Next year, the health care industry will see the confluence of three major price transparency policies: hospital price transparency, payer price transparency, and surprise billing. Since these policies began to emerge, Advisory Board has been researching the implications and working with leaders across the industry to prepare for a new era of "information liberation" in health care.

Last week, I sat down with three of my Advisory Board colleagues—Ben Umansky, Natalie Trebes, and Lauren Robinson—to discuss these new policies and their potential impact. If you missed the session, don't worry—you can always watch it on demand. But here are five takeaways from the discussion that highlight how industry stakeholders should be thinking about, and preparing for, this next phase in the price transparency journey.

Webinar: The price transparency trifecta

Takeaway 1: These rules are designed, in part, to move markets.

Much of the price transparency conversation to date has, rightfully, centered on the consumer. How do we give consumers access to information they can use to make informed decisions about their care? But there's another piece to this conversation: the impact on the market.

Cheat sheet: The new hospital price transparency rule

There are key parts of the price transparency and surprise billing rules that have little value to consumers and instead are designed to move wholesale markets. For example, the price transparency rules' requirements for hospitals and payers to publish machine readable files (MRFs) and previously undisclosed negotiated rates are not necessarily consumer friendly. The real push here is to enable those making choices for large groups of people—think payers, brokers, or companies looking to create a Center of Excellence—to look at these files and discover new ways to make strategic shifts that can save money.

There are several ways this could play out, and those scenarios will vary by market. Some of the most consequential scenarios to watch for are:

• A race to the bottom, in which providers with above-average rates have to defend those rates or see them pushed down to be more in line with competitors.
• A race to the top, in which the average rate for a market shifts up in line with the higher rates.
• The status quo, in which providers who operate in noncompetitive markets don't have to go through that benchmarking process.

Takeaway 2: Don't overlook the potential impact of these rules on contract negotiations.

Another way these rules may affect the marketplace is in provider-payer contract negotiations. The No Surprises Act's new independent dispute resolution process will intersect with price transparency by giving stakeholders more information about competitors' rates. And that will play a role in determining reasonable expectations for out-of-network rates and contract negotiations.

So, if providers' and payers' negotiated rates are published as the rules require, will more people bring those numbers to the negotiating table and have tough discussions about them? And how will the No Surprises Act's ban on balance billing impact negotiations on who is in network versus out of network?

Cheat sheet: Examine the No Surprises Act

There is an entire industry around payer-provider negotiations that won't disappear overnight. Factors such as market share and brand name will continue to play a big role in contract negotiations. But the new policy changes have the potential to shift the balance of power. One thing we will be watching is whether those changes move the industry toward efficiency and a more accurate market rate—or whether these become new grit in the wheel that both providers and payers must bring to the table to debate.

Takeaway 3: Quality has to be part of the negotiation conversation.

One question that the audience raised during our panel discussion is what role quality will play in these conversations. The price transparency rules will make it significantly easier for everyone (consumers, payers, providers, employers, etc.) to access pricing information, but we're not seeing a similar unveiling on the quality side. This creates the risk that pricing information may become overweighted because it's easy to access, and that could mean a push for lower costs at the expense of quality.

It's impossible to contextualize cost differences between providers without quality and outcomes information. The surprise billing rules' independent dispute resolution process does give providers an opportunity to argue in favor of higher prices—but it's unclear exactly what the bar will be for providers who charge above median in-network rates to prevail.

As more data becomes available, third-party vendors could step in and create tools that consumers have come to expect from other sectors—tools that allow consumers to compare price, quality, outcomes, etc., before making a decision. But we've routinely seen health care be resistant to this type of shopping. Without comparable pricing data and equivalent quality data, such tools could be a long way off.

Takeaway 4: Evaluate and reevaluate your exposure and preparedness.

Cheat sheet: The transparency in coverage rule

CMS next year will increase penalties for hospital price transparency non-compliance, and this new financial penalty structure has led many hospitals and health systems to reevaluate their financial risk of exposure. Providers also will need to determine how many of their out-of-network claims fall under the No Surprises Act's ban on balance billing—and how many require advanced consent.

But financial risks aren't all that is on the line when it comes to transparency. Hospitals and health systems should also consider risks to their reputation and the power of the media. The media has already been influential in this space. For example, media coverage got a subgroup of hospitals to stop hiding in HTML the links to their data, and the media also played a pivotal role in getting CMS to increase penalties for hospital price transparency noncompliance. Therefore, hospitals and health systems must have ongoing conversations about risk exposure beyond just the financial side.

Takeaway 5: It'll be a long journey, with bumps along the way.

While the new price transparency and surprise billings rules take the “information liberation” conversation to a new level, it's important to remember that this is a journey the health care industry has been on for more than a decade—and it's not going to be resolved overnight. The latest rules enact changes that require the entire industry to rethink investments and strategies it has put in place over the course of decades. That is a big disruption to the status quo—and it's being done through many policy changes that on the surface feel disconnected.

But it's helpful to think of these rules as interconnected groundwork. There are a bunch of tiny pieces that all must come together to make it possible for patients to process the information available and make good decisions about their care.

The health care industry has to do a lot of work to get there—and the "there" will look different in different markets and segments over time. We'll see data (both useful and not) enter the market. We'll see the rise of new actors who step in to try to make sense of that data. But in the end, we will hopefully  see the quality of that data improve, and market players will identify new ways to use that data. But the takeaway here is that this will be a long, and at times bumpy, journey.