the 
first step is transparency on two elements. Number one, is it 
just functioning the way that we expect it to function? And 
then, number two, how are the hospitals actually using that 
money?
    And I think the answers to those questions should inform 
any potential reform efforts that people have in mind. And they 
certainly would be relevant to your question about if you have 
a hospital that is genuinely delivering a lot of, say, 
uncompensated care and they are using their funds in that 
manner, then, you know, maybe we--even if you want to reform 
340B, you want to make sure you protect that kind of 
institution. And so transparency seems like the first kind of 
step in that direction.
    Mr. Latta. Well, thank you. Let's see if--maybe I can do 
this real quickly in my last minute and 9 seconds for the 
panel: Would you each briefly opine on what you believe to be 
the most significant driver of high healthcare costs?
    And maybe in 1 minute for all five of you. What is the 
driver in high healthcare costs?
    Mr. Severn. Lack of competition and, particularly, the 
hospital spend, most likely.
    Mr. Forge. Complexity.
    Mr. Bartlett. The middlemen.
    Ms. Tripoli. Consolidation, particularly in the hospital 
sector.
    Dr. Ippolito. Yes, I would echo that: consolidation on the 
provider side.
    Mr. Latta. Well, Mr. Chairman, you know, I think if we can 
get it down in one word for an answer of what is driving the 
cost, I think we are doing pretty good.
    But I want to thank our witnesses, and, Mr. Chairman, I 
thank you for holding today's hearing, and I yield back the 
balance of my time.
    Mr. Guthrie. I thank the gentleman for yielding. Next 
will--I recognize Mr. Joyce for 5 minutes for questions.
    Mr. Joyce. Thank you for yielding, Mr. Chairman, and to the 
committee for having this hearing today on such an important 
topic.
    As this committee looks to address healthcare costs, we 
need to make sure that we are addressing misguided incentives 
that are ballooning those costs. As has been mentioned here 
today, one of the biggest drivers in increasing spending over 
the last 10 years has been the 340B drug-pricing program. The 
340B drug-pricing program was created in 1992 and aimed at 
enabling certain healthcare providers known as covered 
entities--and this is a quote--``to stretch scarce Federal 
resources to reach more eligible patients or provide more 
comprehensive services.''
    Between 2000 and 2020, the number of covered sites 
participating in the program grew from 8,100 to over 50,000. 
During this period, discounted purchases in the program grew 
from $4 billion to 38 billion from 2007 to 2020.
    Mr. Chairman, I would like to ask unanimous consent to 
enter into the record an article from December in the Wall 
Street Journal to join the one entered by my friend and 
colleague Dr. Bucshon earlier today.
    Mr. Guthrie. Any objection?
    Seeing none, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Joyce. Thank you. Both of these detail a myriad of 
issues in a program which highlight the need for changes to be 
made.
    I want to also be clear that we must ensure that any reform 
in this space cannot come at the expense of patient access to 
medications.
    Dr. Ippolito, can you explain in detail how the 340B 
program is contributing to the overall trend of increased costs 
for patients that we are seeing in the healthcare marketplace 
right now?
    Dr. Ippolito. Well, in terms of the patient effect, I think 
there's probably two things that would come to mind. The first 
is that, in theory, the money is supposed to be used to help 
fund care for patients, typically, that cannot afford to pay. 
So one of the big questions is, is that actually how the money 
is being used? And if it is not, that is something that is 
worth addressing.
    And then I think the second point that I would emphasize is 
that this is another one of these policies that tends towards 
the direction of more consolidation, because it gives certain 
entities, hospitals, a big arbitrage opportunity over stand-
alone physician practices. And so it pushes in the direction of 
more consolidation. That pushes in the direction of higher 
costs for patients.
    Mr. Joyce. So you brought up a very interesting point. So 
you addressed is this being utilized for the patients who need 
that care? Do you think it is? And do you think that that 
explains the $4 billion increase to $38 billion over 13 years, 
or is this being abused?
    Dr. Ippolito. I think the perhaps most sort of damning 
answer is that I have no idea. I have no idea how the money is 
used, because I don't think there really is any effective 
oversight. I think it operates through HRSA, and I don't even 
know that there are standards for how the money is supposed to 
be spent, let alone how the oversight is supposed to work.
    So that seems like an area that, for program integrity and 
just making sure it is doing what people want it to do, that 
seems like an area where transparency would be particularly 
useful.
    Mr. Joyce. So I addressed the district where I serve, 
Pennsylvania's 13th congressional district, which is rural and 
underserved, and I see great benefits from 340B programs for 
several of the rural hospitals. But I share your concerns if 
this process is being overutilized and abused.
    Mr. Forge, to follow up on my colleague Dr. Bucshon's 
questions on reporting HRSA, do you think if Congress were to 
ask to compare current metrics on charity care with the total 
amount of savings that Pullman gets in a year from 340B or--
from 340B programs, that the need for the program would 
outstrip any savings that the hospital will get?
    Mr. Forge. I am not sure that I can speak to that. But what 
I do know is that, in rural areas, hospitals that should 
benefit from 340B, in my experience, have had a tough time 
doing so. I think they are getting to the point where they are 
figuring it out, and we are starting to feel the benefits. But 
I don't think that all the places that should be feeling the 
benefits from 340B are feeling that.
    Mr. Joyce. Do you feel that there might be better metrics 
that we in Congress should use to fully grasp the value to 
patients that hospitals can provide with these programs, with 
these savings?
    Mr. Forge. Sure. I think maintaining viability and 
sustainability of these, you know, hospitals, these community-
based hospitals in rural areas is the priority. So how do we, 
you know, look at 340B in these areas as an effective measure 
to keep these hospitals going, keep 24-hour emergency care 
services going, and make sure that these people have access to 
services where they live?
    Mr. Joyce. I thank you for your concise answer, because I 
don't think there is anything that hospitals should be afraid 
of when it comes to 340B transparency. If a hospital needs that 
support, it should be obvious, and it should be transparent. 
And for--the hospital that you run and in many districts are 
exactly who this program is meant to serve, but I do wonder 
whether this same story would be clear for every hospital. And 
I look forward to working with my colleagues in a bipartisan 
way to address this issue.
