As employers and their advisors alike start to use price transparency data, the question typically comes up, how does price transparency compare to UDS (or discount data)? Discounts have been around for a while, and as the saying goes, if it ain’t broke, don’t break it. But we think it might actually be broken and in need of revision. So, indulge us in raising the question:

Can price transparency really replace UDS data?

What Is Price Transparency Data?

Price transparency data is collected from federally mandated hospital and payer machine-readable files (MRFs). A whole lotta laws dictate what information must be made available, which entities must disclose their rates, how often they must disclose them, and in what format—making price transparency data an unprecedented resource in healthcare. If you’re a self-funded employer, your contracted rates are in price transparency data for the world to see. But worry not! This is a good thing. Transparent prices allow for natural market forces to take effect on the healthcare economy. Love.

Thanks to developments in regulations, price transparency data now contains everything from reimbursement structures to modifiers to algorithms and the rates themselves. How you use that data, though, is where things get realllllllly interesting.

What Is UDS Data?

But we’re getting ahead of ourselves. The status quo dataset for employers is Uniform Discount and Data Specifications (UDS). It is the typical way to analyze and assess network pricing and the average discounts networks have off of billed charges.

This dataset is a result of carriers coming together and deciding to agree to post their average discounts at a zip3 level for their commercial book of business. That means the data would look something like "Carrier A has a 43% discount in the Atlanta market.” Meaningful? Sort of…but not really.

UDS Data Is Unregulated, Outdated, and Nonspecific

UDS data has been widely accepted and adopted for the past two decades. Using UDS to evaluate networks isn’t bad, but it is The Old Way. It’s a common dataset that provides a like-like comparison between carriers.

That doesn’t mean it’s perfect. As with any type of data, there will always be some trade-offs.

The challenges of UDS data are well documented. Here are the major ones:

  • Unregulated: Who is to say UDS data is reported correctly and in a true apples-to-apples fashion? UDS is a proactive data source by carriers to provide broad discounts on their book of business. But it’s not a federally regulated data source.
  • Lack of granularity: The average discount isn’t helpful if we can’t back into areas of opportunity and where discounts may fall behind. As mentioned, UDS data is reported at the zip3 level, meaning that we can’t actually get too specific with the data.
  • Lack of provider specificity: Healthcare is local. Where someone receives care often makes a huge difference in the price paid by self-funded employers. UDS doesn’t give us specific provider information, which creates a challenge when determining which providers are best given your utilization patterns.
  • Outdated: UDS data often lags anywhere from 18 to 36 months. If you wanted to plan for 2026 or 2027 plan years, you’re going to be relying on 2022-2023 data.

Price Transparency Data Is Regulated, Up to Date, and Granular

Price transparency data has infinite applications (and we’re not just saying that because it’s what we live and breathe). You can use this data for evaluating networks, benchmarking providers, setting up centers of excellence, direct contracting, and driving care to high-quality/low-cost providers.

Price transparency really shines in the exact areas where UDS is lacking. It’s granular and can dynamically surface individual codes with provider specificity. If you’re curious about knee surgery at your local hospital compared to an ambulatory surgery center, you can look up the allowed amounts down to the penny without trying to back into a vague discount percentage.

Price transparency data is also up to date. Our whip-smart engineering teams ingest data monthly as carriers and providers comply with mandated timelines of posting MRFs. That leads me to my next point: the Centers for Medicare & Medicaid Services (CMS) mandates and enforces price transparency data. CMS regularly publishes additional guidance on schemas and checks files to ensure payers and providers are posting data. Thanks to CMS for ensuring this data is trick-free.

Prior to 2021, we did not have access to this level of granularity when it came to healthcare-negotiated rates, gross charges, or list prices (aka the data hospitals and payers are mandated to disclose). The data is as close to real time as we could ask for: payers are required to update their files monthly while hospitals are required to update their files annually. With that in mind, we only have access to exactly what hospitals and payers post. The data is new and full of untapped potential (~800TB of data parsed monthly). At Turquoise, we work hard to clean and enrich this data. As time goes on and schemas become more uniform, we’re seeing published files getting better and cleaner.

Now I know what you're already thinking: “Are carriers and hospitals really posting?” The answer is a resounding Y-E-S. At Turquoise we bring in 96% of hospitals that are required to post and 220 of 277 carriers (representing ~95% of commercial lives). Not to brag, but we have the highest-fidelity healthcare pricing dataset in the industry…soooo

Price Transparency Data Can Replace UDS Data, if You Want It To

It’s tough to say price transparency data can replace UDS data definitively. They are inherently different metrics (discount % vs. a $ negotiated price). However, many consultants and brokers are leveraging price transparency to uplevel their reprice analyses and create innovative strategies for their clients. Choosing price transparency data over UDS means choosing to leverage a whole new set of strategies for your clients. We’re obviously biased, but given the current landscape of healthcare and the increased scrutiny of fiduciary responsibility, leveraging new data sources seems like the natural evolution for brokers.

All that being said, UDS is still widely seen as the standard for evaluating networks and their prices. As with any shift, it will take years to get comfortable with a new dataset and all that price transparency has to offer.

Along with our partners, we share our courageously optimistic perspective that price transparency provides a better experience than traditional discount analyses done with UDS.

What do you think? Do you think price transparency can replace UDS data? Let us know! (Seriously, let us know)