Health care prices in the United States
The prices of health care in the United States are higher than in other countries. Compared to other OECD countries, U.S. healthcare costs are one-third higher or more relative to the size of the economy. According to the CDC, during 2015, health expenditures per-person were nearly $10,000 on average, with total expenditures of $3.2 trillion or 17.8% of GDP. Proximate reasons for the differences with other countries include higher prices for the same services and greater use of healthcare. Higher administrative costs, higher per-capita income, and less government intervention to drive down prices are deeper causes. While the annual inflation rate in healthcare costs has declined in recent decades, it still remains above the rate of economic growth, resulting in a steady increase in healthcare expenditures relative to GDP from 6% in 1970 to nearly 18% in 2015.
Nature of the healthcare markets
Coverage
Health insurance coverage is provided by several public and private sources in the United States. During 2016, the U.S. population overall was approximately 325 million, with 53 million persons 65 years of age and older covered by the federal Medicare program. The 272 million non-institutional persons under age 65 either obtained their coverage from employer-based or non-employer based sources or were uninsured. Approximately 15 million military personnel received coverage through the Veteran's Administration. During the year 2016, 91.2% of Americans had health insurance coverage. An estimated 27 million people under the age of 65 were uninsured.Price transparency issues
Unlike most markets for consumer services in the United States, the healthcare market generally lacks transparent market-based pricing. Patients are typically not able to comparison shop for medical services based on price, as medical service providers do not typically disclose prices prior to service. Government mandated critical care and government insurance programs like Medicare also impact the market pricing of U.S. health care. According to The New York Times in 2011, "the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care" and prices are the highest in the world.In the U.S. medical industry, patients generally do not have access to pricing information until after medical services have been rendered. A study conducted by the California Healthcare Foundation found that only 25% of visitors asking for pricing information were able to obtain it in a single visit to a hospital. This has led to a phenomenon known as "surprise medical bills", where patients receive large bills for service long after the service was rendered.
Since the majority of Americans have health insurance, they do not directly pay for medical services. Insurance companies, as payors, negotiate health care pricing with providers on behalf of the insured. Hospitals, doctors, and other medical providers have traditionally disclosed their fee schedules only to insurance companies and other institutional payors, and not to individual patients. Uninsured individuals are expected to pay directly for services, but since they lack access to pricing information, price-based competition may be reduced. The introduction of high-deductible insurance has increased demand for pricing information among consumers. As high-deductible health plans rise across the country, with many individuals having deductibles of $2500 or more, their ability to pay for costly procedures diminishes, and hospitals end up covering the cost of patients care. Many health systems are putting in place price transparency initiatives and payments plans for their patients so that the patients better understand what the estimated cost of their care is, and how they can afford to pay for their care over time.
Organizations such as the American Medical Association and AARP support a "fair and accurate valuation for all physician services". Very few resources exist, however, that allow consumers to compare physician prices. The AMA sponsors the Specialty Society Relative Value Scale Update Committee, a private group of physicians which largely determine how to value physician labor in Medicare prices. Among politicians, former House Speaker Newt Gingrich has called for transparency in the prices of medical devices, noting it is one of the few aspects or U.S. health care where consumers and federal health officials are "barred from comparing the quality, medical outcomes or price".
Recently, some insurance companies have announced their intention to begin disclosing provider pricing as a way to encourage cost reduction. Other services exist to assist physicians and their patients, such as Healthcare Out Of Pocket, Accuro Healthcare Solutions, with its CarePricer software. Similarly, medical tourists take advantage of price transparency on websites such as MEDIGO and , which offer hospital price comparison and appointment booking services.
According to the estimation of the US government, hundreds of thousands of Americans traveled to Mexico annually to get healthcare services.
Hospital Price Transparency in the United States
Hospital price transparency in the United States refers to federal regulations requiring hospitals to publicly disclose pricing information for healthcare services in standardized formats. These requirements were introduced to address long-standing opacity in hospital pricing, where patients, employers, and payers often lacked access to meaningful price information prior to receiving care.In November 2019, the Centers for Medicare & Medicaid Services finalized the Hospital Price Transparency Rule, requiring hospitals to make public their standard charges, with enforcement beginning January 1, 2021. The regulation requires hospitals to publish two primary forms of pricing data: a machine-readable file containing payer-specific negotiated rates for all services, and a consumer-friendly display of prices for a defined set of shoppable services.
The machine-readable file must include gross charges, discounted cash prices, and rates negotiated with each third-party payer, along with standardized service descriptions and billing codes to support analysis and comparison.
CMS expanded and clarified enforcement requirements in subsequent rulemaking, including updates effective July 1, 2024, which standardized file formats, required additional data elements, and strengthened validation requirements. These changes were intended to improve data usability and regulatory oversight following findings of inconsistent compliance and data quality in earlier years.
The U.S. Government Accountability Office reported in 2022 that while hospital price transparency regulations increased public access to pricing data, many hospitals were not fully compliant, and enforcement actions were limited during the early years of implementation. Researchers and policymakers have also noted that price transparency rules focus on negotiated rates rather than patient-specific out-of-pocket costs, limiting their usefulness for some consumers. Because hospital machine-readable files can be large and inconsistently formatted, third-party data providers and research programs often collect, normalize, and validate these disclosures to make them usable for analysis across hospitals, payers, and geographies. For example, the Robert Wood Johnson Foundation’s Health Data for Action program has listed price transparency data providers such as Serif Health and Turquoise Health among resources available to researchers through the
Hospital price transparency regulations operate alongside, but are distinct from, other healthcare pricing mechanisms such as chargemasters, insurer explanation-of-benefits documents, and state-level price disclosure laws.
Health Plan Price Transparency
Health plan price transparency in the United States refers to federal requirements that most non-grandfathered group health plans and health insurance issuers publicly disclose pricing information for covered items and services, with the goal of helping consumers understand potential costs before receiving care and enabling third-party analysis.The primary federal framework is the Transparency in Coverage rulemaking issued jointly by the U.S. Departments of Health and Human Services, Labor, and the Treasury. The TiC final rules require plans and issuers to disclose pricing information through machine-readable files, including in-network negotiated rates and out-of-network allowed amounts and billed charges. CMS notes that, as of July 1, 2022, most plans and issuers began posting machine-readable pricing information for covered items and services.
The TiC final rule also established an internet-based price comparison tool requirement, which applies in phases: for plan years beginning on or after January 1, 2023 the tool must cover an initial set of 500 items and services, and for plan years beginning on or after January 1, 2024 it must cover all covered items and services.
Although the 2020 final rule included a prescription drug machine-readable file requirement, the Departments have issued guidance affecting enforcement and have indicated that technical requirements and an implementation timeline for the prescription drug file would be addressed in future guidance and/or rulemaking.
Researchers and policymakers have noted that TiC machine-readable files can be difficult to use at scale because they are large, heterogeneous, and require substantial processing to support analysis across plans and provider networks.
In December 2025, CMS and the Departments proposed updates intended to improve standardization, reliability, and accessibility of payer disclosures, including proposals aimed at reducing file size and duplication, increasing contextual data elements, improving file discoverability, and shifting some disclosures toward network-level reporting.