    Thank you, Mr. Chair, and I yield back.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Mr. Pence from Indiana.
    Oh, I am sorry, excuse me. The gentleman recognizes Mrs. 
Harshbarger for--yes, Harshbarger for 5 minutes for the purpose 
of questions.
    Mrs. Harshbarger. Hey, thank you, Mr. Chairman, and thank 
you, witnesses, for being here today. This is informative for 
me.
    I have been a pharmacist 37 years, and PBMs are just from 
the devil. OK?
    And Ms. Bartlett, you are my kind of gal, OK? And I do want 
to ask you one question. You have already heard from Mr. Carter 
about the PBMs, but you said you used a transparent passthrough 
PBM. Can you tell me who that is?
    Mr. Bartlett. Yes, that was Navitus.
    Mrs. Harshbarger. Navitus, OK. And there are some 
transparent PBMs out there.
    Mr. Bartlett. Yes, there are.
    Mrs. Harshbarger. Integra, and----
    Mr. Bartlett. And you have to make sure it is in the 
contract.
    Mrs. Harshbarger. Yes. I will be talking to you later.
    Mr. Bartlett. OK.
    [Laughter.]
    Mrs. Harshbarger. And I want to follow up on something that 
Mr. Griffith talked about, and I want to talk about that 
ProPublica report that was published last week.
    And this is for Mr. Severn. You know, I am also concerned 
about the pricing, what they charge: a blood test, $1,000. And 
I have looked at these, because people bring them in to me. 
Remember, we are the most trusted healthcare professional. 
Everybody lives 5 minutes from a pharmacy. And by gosh, they 
utilize us. All right? I guess--are all laboratories that are 
not hospital-based required to post their prices?
    Mr. Severn. Thanks for the question. The simple answer is 
yes. And that is what is so great. We had 18 months where we 
only had hospital prices, and now 9 months ago we are mixing 
nonhospital prices into the fray, which should create more 
competition.
    Mrs. Harshbarger. So the labs have to report that, as well?
    Mr. Severn. The----
    Mrs. Harshbarger. If they are not hospital-based?
    Mr. Severn. The insurance companies report the negotiated 
rates with labs on their behalf.
    Mrs. Harshbarger. OK. Are they doing that?
    Mr. Severn. Yes, we----
    Mrs. Harshbarger. OK.
    Mr. Severn. Billions of rates now just live on the 
Internet.
    Mrs. Harshbarger. You know, we had the biggest--in the 
history of the country in my district, so there is no 
competition. We all know competition makes everything better, 
and it drives prices down. And there was a hospital--well, it 
really wasn't a hospital. They published their prices, their 
cash prices online on Facebook, compared it to the hospital, 
and people were angry, very angry. It is just getting the 
information out there.
    And I guess this is for everyone: If suddenly the curtains 
were pulled back on all healthcare prices, and consumers could 
see prices systemwide in healthcare by the insurance payer and 
the plan as well as discounted cash prices, what would happen? 
What would happen?
    And I will start with you, sir.
    Mr. Severn. I think people would get in their cars and 
start driving to Pullman or somewhere more affordable.
    [Laughter.]
    Mr. Forge. I think they would be confused.
    Mrs. Harshbarger. They would.
    Mr. Forge. I think they would be confused.
    Mrs. Harshbarger. They would be saying, ``I have been 
paying too much for a long time.''
    Mr. Forge. Yes, that is for sure.
    Mrs. Harshbarger. Yes, ma'am.
    Mr. Bartlett. And I think employers would be very glad to 
see that, to see that their plan is paying much more than the 
cash price----
    Mrs. Harshbarger. Those----
    Mr. Bartlett [continuing]. And compare it to their claims 
data and see that there is probably some medical spread pricing 
going on too.
    Mrs. Harshbarger. Totally. Self-funded, they have no idea. 
They have no idea.
    Mr. Bartlett. You are right.
    Mrs. Harshbarger. Yes, ma'am.
    Ms. Tripoli. When we get to full transparency, I think it 
would give policymakers the tools to be able to intervene where 
prices have become completely irrational, so we can actually 
bring down the cost of care for the American people.
    Mrs. Harshbarger. Yes.
    Dr. Ippolito. Yes, like the last two, employers and 
policymakers might be the biggest users of that in the end.
    Mrs. Harshbarger. Yes, where----
    Dr. Ippolito. Where are the prices high, where are they 
low, and why?
    Mrs. Harshbarger. We compare prices at Walmart versus 
Amazon, don't we? Well, why can't we do that with healthcare? 
We can. They call me for a price on a medication at the 
pharmacy, and I better be lower.
    Though I could talk--I could ask you a whole lot of other 
questions, but I do have one for you, Dr. Ippolito, and it is 
about certificate of need. If you are talking about 
competition, you don't have competition in that arena, do you?
    That is one glaring area where healthcare system lacks 
competition. And I hear about it from my constituents all the 
time. And these certificate-of-need regulations require 
hospitals and healthcare providers to obtain government 
approval before they can build new facilities, expand existing 
facilities, or purchase certain types of equipments, even beds.
    Making matters worse, the laws allow existing providers to 
prevent competition by giving them the ability to object to new 
certificate-of-need application submitted by their would-be 
competitors. And many view these certificate-of-need laws as 
being the epitome of government interference, suppressing 
competition.
    Do you agree that, as a whole, those certificate-of-need 
laws are misguided?
    Dr. Ippolito. Yes. Well, I think at this point we have 
about 30, 40 years of evidence, and that evidence isn't 
particularly kind to certificate of need, however well-
intentioned they were. At this point, I think we need as few 
impediments to competition as possible in the healthcare 
market.
    Mrs. Harshbarger. Yes, I guess that is--my time is up. I 
will submit some more questions to you in writing, though. OK?
    All right. With that, Mr. Chairman, I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back, and the 
Chair now recognizes Ms. Kuster for 5 minutes for questions.
    Ms. Kuster. Thank you, Mr. Chairman, and thank you to our 
witnesses for being with us today.
