Research Summary

Hospital price transparency compliance dropped from 34.5 percent in February 2024 to just 21.1 percent by November, even as 61 percent of Americans report receiving surprise medical bills. But along the US-Mexico border, patients have pioneered a solution that challenges everything we think we know about healthcare pricing.

Kelli Frias, Associate Professor at American University's Kogod School of Business, has spent years studying how border residents navigate healthcare systems on both sides of the international boundary. Her research reveals a striking contrast: while US patients often wait months to discover the true cost of care, border communities have developed sophisticated strategies for obtaining upfront pricing—by crossing into Mexico.

The Price Transparency Crisis in American Healthcare

The problem extends far beyond the border. Despite federal requirements since 2021 mandating that hospitals post their prices, only 17 percent of hospitals reviewed in 2024 provided usable, dollars-and-cents pricing data. The result? Half of American adults say they couldn't afford an unexpected $1,000 medical bill they thought would be covered by insurance.

"In the US, we really struggle with identifying how much something's going to cost and how many kinds of visits I might have to endure if I have, let's say, knee pain," Dr. Frias explains. "And I don't know how I'm going to resolve that."

This uncertainty creates a cascade of financial anxiety. Two-thirds of Americans worry about affording unexpected medical bills for themselves or family members. The average surprise bill totals $520, but for many patients, the costs run into thousands—and the final amount often remains unknown for three to four months after receiving care.

What Border Communities Figured Out

Dr. Frias's research team accompanied border residents as they crossed into Mexico for healthcare, observing something remarkable: complete price transparency at the point of care.

"In Mexico, I can walk into a provider and we did," she notes. "The very nice part about walking into a clinic is the prices are often posted on the wall. And so a visit might be $2, US dollars. And I know that upfront."

The contrast is stark. A recent analysis found that approximately 1 million California adults use medical, dental, or prescription services in Mexico annually. These aren't uninsured patients making desperate choices—Dr. Frias's research specifically focused on insured Americans, including teachers, police officers, and healthcare workers with what should be considered "good benefits."

The Real Innovation: Certainty Over Uncertainty

What makes the border healthcare model work isn't just lower prices—it's predictability. Patients know exactly what they'll pay before receiving care, eliminating the financial anxiety that plagues US healthcare consumers.

"If I have, let's say a need for an MRI or I have an x-ray need, the provider is also going to tell me that upfront," Dr. Frias explains. "So it's a cash-based system."

This certainty enables something impossible in the US healthcare system: strategic healthcare planning. Families can budget for care, compare actual costs across providers, and make informed decisions without gambling on surprise bills months later.

The Business Case for True Transparency

Analysis suggests healthcare price transparency, if fully implemented, could generate $80 billion in savings for consumers, employers, and insurers. More recent research indicates employers could reduce healthcare costs by 27 percent across 500 common services with proper transparency tools.

Yet compliance continues to decline. Why? The current system benefits from opacity. When arbitration resolves out-of-network disputes, payouts average at least 3.7 times what Medicare would pay—creating perverse incentives against transparency.

Connecting to Sustainable Business Practices

This border healthcare phenomenon connects directly to broader questions about sustainable business models and innovation under constraint. Border residents have essentially created a dual-market healthcare system, demonstrating remarkable "cultural health capital"—the knowledge, skills, and capabilities to navigate complex systems efficiently.

From a business strategy perspective, these consumers exemplify the kind of informed decision-making that market-based healthcare theoretically should encourage. They know exact prices, can compare quality indicators, and make strategic choices about where to receive care—all capabilities that remain largely impossible for most American healthcare consumers.

What Business Leaders Can Learn

The implications extend beyond healthcare. Dr. Frias's research demonstrates what happens when consumers gain true transparency: they become strategic shoppers who optimize across available options rather than remaining captive to opaque pricing structures.

Several lessons emerge for business leaders:

• Price certainty drives engagement. When consumers know exact costs upfront, they actively participate in decision-making rather than avoiding care due to financial uncertainty.
• Transparency creates market competition. Border clinics compete on both price and quality because information asymmetry doesn't protect high-cost providers.
• Cultural capital matters. The knowledge systems border communities developed to navigate dual healthcare markets represent valuable innovation born from necessity—the kind of grassroots problem-solving that formal healthcare reform has failed to achieve.

The Path Forward

President Trump's executive order on healthcare price transparency (February 2025) emphasizes requiring "actual prices of items and services, not estimates" and standardizing pricing information for easy comparison. The question remains whether enforcement will follow rhetoric.

Border communities already demonstrate that this level of transparency is possible. Patients who walk into Mexican clinics see posted prices and receive immediate cost quotes for procedures. The infrastructure exists—it's political will and institutional resistance that prevent similar transparency in US healthcare.

A Final Consideration

Dr. Frias notes a critical point about healthcare uncertainty: "We all know we may go in and see our physician and they send us for labs and send us for a scan. And it may be three or four months before I figure out how much all of this is going to cost."

That three-to-four-month financial limbo represents a fundamental market failure. In what other industry do consumers receive services without knowing—or even having the ability to discover—what they'll ultimately pay?

Border residents solved this problem through innovation and necessity. The question for healthcare leaders, policymakers, and business executives is whether we'll learn from their example or continue accepting opacity as inevitable.