How Price Transparency May Affect Health Care Costs: John Barkett, MBA

In this interview, John Barkett, MBA, managing director in BRG’s Healthcare Transactions and Strategy practice and former senior policy advisor for Health Care Delivery System Reform on the White House Domestic Policy Council, explores how health care price transparency can affect both patient out-of-pocket costs and overall health care spending, emphasizing that its impact is not universally positive or straightforward.

Barkett paints a picture of a possible scenario where price transparency could lead to lower costs. In situations where the patient is not in an urgent crisis and has time to compare options, price transparency can be powerful. If the patient can see prices from 2 or more providers for the same type of care and can reasonably assess that the quality is comparable, they may choose a lower-cost option that still meets their needs. This kind of informed choice can reduce out-of-pocket spending for the patient and, potentially, total system costs.

However, Barkett notes that this idealized scenario often collides with real-world dynamics. For instance, physicians typically control referrals and often rely on a familiar network of specialists or facilities. They may strongly recommend certain providers because they trust their quality and have established relationships that ensure timely information sharing. Although this is not nefarious, it can limit patients’ practical ability to shop around, even when prices are transparent.

Central to the transparency discussion is the concept of “shoppable services”—health care services for which an average patient can reasonably compare price and quality without needing advanced medical expertise. These services are where transparency is most likely to influence behavior and pricing.

Beyond individual consumer choices, Barkett explains that published pricing data can also be leveraged by health insurers or consumer-focused companies. By analyzing the data, these organizations can identify inefficiencies and negotiate better rates on behalf of patients and employers. Yet, there is a critical caveat: the same transparency can reveal to some providers that they are underpaid relative to peers, enabling them to demand higher prices if they possess sufficient market leverage. In such cases, transparency may actually push both premiums and patient costs higher.