    As my colleagues on both sides of the aisle have stated, 
healthcare costs are unaffordable for literally millions of 
Americans. On top of high costs, patients are also navigating a 
confusing landscape where they can't realistically plan for how 
much lifesaving treatment will cost them or if they will be 
able to afford it. This uncertainty often leads to decisions 
that only further harm a patient's health and burden the 
medical system, such as delaying care and rationing medication.
    Patients rely on supports like the 340B program, which 
provides discounts on essential prescription drugs to 
vulnerable communities. Without programs like 340B, healthcare 
would simply be out of reach for too many. We can and must do 
better by our constituents.
    One tool at our disposal are the efforts by this 
administration to increase transparency by enforcing existing 
compliance law that require hospitals and health plans to make 
the costs of services public, as we have been discussing today.
    Another tool is increasing transparency about how hospital 
bills patients depending on where the care is provided. I am 
working to introduce bipartisan legislation to give patients 
the peace of mind that they will pay the same amount for care, 
regardless of where the care is provided.
    Ms. Tripoli, Families USA has supported these site-neutral 
payment policies because they will save consumers money. How 
would changing hospital billing for clinically appropriate 
services help lower costs for patients?
    Ms. Tripoli. Absolutely. It is really about just reducing--
eliminating an incentive in the payment, the way we reimburse 
for care, that drives towards higher-cost outpatient care and 
allows hospitals, when they acquire physician practices, to 
rebrand them as outpatient facilities, they then tack on a 
facility fee, which consumers are paying directly, thousands of 
dollars.
    I think we have seen from a variety of different 
projections, from MedPAC to CBO to the Committee for 
Responsible Budget, significant savings, not just for the 
system--estimates up to $153 billion over the next decade--also 
would include lowering premiums and cost sharing for Medicare 
beneficiaries by $94 billion. And for those in the commercial 
market up to $466 billion.
    It is a no-brainer in terms of cost savings for the 
American people.
    Ms. Kuster. Thank you so much. Site-neutral policies are 
also a tool to help strengthen the Medicare program overall.
    Mr. Ippolito, your recent report, ``Procompetitive Health 
Care Reform Options for a Divided Congress,'' highlighted that 
site-neutral payments could reduce Medicare spending. How could 
expanding this policy save the Federal Government and taxpayers 
money?
    Dr. Ippolito. Well, I mean, the savings to taxpayers are 
clear. Right now, Medicare pays substantially more for care if 
it is delivered in one of these settings that was just 
discussed, the ones that are owned by hospitals, as opposed to 
a physician-owned facility.
    And so I still want to emphasize, though, there's two 
pieces of this. There are direct savings to Medicare. There's 
direct savings to the government, the taxpayer. Those are very, 
very important. But there are also direct savings to 
beneficiaries in the form of out-of-pocket spending. 
Coinsurance can be a percentage of the price. So if the price, 
the underlying price, is higher, the coinsurance is going to be 
higher.
    And so that is an important thing to keep in mind here, and 
that is a near-term benefit of these policies.
    Ms. Kuster. Well, thank you. Another aspect of lowering 
costs for patients is ensuring they can choose less expensive 
generic drugs.
    I am reintroducing my bipartisan bill, Increasing 
Transparency in Generic Drug Applications Act of 2022. This 
legislation would make it easier for lower-cost generic drugs 
to come to market, making lifesaving prescription drugs more 
affordable for patients across the country. By increasing 
transparency in the FDA's approval process, manufacturers will 
be able to bring more generic drug options to pharmacies 
faster.
    We must continue to support a competitive drug market that 
encourages high-quality, lower-cost drug manufacturing. With 
that, I look forward to working with my Energy and Commerce 
colleagues on these important policies that can increase 
transparency and lower costs for patients and taxpayers.
    And I yield back.
    Mr. Guthrie. The gentlelady yields back. We are trying to 
figure out who is next in line.
    And next is Mr. Obernolte.
    Mr. Obernolte, you are recognized for 5 minutes for 
questions.
    Mr. Obernolte. Thank you very much, Mr. Chairman. Thank you 
to our witnesses.
    Mr. Severn, I would like to start with you. You know, we 
have been having this robust discussion that is--we are talking 
about price transparency. But really, the consequence of our 
inability to have price transparency is that we don't have 
functional, free markets for healthcare in the United States. 
And we have seen the consequence of that not only in a lower 
standard of care here but in much, much higher pricing, which I 
think we are all kind of incentivized here, both there and here 
on the dais, to try and fix.
    Mr. Severn, I admire the work that you have been doing 
trying to enhance the visibility of price data. But, I mean, if 
we don't have a functional healthcare market where consumers 
are making decisions about where to go for their healthcare 
based on that data, then the data doesn't do us any good, 
because we need those consumers to be using the data to make 
decisions. And when we have got a market where most if not all 
the costs are borne by health insurance companies, then it is 
not the consumers making the choices.
    So I know you have been talking about--I think your exact 
words were ``getting more skin in the game from consumers,'' 
and I wanted to tunnel down on that a little bit. So you talked 
about high-deductible health plans, copays. What do you think 
is the optimal strategy?
    I mean, realistically, given where we are with the Federal 
Government's regulation of healthcare markets, what are the 
realistic next steps to getting us to--more towards a 
functional healthcare market?
    Mr. Severn. Thank you for the question. I think we are 
starting to see a ripple effect, where this data is making its 
way, you know, to smaller and smaller organizations and 
ultimately the consumer, you know, employers, care navigators, 
nurse care navigation companies, and then now we are starting 
to see many more tech companies like Turquoise pop up and put 
this data right in front of the consumer.
    You know, our stats is that we have got--this time a year 
ago we had 12,000 people a month on our site, and now we have 
50,000. So as you start to see more data filter in and more 
companies pop up, you see better consumer experiences.
    And there is one piece of the transparency in coverage law 
that we haven't seen many payers use yet, which is issuing 
rebates back and writing off those rebates against the MLR. I 
think we are just going to keep seeing innovation, and we are 
only 9 months into this data being public.
