Smarter disclosure of hospital data may be a sovereign remedy for price gouging

If knowledge is power, ignorance is impotence. Citizens, consumers, investors, and patients all need trustworthy information when we vote, making purchasing decisions, buy stocks or other assets, or choose a surgeon, medical device, nursing home, or dialysis center.

That’s why transparency in elections, marketplaces, and stock markets is a fundamental expectation in modern democratic states, codified into law by legislatures and embodied in regulators backed by the rule of law. 

Transparency is not just a “nice to have” condition in democratic states of, by, and for the people. It’s necessary for people to make informed decisions in the most important decisions of our lives, from elections to education to housing to healthcare. 

Transparency into public utilities and common carriers is critical for regulators to ensure consumers are literally not left in the dark, disconnected, without water, or Internet connections during or after an emergency — or by design, due to unjust housing or unconstitutional discrimination for goods or services. 

People trapped in monopolies or duopolies or dysfunctional bureaucratic systems who cannot make other choices provided in regulated marketplaces are stuck relying upon transparency about outages and complaints about service quality or delivery to drive action by regulators.

In practice, residents may have to resort to protests and direct action where powerful telecom and utility companies capture those entrusted with the power to sanction them. Recent initiatives around equity in service delivery and investments in infrastructure by the Biden Administration are relevant to better outcomes as well: populations without high speed Internet access won’t be empowered by knowledge they cannot access.

The slow march towards improved disclosure of hospital pricing data in the United States over the past decade is a canonical example of just how difficult it is to codify the principle of transparency into practice.  In a rough parallel to the Security & Exchange Commission’s disclosure requirements for publicly traded companies and the Federal Election Commission’s disclosure requirements for campaigns, the Centers for Medicare and Medicare Services (CMS) began requiring hospitals to post the prices of procedures online. The rule was well-conceived, but poorly executed. Years on, compliance with the Hospital Price Transparency Rule still mixed, if steadily improving. 

But if regulators and elected officials do not invest in ensuring that knowledge empowers consumers when, how, and where we make decisions, “smart disclosure” won’t have the impact policy makers intend.

As with disclosures of the contaminants in excess water from fracking sprayed on highways, if hospitals are allowed to disclose data in thousands of rows of files with obscure medical codes, zombie data will sit inert, neither living or dead, helping no one.

That’s the information gap that a private, venture-backed startup named Turquoise Health is trying to bridge. Turquoise is trying to make the hospital pricing data the federal government mandated be disclosed structured and more meaningful.

At present, Turquoise is providing free and paid access to the open data they’ve structured: You can search for providers in your state through their engine. Turquoise publishes “transparency scorecards” that show how healthcare providers are complying with disclosure rules, highlights providers that have not done so yet, and enables patients and caregivers to search for the price of a given procedure in an area, like “total knee replacement.”

In the world’s most expensive marketplaces for private health care, if patients and caregivers don’t have meaningful choices between limited health care providers in a region or can only seek care or procedures at the providers their insurer improves, transparent pricing data is a moot point. 

But while millions of Americans receive health care where our insurance companies allow us to seek it — or be faced with ruinous bills by paying out of pocket — patients and caregivers do have some elasticity around where we go for pharmaceuticals or services, like dialysis. That’s where more health data empowers people.

Most of what Turquoise is using isn’t open government data: it’s open corporate data that a government mandated to be opened. It’s also a strong signal from a future that’s already here.

This is not an uncomplicated dynamic: a private company has positioned itself as a key infomediary for disclosures that directly benefit consumers. Congress and regulators should be carefully monitoring and where and how the benefits of disclosures pass through to patients and caregivers, along with continuing to evaluate if this data supply chain remains open and accessible.

While nonprofits may not prove to be sustainable stewards of key data sets, profit-driven firms may not be, either, should ownership change or commercial incentives lead executives to try to capture more value than they create.

Transparency is always complicated and mediated by context and power, but it’s the sovereign remedy to secrecy that masks gouging, profiteering, corruption, or simple greed.

Transparency can be a blunt tool, where disclosures are used like a maul to batter corrupt or incompetent officials or executives who fail to winterize a power plant, scale a website to meet surging demand, or contaminate shipments of medicine or vaccines.

Transparency can be corrupted and applied to pollute public discourse through weapons of mass distraction, where weaponized disclosures target marginalized populations to create the public appearance of greater threats.

But transparency also can be a great disinfectant, as Justice Brandeis famously observed: insider trading based upon secret information is criminalized in modern democracies, even if law markers may carve out exceptions for themselves and their families. Corporations face steep fines or shutdowns if they deceive consumers about the quality or safety of their goods and services. Political campaigns and candidates face sanction from law enforcement and election regulators if they conceal donations from foreign states or fail to disclose their fundraising and spending.

In practice, what happens inside of the powerful institutions and obscure entities that govern elections, consumer products and services, financial markets, and healthcare — one of the most regulated marketplaces on Earth — is often not transparent to everyone, because people in power prevent disclosure or the creation of records and data in the first place.

Whether powerful people and institutions that break regulations or violate laws by keeping information secret varies by state and governance system. “Authoritarian blindness,” in which a state withholds crucial information about public health or environmental safety during a pandemic or emergency from the public or world, is the inverse of the free flow of information people in healthy democracies expect and need in order to be self-governing.

Here’s hoping the USA doubles down on getting trustworthy health information into the hands of all of its people, when and where we need to make life and death decisions about our care and that of others.

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