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Trump Executive Order to Mandate Price Transparency for Providers

As the N.Y. Times reports, more transparency is coming to provider prices.

The White House released an executive order Monday afternoon intended to require insurance companies, doctors and hospitals to give patients more information about precisely what their care will cost before they get it.

More transparency is generally good and surprise billing for out-of-network costs has been a major problem. However, health care prices are complicated. Many people already receive a “THIS IS NOT A BILL” invoice statement from providers which is totally incomprehensible. It will be important that any additional disclosure is easy for consumers to understand. Further, value-based payment means that the amount that providers receive for care may change after the fact. For instance, the Hospital Readmission Reduction Program gives hospitals financial penalties if there readmission rates are too high. Are these value-based payment adjustments to be included in the price reported? The details are left to be worked about through the rulemaking process.

As reported on NPR, Matt Eyles, the CEO of America’s Health Insurance Plans (AHIP) stated:

“Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients, and taxpayers.”

Thus, the net effect on prices paid to hospitals, physicians and others is not entirely clear.

The executive order also had some other provisions as well. As PBS NewsHour reports, these include:

  • Expanded uses for health savings accounts, a tax-advantaged way to pay health care bills that has long been favored by Republicans. Coupled with a lower-premium, high-deductible insurance plan, the accounts can be used to pay out-of-pocket costs for routine medical exams and procedures.
  • A plan to pull together the government’s various health care quality rating systems for hospitals, nursing homes, and Medicare Advantage plans, improving reporting of information to consumers.
  • More access by researchers to health care information, such as claims for services covered by government programs like Medicare. The data would be stripped of details that could identify individual patients.

As a researcher, more access to data would be a great thing. Health savings accounts have the potential to make health care more efficient in theory, but in practice (i) prices aren’t known and (ii) patients often end up foregoing care rather than using HSA to better shop around.

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