    Mr. Obernolte. OK. Mr. Ippolito, kind of a similar line of 
questioning for you, and I am particularly interested, because 
I know you have done a lot of thinking about this. The other 
countries have done this a lot more thoroughly and with a lot 
more innovation than we have. We spend three times as much per 
capita as countries like Singapore, who have allowed consumers 
to take a much more active role in their choices about 
healthcare.
    So what would you think about doing what Singapore has 
done, in pairing high-deductible health insurance plans with, 
essentially, a coinsurance program where the government sets 
aside 100 percent of the amount for the maximum deductible for 
a year, and gives it to the consumer in a health savings 
account and says, ``Look, this is your money,'' you know, 
``This will meet 100 percent of your deductible, spend it on 
what you want to spend it on. But by the way, it rolls over if 
you don't use it at the end of the year. And if you don't use 
it after 5 years, it rolls over into a retirement account. So 
it is yours. It has got your name on it.''
    Would that kind of a system work here, do you think?
    Dr. Ippolito. Yes, it is sort of like a prefunded HSA, kind 
of, it sounds like.
    I think--whenever I think of those kinds of systems, I 
think there is a lot of promise. And I think one of the most 
important parameters that I focus on is it is not just that you 
have liability, it is that you have liability that you 
understand. And so, if you were to ask me to prioritize things, 
I would say making sure that people actually understand the 
incentives they face, not just that they know they are going to 
get a percentage of the bill, but making it clear.
    So that means using things like reference pricing, using 
things like networks, which are very salient to people, using 
things like copayments, which are very salient to people. Those 
kinds of things, it is not just that you have the incentive, it 
is that the incentive is very clear to you. And then I think 
that kind of arrangement has a little bit more potential, and 
we are likely to see the benefits.
    Mr. Obernolte. Sure. Well, I mean--and I understand that we 
are talking about transparency and consumer pricing for 
healthcare here. And the panel--and I know everyone is pivoting 
back to that.
    But, I mean, you said something, Dr. Ippolito, in your 
testimony that resonated so much I wrote it down. You said, 
``ample evidence that--there is ample evidence that healthcare 
spending in the United States reflects economic frictions 
rather than consumer choice.'' And my point is consumer choice 
doesn't matter when it is not consumers making the choices.
    So when you hand them an account and you say, ``look, this 
is your money, here is a card, you can access it, do with it 
what you want, you are in charge of your healthcare,'' the 
health insurance system is there to backstop you if you have 
costs that are greater than what this account can make, can 
bear, but this is your money. I mean, if you look at economic 
studies, it is very clear that kind of consumer buy-in is what 
is going to be required to make our healthcare markets in the 
United States function again.
    And let me also point out in my remaining 14 seconds that 
Singapore, in addition to spending about a third what the U.S. 
does per capita for healthcare, has the highest quality 
healthcare in the world by any objective measurement. So there 
is a lot of room for improvement for us.
    But thank you very much for your testimony today.
    I yield back, Mr. Chairman.
    Mr. Guthrie. The gentleman yields back, and the Chair 
recognizes Mr. Pence for 5 minutes.
    Mr. Pence. Thank you, Mr. Chairman, and thank the witnesses 
for being here today.
    Hoosiers and, as my congressman--as Congressman Crenshaw is 
very aware--and all Americans are facing higher medical costs 
and fewer options for care, particularly in rural communities. 
Complex medical fee structures, surprise billing, and confusing 
coverage plans have further eroded patient trust in our 
healthcare system.
    Improving healthcare price transparency, however, would 
inject needed competition for healthcare facilities and 
ultimately lower costs for patients. This is especially needed 
in the Hoosier State, which consistently ranks among having 
some of the highest hospital prices in the country.
    Across southern Indiana, rural facilities are closing at an 
alarming rate, as they are all across the country, lowering 
access to care for vulnerable communities. Lack of competition 
has patients with fewer alternatives to access care, 
particularly in rural communities across Indiana's 6th 
district, my district. These issues are exasperated by 
unsustainable workforce shortages and skyrocketing labor costs.
    There have been recent efforts to improve transparency, 
such as the Trump-Pence administration's 2019 HHS rule 
requiring hospitals to disclose standard charges, as well as 
transparency-in-coverage requirements for health insurers. 
However, it is clear there is still more that needs to be done 
so that Hoosiers and all Americans can make the best medical 
decisions for themselves and their families.
    Dr. Ippolito, several years ago Congress took steps to 
harmonize Medicare payments between various sites of care for 
the same services provided through a site-neutral payment 
model. However, the services covered under the existing policy 
are relatively small--are a relatively small portion of 
outpatient services, since almost all existing facilities are 
grandfathered in by the legislation.
    Do we know what portion of facilities are grandfathered in 
under this policy, and the scope of outpatient hospital 
spending the current policy impacts?
    Dr. Ippolito. Well, you are certainly right that it is a 
very limited policy.
    I don't know the number of facilities, but I can tell you 
that it represents less than a percentage of Medicare's total 
outpatient spending. I think it is 0.8 percent of Medicare's 
outpatient spending. So it affects a very small share.
    Mr. Pence. OK, thanks. How would patients be impacted if 
the policy were to apply to a greater universe of providers and 
services?
    Dr. Ippolito. Well, Medicare and commercial market patients 
would benefit in the long run, because it reduces the incentive 
to keep consolidating the provider side in the market. In the 
immediate term, there is an obvious benefit to Medicare 
beneficiaries in the form of lower out-of-pocket spending. 
Their out-of-pocket is often a function of the price of the 
service. And if that price goes down, their out-of-pocket goes 
down.
    Mr. Pence. So it might be a good idea?
    Dr. Ippolito. Well, I think so. But, you know, nobody voted 
for me, so----
    Mr. Pence. All right, thank you.
    And Mr. Chair, I yield back.
    Mr. Guthrie. The gentleman yields back. The Chair now 
recognizes Mr. Crenshaw for 5 minutes for the purpose of asking 
questions.
    Mr. Crenshaw. Thank you to the Chair. Thank you to my 
friend from Indiana. I counted three mentions of Hoosiers.
    [Laughter.]
    Mr. Crenshaw. It is a thing. All right.
