While Trump’s batting average on policy moves that actually benefit the majority of Americans may be well below the Mendoza line, a potential rule change that could soon be proposed by his administration could expose the actual cost of healthcare for the first time.
The Wall Street Journal reported Thursday that the Trump administration is considering a move to make hospitals publicly disclose the negotiated prices they charge insurers for their services, upending decades of industry practice and shifting decision-making power to the patient. Hospitals and insurers have long guarded specific prices closely, protecting agreements with confidentiality agreements. Though the administration requires hospitals to post sticker prices on their websites, critics have long believed these prices to be inaccurate, as insurers often bargain prices down from the original asking price. Trump’s new measure would require that hospitals charge insurers, not what they are ultimately paid by insurance companies. Once publicly available, patients and employers armed with clear comparisons could change their habits or contractual agreements, their options potentially aggregated by third-party companies with tools that allow for side-by-side comparison.
The measure, which would include penalties for noncompliance, follows a report on healthcare markets issued in December by the administration, which called for greater pricing transparency industrywide.
Hospital groups and insurers believe Trump’s possible decree could violate contract law. The American Hospital Association has opposed the move. AHA executive vice president Tom Nickels said the move “could undermine the choices available in the private market,” adding “[w]hile we support transparency, this approach misses the mark.” Industry officials, who note the hurdles to be cleared before the proposal’s enaction, point out that price transparency could push insurers to demand discounts given to rivals while doctors lower negotiated rates to lure patients away from high-priced physicians.
Chip Kahn, president of the Federation of American Hospitals, told the WSJ that the administration would be wise to requite insurers to adhere to the same level of transparency. “They’d need to bring insurers and payers into the equation,” Kahn said, “because they have the data to determine for patients what their costs should be.”
Despite the three-way battle between the White House, insurers and hospitals, one patient advocacy group praised the rule’s potential impact. Caitlin Donovan, director of outreach and public affairs for the National Patient Advocate foundation, called the rule a “huge step towards true pricing transparency.” Donovan’s group, which advocates for patients with chronic, debilitating or life-threatening conditions, told the Wall Street Journal that the rule would “allow patients to really see what their costs will be before a service—something that has rarely been possible before.”
Buried in a 700-page draft regulation released last month, the Trump administration requested public comment on whether patients should be allowed to see prices in advance of obtaining care. The proposed rule document will remain open until May 3.