To be or not to be compliant? Hospitals' initial strategic responses to the federal price transparency rule

Jessica N Mittler; Jean M Abraham; Julie Robbins; Paula H Song

doi:10.1111/1475-6773.14252

To be or not to be compliant? Hospitals' initial strategic responses to the federal price transparency rule

Health Serv Res. 2023 Nov 6. doi: 10.1111/1475-6773.14252. Online ahead of print.

Authors

Jessica N Mittler¹, Jean M Abraham², Julie Robbins³, Paula H Song¹

Affiliations

¹ Department of Health Administration, College of Health Professions, Virginia Commonwealth University, Richmond, Virginia, USA.
² Division of Health Policy and Management, School of Public Health, University of Minnesota, Minneapolis, Minnesota, USA.
³ Department of Health Services Management and Policy, College of Public Health, The Ohio State University, Columbus, Ohio, USA.

PMID: 37930618
DOI: 10.1111/1475-6773.14252

Abstract

Objective: To understand US hospitals' initial strategic responses to the federal price transparency rule that took effect January 2021.

Data sources and study setting: Primary interview data collected from 12 not-for-profit hospital organizations in six US metropolitan markets. All but one organization were multihospital systems; the 12 organizations represent a total of 81 hospitals.

Study design: Exploratory, cross-sectional, qualitative interview study of a convenience sample of hospital organizations across six geographically and compliance diverse markets.

Data collection/extraction methods: In-depth, semi-structured, qualitative interviews with 16 key informants across sampled organizations between November 2021 and March 2022. Interviews solicited data about internal organizational factors and external market factors affecting strategic responses. Transcribed interviews were de-identified, coded, and analyzed using the constant comparative method.

Principal findings: Hospitals' strategic responses were influenced internally by the degree of the regulation's alignment with organizational values and goals, and task complexity vis-a-vis available resources. We found extensive variation in organizational capabilities to comply, and all but one organization relied on consultants and vendors to some degree. Key external factors driving strategic responses were hospitals' variable perceptions about how available price information would affect their competitive position, bottom line, and reputation. Organizations with more confidence in their interpretation of the environment, including how peers or purchasers would behave, and greater clarity in their own organization's position and goals, had more definitive initial strategic responses. In the first year, organizations' strategic responses skewed toward compliance, especially for the rule's consumer shopping requirements.

Conclusions: A deeper understanding of the realities of operationalizing price transparency policy for hospitals is needed to improve its impact.

Keywords: anti-trust/health care markets/competition; health policy/politics/law/regulation; hospitals; organization theory; qualitative research.