    So thank you all for being here. I appreciate your patience 
with us.
    You know, I want to start out by saying, you know, let's 
frame this problem. So everybody needs healthcare. We can 
debate whether or not it is a right, per se, but everybody 
needs it, and we all agree that it is too expensive and that 
our payment system is largely to blame. It is not operating 
like a proper marketplace.
    We have a couple of things that we want in our system. We 
want to increase quality. We want to maintain our innovative 
edge. We are one of the few countries that still maintains 
these promises of quality, but we want it to be cheaper and 
accessible. OK.
    And now, I would articulate that the only forces that 
really drive down prices while also maintaining an innovative 
edge and quality are choice, competition, transparency. And 
that is what we are here to talk about today.
    The complexity of healthcare makes transparency a really 
difficult problem. It is not like going to the grocery store. 
And so I would encourage this committee to focus on the entry 
point that everybody faces in healthcare, and that should be 
our legislative entry point, and that is primary care and what 
we can do to make primary care more accessible and easier for 
the patient, because that is your quarterback.
    That is--that should be the person you use to navigate the 
rest of the immensely complex healthcare system. You can give 
me all the spreadsheets in the world on price transparency. I 
still can't figure it out. And I am a pretty experienced 
patient, OK? It is just--it is so complex.
    And so I want to talk about primary care, and my favorite 
type of primary care, direct primary care, with you, Dr. 
Ippolito, if that is all right. A lot of the conversation today 
is about the traditional care model, where we have patients 
interacting with primary care providers, specialty care 
providers in different clinical settings, all of that. It is 
complex. It is overwhelming. Can you talk about how 
personalized care models like direct primary care can play in 
creating a wider, more competitive healthcare marketplace?
    I guess I should define what I am talking about really 
quick, which is effectively a monthly fee for a primary care 
doctor, which is all inclusive. It doesn't matter how many 
visits you have, it is independent of insurance. It is 
essentially a subscription service for healthcare. And in the 
Houston area we are talking 60 to 70 bucks a month.
    Dr. Ippolito. I mean, yes. So to echo a point I made 
earlier, given what we see in the healthcare market, we ought 
to be encouraging just about any kind of competition we can 
get. And so I think that is sort of the baseline.
    When I think about direct primary care, you know, honestly, 
it fits pretty well within what you might think of as a sort of 
optimal insurance design if you were starting from scratch. 
That is, you really focus insurance on protecting people in the 
catastrophic situations, but then you try and have competition 
under a more normal pricing structure for more regular 
services. And I think that is--at least conceptually, that is 
what a lot of direct primary care seems to be trying to get at.
    Mr. Crenshaw. Do you think it could have a positive effect 
on overall healthcare spending?
    Dr. Ippolito. You know, it is always tough with spending. I 
guess I will say two things.
    The first is that, at least as I understand these models, 
they are often a capitated approach. Capitated payments do have 
really good incentives, right? So that is a good thing.
    The second point, though, is that, when you think about 
primary care, it is often difficult to evaluate that on pure 
cost savings, because part of what you are doing is you are 
giving people access to care that they might need, right? And a 
lot of that care is really high value. Getting somebody on an 
antihypertensive or a statin is a really big ROI.
    And so I don't know that I would emphasize pure cost 
savings. Instead, what I would do is say it is--there is a 
potential to really get more efficient spending, right?
    Mr. Crenshaw. Yes.
    Dr. Ippolito. Especially----
    Mr. Crenshaw. Well, certainly because you are keeping 
people out of the emergency room, and what our goal should be, 
this continuity of care. Our goal should be every American 
knows who their primary care doctor is. That is definitely not 
the case right now. You think, like, do I call my--if you have 
a problem, do you--do I call my insurance? Do I just go to the 
ER? Nobody knows what to do. You need a quarterback.
    All right, and I got 54 seconds. So Mr. Severn, could you 
talk to us about--you get all this data, you guys have all this 
experience gathering this data. Can you talk about what we 
should do to make it more transparent and readable to the 
consumer, so we can actually translate it?
    Mr. Severn. We have talked about the hospital standard 
that, you know, is suggested right now, and I think we have 
pretty unanimously said we would love that standard to be 
enforced. And that does make these spreadsheets a little bit 
more apples-to-apples comparable.
    It also--you know, I mentioned this a bit earlier--it has 
got a column that says ``payment method.'' And there is a 
spectrum of complexity to these payment methods. And what you 
will find is not just price pressure, but you reward simpler 
payment methods. So I will go to the doctor that can say, hey, 
it is $50 up front versus some sliding fee or percent of 
charge.
    Mr. Crenshaw. OK. Thank you, and I yield back.
    Mr. Guthrie. The gentleman yields back. The Chair now 
yields to Dr. Miller-Meeks for 5 minutes for the purpose of 
asking questions.
    Mrs. Miller-Meeks. Thank you, Mr. Chair, and I thank all 
our witnesses who are here. It is a fascinating discussion. I 
could certainly ask questions for more than 5 minutes.
    As an ophthalmologist, I moved our small three 
ophthalmology practices to have a cash-based payment and a 
discount for paying cash because it was simpler for patients 
than trying to navigate through their insurance company.
    And I think it is interesting, as we talk about 
consolidation and competition and PBMs, that, you know, one of 
the biggest errors was in the establishment of Medicare, 
Medicare having different reimbursement for different States 
rather than a single reimbursement for a single procedure or a 
single visit, which would--then would have led to competition 
and medical tourism throughout the United States.
    And in 2010, when the Affordable Care Act was being 
implemented, myself and many other individuals warned that 
prices would go up, that premiums would go up with the passage 
of the Affordable Care Act. We especially were concerned about 
consolidation, hospital-to-hospital consolidation, physician 
practices becoming larger physician practices or being 
purchased by hospitals, and that--we warned at that time that 
those procedures and things being done in doctor's offices 
would then move to hospital-based clinics, and the prices would 
go up.
    And it is not just the price goes up. As Dr. Ippolito said, 
the patient's cost share is also much greater. So their out-of-
pocket cost is also greater.
