The Robert Wood Johnson Foundation has launched a competition among technology developers to improve consumer understanding and use of data that compare hospital prices. Winners of the RWJF Hospital Price Transparency Challenge will share $120,000 in prize money.

The competition was announced June Health Datapalooza IV in Washington, DC.

Last month the Centers for Medicare & Medicaid Services took the unprecedented step of publishing prices charged by more than 3,000 hospitals for the 100 most common inpatient procedures. RWJF officials note that the information showed extreme variation in pricing among U.S. hospitals – even those operating in the same communities, underscoring the need for transparency in the healthcare system.

The RWJF Hospital Price Transparency Challenge is designed to further disseminate the use of the CMS hospital data.

[See also: RWJF seeks healthcare quality app in $100K challenge.]

The competition consists of two components – one for creating visualizations of the data and another for developing consumer applications and tools. The visualization challenge requires entrants to create visual representations to help consumers and others better understand, explore and interpret the information. Applicants are encouraged to incorporate other data that can be used in combination with the hospital pricing data.

The apps and tools developed should help improve understanding of the hospital pricing information and promote further transparency about prices.

“The challenge asks technology developers to transform these data into intuitive, actionable tools,” Katherine Hempstead, senior program officer at the RWJF, said in a news release. “We hope this will spark discussion and innovation that will help further progress toward increased price transparency in healthcare.”

Winners of the visualization component of the challenge will be announced at the Health 2.0 Fall Conference next October. The deadline for submissions is August 25. The app and tools component will take place in two phases. The first phase will select five semi-finalists, who will be announced at the Health 2.0 Fall Conference. The deadline for this first phase is August 4. The second phase will select winning entries from among the semi-finalists. Winners will be announced on December 9 at the mHealth Summit. Staff from Health 2.0 and Visualizing.org will manage both challenges.

[See also: PatientsLikeMe lands $1.9M.]

This is the third competition RWJF has sponsored with Health 2.0 to seek innovative uses of healthcare data. RWJF launched the ‘Aligning Forces Challenge’ in 2011, seeking applications to make healthcare quality data more accessible, and announced the winners at the 2012 Health Datapalooza. In 2012, RWJF launched the ‘Games to Generate Data Challenge,’ currently ongoing, which asks developers to use games and gaming concepts to create health care quality data.

Information on the challenge is available here.