James Capretta offers a two-step plan at RealClearPolicy.com for increasing price transparency in health care.

Promoting a stronger consumer role will require far more disruption of the status quo. In particular, two steps are necessary: a required pricing list established by the federal government of strictly standardized services, and universal reference-based payments by insurance plans for services on the required pricing list.

The administration’s new regulation introduces the concept of a required pricing list but only tentatively. Consumers will only price shop if they can make, with minimal effort, apples-to-apples comparisons among competing suppliers. The federal government can facilitate consumer price shopping by establishing a required pricing list comprised of standardized services and discrete clinical interventions that are amendable to comparison shopping. The prices posted by providers for services on the list would be considered walk-up prices available to all consumers, regardless of their insurance status.

The prices posted also would be “all in” rates. Consumers would get all relevant services associated with an intervention at the stated price. There should be no surprise bills. For services that involve multiple parties (such as those involving a hospital and more than one physician), providers should be required to participate in coordinated pricing, so that consumers only have one bill covering the full episode of care. This may require providers to establish contractual relationships with each other that otherwise might not exist.

The second step is a system of universal reference-based payments by insurance plans.

Reference-based payments are a proven cost control strategy.