    So consolidation increases healthcare prices and insurance 
premiums as well as worsens equal access for care to patients 
in rural communities and medically underserved communities. And 
why is that? Because consolidation threatens competition. It 
doesn't matter if you have price transparency if there is no 
competition. So as you drive out competition, the value of 
price transparency in certain areas decreases.
    You know, we have seen an increasing number of physician 
groups get absorbed by health systems, such as the recent 
purchase of Oak Street Health by CVS and more physicians 
working in integrated groups and more Medicare beneficiaries 
being directly affected by the high cost of integration. For 
example, the numbers of diagnostic and imaging lab tests being 
performed in a hospital has increased dramatically. We are 
pushed as physicians within a hospital to do things within the 
hospital, and this has led to Medicare incurring tens of 
millions of dollars of unnecessary costs, as was pointed out.
    And one of the things we talked about is the payment 
reform--or payment reform that we think Congress should 
consider, which is site neutrality. And what other things could 
we encourage providers to remain--other things to do to 
remain--providers to be independent, which could help with 
competition, Dr. Ippolito?
    Dr. Ippolito. I am sorry. Could you repeat the last part of 
that?
    Mrs. Miller-Meeks. What other things can we do, payment 
reforms can we do, to encourage both, you know, physicians----
    Dr. Ippolito. Sure.
    Mrs. Miller-Meeks [continuing]. To remain independent, site 
neutrality being one of those.
    Dr. Ippolito. Sure. So, you know, think about any payment 
policy that pushes in the direction of consolidation. So site-
neutral, making sure 340B doesn't push too far in that 
direction. That is one.
    At the State--while there are State policies the Federal 
Government could, in principle, have effects on, things like 
certificate of need, which some States still do have--we have 
tons of evidence on that at this point--we can talk about 
things like scope of practice.
    Especially when you talk about rural areas, the natural 
level of competition that is going to be supported is going to 
be lower. And so you have really got to push everywhere you 
can. You have got to think about where can we realistically 
harness telehealth, right? Certain areas, mental health, things 
like that, you have a lot of opportunity to use that.
    But still, you know, at the end of the day, I think about 
the U.S. healthcare system in sort of three buckets. There's 
the really competitive markets, big cities; there's the 
plausibly competitive markets, a lot of midsized cities that 
may have one big, big provider; and then you have got rural 
areas. And you just do need to recognize that rural areas are a 
little bit different and be open to being a little bit more 
creative in those settings.
    Mrs. Miller-Meeks. Thank you so much for that answer. And 
we have talked some about PBMs, and as a State senator in 2019 
I put forward a bill in Iowa for transparency within the PBM 
and for the rebates, half of the rebate to go back to the 
person paying for the drugs. I got it through the Senate, but 
not the rebate part, the transparency part. We finally did not 
get it through the House that year, but we finally did. But 3 
years later, we still don't have the transparency data coming 
forward, which we are finally getting to come forward.
    And as you all know, the three largest PBMs--CVS Caremark, 
Express Scripts, and OptumRx--manage about 80 percent of all 
prescriptions in the United States, up from 48 percent a decade 
ago. And, you know, this is very pivotal in how we make 
decisions. We have--one of the PBM tactics--and I won't talk 
about all of them, but it is something that Representative 
Carter and I have worked on--is the growing practice of 
misappropriating patient assistance dollars for the benefit of 
the PBM's bottom line. A middleman places increasing cost on 
patients by relying more on coinsurance and deductibles, copay 
assistance, an important bridge to ensure access to needed 
medications.
    So Ms. Bartlett, what financial burdens do accumulators 
place on patients when copay assistance maximum is reached?
    [No response.]
    Mrs. Miller-Meeks. I may have to use--have you submit that 
in writing, because my time is----
    Mr. Bartlett. I definitely will.
    Mrs. Miller-Meeks [continuing]. Expired, so----
    Mr. Bartlett. I definitely will. I got the question.
    Mrs. Miller-Meeks. So if you would submit that in writing, 
I would thank you.
    Thank you, Mr. Chair. I yield back.
    Mr. Guthrie. Thank you. I thank the gentlelady for yielding 
back. We have now completed--the Members who are--of the 
committee--we have three that waived on, two that are present. 
So we--it looks like we have two more witnesses, so thank you 
all for your patience, and we will now go to our members of the 
full committee that are meeting here with us today, and the 
first will be Ms. Matsui from California.
    You are recognized for 5 minutes.
    Ms. Matsui. Thank you very much, Mr. Chairman and Ranking 
Member Eshoo, for having this very important hearing today and 
allowing me to waive on. And thank you for the witnesses for 
being here today. I want to ask Mr. Forge a question.
    I would like to briefly discuss the 340B program, which I 
know has been discussed here. But as many of my colleagues 
know, I have long been a champion of the 340B program, which is 
a critical part of the healthcare safety net that all our 
constituents depend on.
    Unfortunately, there has been a lot of criticisms about 
this program lately, and I am concerned about some of the 
conversation around 340B happening today, which is why I felt 
compelled to waive on. 340B is, first and foremost, a program 
to provide discounted drugs to low-income patients. But some of 
the critics of this program seem to forget that 340B has 
another critical purpose: to help safety-net providers to 
provide critical services to underserved patients and to 
empower them to stay open, especially after the strains of the 
past few years.
    Mr. Forge, can you share some of the programs or services 
Pullman Regional is able to offer because of your 340B 
discounts?
    And what would happen if the hospital is no longer able to 
participate in the 340B program?
    Mr. Forge. Well, I want to answer you in a couple of 
different ways.
    You know, first of all, it impacts more than just Pullman 
Regional Hospital. You know, there are local pharmacies who we 
contract with, which are really lifelines for small 
communities, you know, that they are serving. Colfax, 
Washington, is one that comes to mind.
    You know, we are working in rural areas on 2 to 4 percent 
margins, you know, really tight margins. And so, you know, 
maintaining access to high-quality, board-certified physicians 
in our emergency room, for example, you know, making sure that, 
you know, we have 24-hour access to obstetric care, et cetera.
    You know, 2 to 4 percent is not a lot, you know, it doesn't 
go a long ways. And so 340B, without that, you know, we would 
most likely have to cut some critical services to our service 
area as well as lose some lifeblood providers to our 
communities.
