Health care providers and insurance companies do not have to reveal their negotiated prices, frustrating everyone trying to control medical costs.

At a hearing to discuss the rising costs of health care benefits for employees of Miami-Dade County in Florida this year, a labor union consultant raised his hand to ask what seemed like a basic question.

Could the committee charged with reducing Miami-Dade labor’s health care expenses look at the spreadsheet showing the rates that the county pays local hospitals and doctors for medical services to employees?

“We really need to understand where the money is being spent in order to be insightful about benefit design changes,” said Duane Fitch, a health care consultant for Service Employees International Union Local 1991, which represents physicians and nurses at the county-owned Jackson Health System.

But the answer to Fitch’s question at that inaugural meeting of the Miami-Dade Labor Healthcare Committee last March was the same response he would receive every time he repeated the question during the panel’s next six meetings through July.

Essentially, no.

“Contracts are proprietary,” said Patricia Nelson, regional head of strategic accounts for AvMed Health Plans, the county’s health benefits administrator that negotiated the payment rates for medical services for county employees. She noted that both the insurance company and the health care providers agree to keep such payment rates confidential.

Fitch and others who asked for the information never got to see precisely how Miami-Dade spends more than $400 million a year to pay health care claims for nearly 60,000 employees, retirees and dependents in the health plan.

That’s because Miami-Dade, and many employers across the country, aren’t allowed to know the prices their own insurance plan administrators negotiate with health care providers, even when they’re self-insured, like Miami-Dade County, and the claims are paid with government money.

And that means the mayor’s health care committee has no more insight than the average Florida consumer on how to lower costs for their employees or themselves.

“You need the data in order to do the proper plan design that drives your outcomes,” said Miami-Dade Commissioner Juan Zapata, whose requests for AvMed’s contracted rates also have been rejected. “Without that, you’re just shooting in the dark, basically.”

National concern

The lack of disclosure of a most basic fact — how much does it cost? — has prompted a movement around the country for greater price transparency, even as insurance companies and hospitals say revealing those rates will put them at a financial disadvantage with competitors.

A hospital chief executive, Steve Sonenreich of Mount Sinai Medical Center in Miami Beach, even made a public pledge on local radio last year that he would reveal the contractual rates the hospital charges private insurers — only to learn that he was barred under the nondisclosure agreement in the contract.

Sonenreich said in a written statement this week he believes one of the problems with pricing secrecy is that it allows large hospital systems to leverage their “geographic dominance” to run up rates on insurers, who pass on the increases to employers and consumers through higher premiums, deductibles and other costs.

“If we make health care pricing information available to consumers, particularly employers,” he said, “they will be able to make better decisions.”

Divided pressure

But the push for price transparency has had an uneven impact across the country.

Some states, such as Colorado, New Hampshire and Massachusetts, have adopted legislation that requires insurance companies and health care providers to report reimbursement rates and payments for use in what they call an “all-payer claims database” — a repository of comprehensive information on health care use and payments for all medical services by Medicaid, Medicare and commercial insurers, among others.

Florida has enacted or amended statutes and regulations more than a dozen times since 1985 requiring some level of transparency and disclosure from hospitals and physicians, but not insurers.

Left in the dark

By keeping prices secret, health care providers and insurers leave employers with little choice for managing their benefits costs as they go up. Most choose to shift more financial burden onto employees, said Francois de Brantes, executive director of Health Care Incentives Improvement Institute, a Connecticut nonprofit that advocates for payment reform.

“If you’re an employer,” de Brantes said, “and you don’t have access to your underlying claims data, even though you’re self-insured, there’s absolutely no way for you to make decisions on benefit design — other than using the brute force of across-the-board premium increases.”

For most people with employer-provided health insurance, rising premiums are not unusual. Insured consumers across the country are shouldering more financial responsibility for their medical care through high deductibles, co-insurance rates and health savings accounts — fueling momentum for price transparency.

Not so simple

But translating health care pricing to into useful information for consumers is complicated because every patient’s experience can be different, even for similar procedures, said Linda Quick, president of the South Florida Hospital and Healthcare Association, a trade group for providers.

Then there’s the variety of payers, from government programs such as Medicaid and Medicare, to private commercial insurers — all paying different rates.

Adding to the complexity: A procedure such as a knee replacement may require that an insurer pay a number of different providers.

“So if the hospital told you that their cost is $27,000,” Quick said, “it’s still not a true representation of the cost of knee surgery, because the surgeon’s bill is going to be separate, and the anesthesiologist is going to bill separately.”

For employers, having access to data on actual payments would be much more useful than knowing the average discount negotiated by a plan administrator, de Brantes said.

When he worked as a program leader for General Electric Corporate Health Care Programs in the mid-1990s, de Brantes said, GE required its health plan administrator to deliver the data — or lose the company’s business.

“We would use that data constantly to figure out: What do we need to do as an employer to improve cost and quality? Where are there problems? And even to do accurate modeling of what would be the impact of, say, increasing our copay on ER visits,” de Brantes said. “How many people would that impact? And who’s going there more often? Is it people who have chronic illness, or those seeking routine service?

Other large private employers, such as aerospace giant Boeing, negotiate contracts directly with hospitals and other health care providers, said Joe Smith, a physician and engineer who chairs the board of West Health Policy Center, a Washington-based nonprofit that studies health care reform.

“Health care has enough middlemen,” Smith said of plan administrators. “The employers are not ignorant of this. They’re good at negotiating contracts and can also use market power to gain information.”