If you care about price transparency, you should care about this case.

On Wednesday morning, the Supreme Court will hear oral argument in Gobeille v. Liberty Mutual, a case that could throw a wrench in states’ efforts to shine a light on what we pay for health care. As Chris Koller and I explain in a new perspective piece at the New England Journal of Medicine:

Over the past decade, … 18 states have … created “all-payer claims databases” in which they compile information on the prices that all insurers, public and private, pay for medical care. Although the databases vary in their particulars, they all share a market-oriented goal: greater transparency with regard to the prices that drive health care spending. Depending on local policies, that transparency can serve any number of purposes. It can aid state regulators in fashioning new payment models, help researchers better understand the effects of payment and benefits policies, and enable people with high-deductible health plans to comparison shop.

In Gobeille, a self-insured employer, Liberty Mutual, has argued that it can’t be forced to report what it pays to Vermont’s all-payer claims database. Its theory is that the reporting requirement is preempted by the Employee Retirement Income Security Act. A federal appeals court agreed with Liberty Mutual, teeing up the Supreme Court case:

If the Supreme Court agrees with that analysis, employers nationwide that self-insure—in other words, pay directly for their employees’ health care rather than buying insurance—will not have to report anything to the states. Because 63% of employees nationwide receive coverage through firms that self-insure and are unlikely to voluntarily assume the burden of self-reporting, ERISA would deprive these databases of much of the data that they need.

Gobeille is a bit of a sleeper; the legal questions are too arcane to attract much attention. But the case is important. Not only does the future of these new state databases hang in the balance, but also other novel efforts to reduce costs and improve quality.That’s reason enough to root for Vermont.


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