    Ms. Matsui. Oh, absolutely. Now, you mentioned pharmacies. 
One way that PhRMA and other 340B critics have attempted to 
chip away at the program is by restricting entities from using 
contract pharmacies.
    Mr. Forge, I know that Pullman Regional has relationships 
with several contract pharmacies to help you distribute your 
discounted drugs. Can you share why it is so important to your 
hospital and the patients you serve to use contract pharmacies?
    Mr. Forge. Well, you know, I have to say that we have had 
positive and negative experiences with contract pharmacies, and 
the most positive ones have been with the community-based, you 
know, pharmacies. So I kind of want to stick with that. You 
know, we haven't always had positive ones, but they are--and 
the reason why there is one better than the other, it really 
comes down to the service and--the customer service that goes 
back to the patient, goes back to the people that live in the 
community.
    Ms. Matsui. Certainly.
    Mr. Forge. You lose that a little bit with some of those 
bigger ones.
    Ms. Matsui. Certainly, yes. I have another question for you 
regarding transparency around 340B.
    Some of the latest proposals on 340B reform have suggested 
a need for greater accountability. Mr. Forge, can you briefly 
describe the requirements your hospital already faces when it 
comes to submitting data to HRSA and maintaining records 
documenting compliance with 340B requirements?
    Mr. Forge. Sure. You know, I will talk, you know, back to 
my experiences. I have worked in multiple rural communities in 
critical access areas.
    Some of the hospitals that I worked with were not able to 
meet the regulatory standards because of the high bar that they 
have, you know, within 340B. And therefore, those communities--
in very rural Idaho, for example--weren't able to benefit from 
those.
    You know, in other areas we had a little more expertise on 
our team. We were able to kind of pull that off in Wisconsin. 
And now, you know, back in Pullman, we are still figuring it 
out. We have to rely on outside resources to help us manage the 
340B thing. That just tells you how complicated that it really 
is. We have multiple audits per year that really stress our 
team outside of normal operations--our finance teams, that is.
    And so it is a standard that we are continuing to strive to 
do. We take it seriously. We want to be accountable to that. 
But that becomes more and more difficult as we go, and more 
complexity keeps being added.
    Ms. Matsui. Absolutely. You know, I understand, you know, 
but I am concerned about proposals that unnecessarily burden 
you. You have already gone through all of that.
    I really appreciate the reminder of the importance of this 
program. I think we all agree that it is very important, and I 
don't want this program to be a scapegoat of high drug pricing 
and other problems that we know exist with our healthcare 
system. So I really do appreciate this committee bringing this 
up today, and I would really like to strengthen 340B and make 
sure it is there for the right reasons.
    So thank you very much, and I yield back.
    Mr. Guthrie. Thank you. The gentlelady yields back, and 
next will be Mr. Allen.
    You are recognized for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman, and thanks for waiving 
me on.
    To give you a little background about why I am very 
interested in this is--and I want to thank the witnesses for 
staying with us and talking about this important issue. But 
back from 1991 to 2000--of course, I was running a construction 
business back then--and about 80 percent of our work was 
healthcare. And in fact, one of my clients asked me to serve as 
chairman of the hospital board, and I did that for--from 1991 
to 2000.
    And it was pretty interesting, how things evolved, because 
in the construction business you got to know what your costs 
are or you are not going to be in business very long. And what 
I learned about hospital accounting is--and one of the things 
we worked on--is we really didn't know what it cost us to do 
business. We knew that we charged a dollar, that at that time 
Medicare was paying about 60 cents on the dollar. And the 
insurance companies started--you know, they at one time were at 
$1. Of course, we had a functional free market healthcare 
system back then, and then they dropped below Medicare.
    So I said we better figure out what our cost is here, or we 
are going to be out of business real quick. And unfortunately, 
that hospital is consolidated now, along with two other 
hospitals, and we have no locally owned or operated hospitals 
in my hometown of Augusta, Georgia.
    And, you know, the--I was also asked to, as the ranking 
member on the Health, Employment, Labor, and Pensions 
Subcommittee over at Education and Workforce, which covers 
about 160 million lives all year, ERISA, healthcare, and I 
was--I was asked to serve on the Healthy Future Task Force 
Subcommittee.
    And again, my question to all the experts--and we had some 
great testimony from folks talking to us about where healthcare 
is and what we got to do as far as affordability is concerned, 
but not one could tell me where our healthcare dollars are 
going. Not a single one. In fact, they said it was impossible. 
And I think it is because we don't have a functional free 
market system to compare anything to.
    And so I said, ``How do we peel the onion back here?'' 
And--because we got tax dollars going into this, we got premium 
dollars going into this. And guess what? You know, we are--I 
was in Israel. Eight percent of their GDP, healthcare. Nobody 
complained about their healthcare system. And I have a hard 
time finding folks that are happy with the healthcare system, 
you know, with their healthcare or the providers happy with 
healthcare in this country.
    But, Ms. Tripoli, your organization advocates for patients. 
And so what is the most single important thing to make sure 
that patients know about how their healthcare dollars are being 
spent?
    Ms. Tripoli. Well, I think you really nailed it, which is 
there has been an incredible shift over the last 60 years. 
Hospitals that used to be these community-based institutions 
have emerged into these megacost centers, and communities have 
watched their local hospitals disappear. It is a major problem. 
It is the number-one driver--it is one of the biggest drivers 
of unaffordable care in the form of higher prices.
    So I think, for consumers, it is knowing that, it is 
knowing that their local hospital doesn't exist anymore. And so 
we need to think about the types of solutions that we can 
implement that are going to bring down the cost of care for the 
American people. It is the very solutions we are talking about 
today in terms of strengthening price transparency, codifying 
that rule----
    Mr. Allen. Exactly, yes.
    Ms. Tripoli [continuing]. Expanding site-neutral payments.
    Mr. Allen. Yes, right. Well, good, thank you.
