Price Transparency Won’t Fix Health Care Until the Data Does

The latest proposed updates to federal price transparency regulations signal a deeper acknowledgment of an uncomfortable truth: health care pricing data is now technically public, but still functionally unusable. The Centers for Medicare & Medicaid Services (CMS), working with the Departments of Labor and Treasury, aims to correct this mismatch by simplifying data formats, reducing redundancies, and making cost tools more accessible. But unless these changes are paired with a broader shift in how price transparency is operationalized across the system, their impact may remain symbolic rather than structural.

From release to usability

The 2020 Transparency in Coverage rules marked a major policy milestone, requiring insurers to publicly disclose negotiated rates and historical out-of-network payment amounts. However, the resulting data releases quickly revealed the difference between compliance and comprehension. Files were often hundreds of gigabytes in size, formatted inconsistently, and overloaded with duplicative or irrelevant information. Even for academic researchers and enterprise analytics teams, the data proved daunting to navigate.

A 2023 Health Affairs review found that most pricing data released under the original rules remained unexamined by the very stakeholders the regulations were meant to empower. The proposed updates, such as reorganizing files by provider network, reducing unnecessary entries, and improving version control, attempt to remove these usability barriers without walking back the transparency mandate itself.

These are sensible changes. But their success will depend on more than just improved formatting. They require a health care ecosystem capable of making price data actionable in real time, not just retrospectively useful.

Cost clarity is not cost control

Transparency, in theory, empowers choice. But in practice, patients rarely use cost-comparison tools when making decisions, either because the tools are difficult to access, or because the design of the system doesn’t support meaningful choice in the first place. For patients covered by employer-sponsored plans or enrolled in tightly managed networks, even perfect knowledge of pricing may have little bearing on where or how they receive care.

A recent RAND Corporation study noted that while price transparency can modestly influence consumer behavior, it is far more effective as a lever for employers, regulators, and benefit managers to negotiate rates and benchmark performance. The proposed rule appears to recognize this, with changes aimed at equipping institutional stakeholders with cleaner data and longer lookback periods. But the central question remains: will transparency actually lower prices—or merely reveal their irrationality?

Without complementary policies to address price variation, provider market consolidation, and opaque billing practices, disclosure alone is unlikely to generate the competitive pressures policymakers hope for.

The fragmentation problem

One of the more overlooked aspects of the proposed update is its alignment with the Hospital Price Transparency rule, which governs a separate but parallel stream of pricing data. By structuring insurer data in a way that mirrors hospital reporting, the Departments are trying to create a more coherent view of pricing across the payer-provider interface.

Yet fragmentation remains a defining feature of U.S. health care data infrastructure. Disparate file formats, inconsistent definitions of services, and variation in coding practices make even basic comparisons difficult. This fragmentation doesn’t just frustrate consumers. It actively hinders analytics, policy evaluation, and the development of reliable pricing benchmarks.

Efforts to standardize cost-sharing disclosures under the No Surprises Act may help. The new rule proposes that personalized cost estimates, whether delivered online, by phone, or in print, must be equally detailed and accessible, regardless of a patient’s internet access or digital fluency. But making transparency equitable is not the same as making it effective. Equity in access to complex data is meaningless if the data itself remains structurally unworkable.

A signal to the market, not a fix for it

To their credit, the Departments have focused this proposal on technical refinements rather than sweeping overhauls. This approach sends an important signal: that the government sees transparency not as a one-time compliance event, but as an ongoing infrastructure challenge. Enhancements such as utilization files and changelogs indicate a shift toward treating pricing data as living information—something to be queried, tracked, and acted upon over time.

However, there are limitations. The rule does not address prescription drug pricing, a major driver of patient out-of-pocket costs and system-wide expenditure. Nor does it propose mechanisms to enforce data quality or penalize noncompliance more aggressively which are issues that have plagued implementation of the original rules. According to a 2024 report from the Peterson-KFF Health System Tracker, over half of hospitals failed to meet the transparency requirements as of midyear, with minimal enforcement consequences.

The Departments are soliciting feedback on further burden reduction and standardization, but stakeholder engagement must extend beyond regulatory comment periods. For transparency to function as intended, insurers, health systems, and third-party tool developers must co-own the challenge of turning price data into decision-ready insights.

Redefining impact

The core goal of price transparency has always been to rebalance informational power in a system where patients and purchasers typically have the least. But publishing prices alone does not equal empowerment. Only when data is structured for interpretation, supported by aligned incentives, and embedded in the actual workflows of care will its impact become real.

The proposed rule represents an overdue but necessary course correction. It makes price transparency more than performative, but not yet transformative. That threshold will be crossed only when pricing data stops being an artifact of regulation and becomes a functional element of how the system negotiates value, measures equity, and rewards efficiency.

For now, transparency remains a means, not an end. But it is a means worth refining,especially in a system that too often obscures cost at the expense of care.