Today, most patients get healthcare pricing information only after they’ve visited a hospital or doctor. This often arrives in the form of an “explanation of benefits.”
After-the-fact medical billing makes it difficult, if not impossible to shop around and compare healthcare prices. Worse, it prevents patients from being able to plan and prepare for major healthcare expenses.
Fortunately, price transparency is an issue that affords some level of bipartisan support. But is it true that the Obama Administration did more to further price transparency than the Trump Administration, as Joe Biden adviser Ezekiel Emanuel recently claimed?
-Dr. Ezekiel Emanuel of the University of Pennsylvania on PBS NewsHour Sept. 8, 2020
Mostly false or misleading. Significant errors or omissions. Mostly make believe.
While the Obama Administration made an effort toward greater price transparency in Medicare and also funded some activities to produce some data on hospital charges, its major achievement in health care was signing the Affordable Care Act into law. The Affordable Care Act is the enemy of price transparency: By requiring that nearly all healthcare transactions run through insurance and limiting the use of HSAs, the Affordable Care Act effectively reduced demand for price information because it socialized the cost of health care through insurance, allowing hospitals and providers to more easily hide (and raise) prices. For one example of this, check out what happened to the price of birth control after the Affordable Care Act expanded insurance coverage of contraceptives.
For its part, the Trump Administration has made price transparency in the healthcare system one of its top priorities in the first term. In May 2018, the administration released a blueprint to increase price transparency, lower drug prices and reduce out-of-pocket costs. The plan featured four strategies: boosting competition, enhancing negotiation, creating incentives for lower list prices, and bringing down out-of-pocket costs.
Less than a year later after releasing its blueprint, the Department of Health and Human Services began putting it into action, finalizing a rule requiring drugmakers to display list prices of their drugs in TV ads, similar to the way drug companies are required to disclose any potential major side effects.
Then in June 2019, President Trump took historic action to increase price transparency and reduce healthcare costs by signing an executive order that would require hospitals and insurers to disclose their real cash prices and hidden negotiated rates.
These actions directed the Department of Health and Human Services and Centers for Medicare and Medicaid Services to develop new regulations through a lengthy rule-making process before becoming effective on Jan. 2021. Among other mandates, these regulations:
- Require hospitals to disclose prices for shoppable services as a total package in an easy-to-read, consumer-friendly format.
- Require healthcare providers and insurers to provide patients with information about the out-of-pocket costs they’ll face before they receive healthcare services.
Together, these two rules represent the most aggressive actions taken by any administration to directly increase price transparency for patients.
However, executive actions can be reversed by future administrations. And the president’s actions on price transparency are currently being challenged in court. In order to have a lasting effect, the Trump administration, with the help of Congress, must codify these changes into statutory law. The PRICE Transparency Act would achieve that.
Price transparency isn’t an end in itself; it’s the means to the end of greater choice, accountability, and affordability in health care. The Trump Administration has been a champion of this effort, more so than any other administration in U.S. history. Because of the lengthy rule-making process, many these changes have yet to be realized to their full extent. However, under the president’s new price transparency mandates, patients could soon have the ability to shop for their healthcare services—a right that nine out of ten Americans support.