    Mr. Severn, we--as part of the Healthy Future Task Force we 
had several companies--and Walmart is involved in what is 
called direct contracting for healthcare. Could you--and of 
course, obviously, they are doing it and our business community 
is going to figure this out, but we are going to have to have a 
functioning free market healthcare system to do it, because the 
government is driving everything right now.
    But they have been able to use direct contracting to 
personalize care for their employees. Mr. Severn, can you 
comment on and tell us about your experience with direct 
contracting?
    Mr. Severn. Prior to this transparency data being published 
in 2021, direct contracting was really only possible for large 
employers that could act as payers. They could pay the 
consultants, they could buy the data sets. With this new 
transparency data public, the barrier to direct contracting 
goes down, and so we will see more companies much smaller than 
Walmart have the ability to enter into direct contracts with 
providers, just based off the available----
    Mr. Allen. Yes. And one of the things we wanted to do in 
our committee was to allow companies to form co-ops to do this, 
that they could then have the influence of a large contractor.
    Listen, you all been great. Thank you so much for your 
testimony.
    And thank you, Mr. Chairman, again.
    Mr. Guthrie. Thank you.
    Mr. Allen. I yield back.
    Mr. Guthrie. I thank the gentleman for yielding, and we do 
have one more. We have Mr. Balderson from Ohio, who is waiving 
on for the hearing for 5 minutes.
    You are recognized for 5 minutes for questions.
    Mr. Balderson. Thank you, Mr. Chairman, I appreciate the 
waiver, and thank you all for hanging in there today. I will be 
brief.
    Mr. Severn, from your experience with your patient-facing 
transparency tool, do you agree that, when provided accurate 
pricing data, patients make informed judgments on where they 
want to receive care?
    Mr. Severn. The short answer is patients are just starting 
to learn that this data is there. And we are very early in 
seeing patients use this data. The best way to present the data 
is something simple, a consumer experience like we see 
elsewhere on Amazon or other e-commerce sites. Once that is 
possible on Turquoise and other sites, to say ``this is the 
upfront cost, this is the only bill you are going to get,'' we 
will see a huge consumer uptake here. But we are just starting 
to see this at Turquoise.
    Mr. Balderson. I agree. Unfortunately, CMS disagrees with 
you, since it denied an innovative health plan by claiming it 
is, and I quote, ``not reasonable to expect prospective 
enrollees to understand'' a new, unique plan.
    Last year I wrote a letter, a bipartisan letter, to CMS in 
support of increasing access to innovative health plans that 
already are providing price transparency for patients. These 
plans are similar, somewhat similar, to the ones used in 
Montana by Ms. Bartlett, as they offer set reimbursement for 
anything you can do in the healthcare system. This allows 
consumers to shop for care and receive information about their 
cost obligations at any given provider--not just any given 
provider in their network, any given provider, period.
    But what Mr. Severn is saying is that the consumers can and 
do have the ability to shop for value. As we increase the level 
of price transparency in our healthcare system, it is important 
to ensure that the entire system keeps up, and lessons learned 
in one place are applied to others to maximize their benefits 
for patients.
    Mr. Forge, I myself come from rural Ohio, in Ohio's 12th 
congressional district, but I also have central Ohio, which has 
some of the big healthcare systems. Just like yours, though, 
the smaller one serves smaller communities. No one wants to be 
more punitive to the small community hospitals that are already 
stretched thin and trying to serve their patients, but we all 
agree that price transparency is important.
    How do we work with these hospitals to make sure their 
price transparency experience is a positive one for the 
hospital and patients?
    Mr. Forge. Well, good question. I appreciate it.
    Mr. Balderson. Thank you.
    Mr. Forge. I think, though, the first step is just 
recognizing that they need the help, right, recognizing that we 
need--you know, we need support, and making sure that it is a 
good experience.
    But I think it comes back down to, you know, really 
thinking about those families and those individuals, and really 
helping those people with their medical literacy, helping them, 
you know, access programs like Mr. Severn here, and helping 
people access, you know, what people and the--that have bigger 
resources and bigger health systems have access to.
    So it is recognizing it, you know, removing barriers, and 
continuing to focus on improving.
    Mr. Balderson. OK. Thank you. My last question, Mr. Severn 
is for you again, I apologize.
    Starting this year, insurers were required to provide 
personalized pricing information for 500 items and services to 
their enrollees. Have you tracked insurer compliance with this 
aspect of the rule?
    Mr. Severn. We don't track insurer compliance with that 
aspect. We just look at the machine-readable file, the second 
piece of the requirement. That is what we track.
    Mr. Balderson. How is it working?
    Mr. Severn. You know, the stat we shared is 96 percent of 
covered lives are represented in the data across 181 payers as 
of today, which is much quicker than the hospital compliance--
--
    Mr. Balderson. Yes, it is. Thank you.
    Mr. Chairman, I yield back, and I thank you all again.
    Mr. Guthrie. Thank you.
    The gentleman yields back. Seeing no further witnesses, 
that concludes witness questions.
    Thank you all so much for being here. I know it has been a 
long afternoon, but I know you are passionate about these 
issues as bipartisan. We are, as well, and look forward to 
making this the first of many efforts to get to the point where 
we are going to have transparency in the healthcare system, so 
that people can--we need healthcare systems to be--to exist, so 
they are going to need to do what they need to do--exist--but 
we also need information so people can make fair choices. So we 
are looking forward to that, moving forward.
    I do have a list that I have shared with the ranking member 
of documents for the record from the majority and the minority. 
Any objection?
    Without objection.
    Ms. Eshoo. No objection, Mr. Chairman.
    Mr. Guthrie. No objection, so it is so ordered.
    [The documents appear at the conclusion of the hearing. 
\1\]
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    \1\ The list of accepted documents has been retained in committee 
files and is included in the Documents for the Record at https://
docs.house.gov/meetings/IF/IF14/20230328/115581/HHRG-118-IF14-20230328-
SD003.pdf.
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    Mr. Guthrie. And then I want to remind the Members they 
have 10 business days to submit questions for the record. And I 
ask the witnesses to respond to the questions promptly. Members 
should submit their questions by the close of business on April 
the 11th.
    And without objection, the subcommittee is adjourned.
    [Whereupon, at 4:32 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
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