Recent bipartisan policy efforts have focused on price transparency for “shoppable” healthcare services, with initial Trump administration efforts to support hospital price transparency continued and magnified by the Biden administration. A renewed push for transparency helps shift markets over time and empowers patients to become more active purchasers of medical services, either individually or as part of shared decision-making with their physician.

With increased transparency, the inevitable question arises: What value am I getting for my dollar? With the Medicare Hospital Insurance Trust Fund facing insolvency in 2028, this question is of broader political and policy significance. While President Joe Biden’s budget has proposed moving up the timeline for and increasing the number of prescription drugs subject to a form of administrative pricing — a policy intervention rife with options for industry gaming — to lower healthcare costs, transparency offers a more durable solution to reduce healthcare costs and improve value.

Increased transparency has highlighted the challenges posed by a lack of site-neutral payment. At its core, site-neutral payment necessitates that health insurers, including federal programs such as Medicare , pay the same price for a service regardless of the clinic setting in which it is performed. Whether this is for outpatient clinical services, surgical procedures, or rehabilitation, the same principle applies. Site-neutral payment ensures that health systems do not steer patients to higher-cost sites of care in order to drive profits.

Examples of this price-gouging are plentiful. Historically, for more than 30 years, hospitals have purchased independent clinics, which facilitate a kind of payment policy arbitrage wherein hospitals can bill at times up to 50% more for the same service simply by owning the clinic, all without delivering more value to patients (i.e., no difference in clinical outcomes or improvements in the patient experience). Predictably, this payment policy arbitrage has supercharged healthcare consolidation and in turn raised costs for patients. With over two-thirds of metropolitan markets considered consolidated by Federal Trade Commission and Department of Justice standards, this is no small concern.

Alternatively, if differential payment resulted in improved outcomes, decreased complications, or improvements in the patient experience, greater value would justify higher payment. But the only way to determine this is with more transparency into the system and how prices are set in the first place. With political leaders such as former Health and Human Services Secretaries Sylvia Burwell and Michael Leavitt declaring the need to transition to value-based care, these efforts enjoy broad political support.

By making clear the increased costs from the lack of site-neutral payment, transparency facilitates consumer and physician assessments of value. While the problem has been partially corrected through the Bipartisan Budget Act of 2015 and subsequent Centers for Medicare & Medicaid Services rulemaking, scattered gaps still remain.

Site-neutral payment enjoys a broad base in the policy community, supported by scholars from a wide range of organizations encompassing the entire political spectrum such as the Heritage Foundation, Brookings Institution, and the Committee for a Responsible Federal Budget. With the latter institution estimating that site-neutral payments would save the Medicare program $158 billion over a decade , now is the time to ensure that Americans pay for value and fight fraud, waste, and abuse in our health system.

Policymakers should not hesitate: Implementation of site-neutral payment represents the triumph of transparency.

Dr. Brian J. Miller is a nonresident fellow at the American Enterprise Institute and an assistant professor of Medicine at Johns Hopkins University.