Trump Signs Executive Order to Boost Healthcare Price Transparency
On Tuesday, U.S. President Donald Trump signed an executive order aimed at increasing transparency in healthcare costs by directing federal agencies to enforce a 2019 order he signed during his first term. The new directive tasks the Departments of Treasury, Labor, and Health and Human Services with developing a plan within 90 days to enforce the 2019 executive order, which mandates that health insurers and hospitals disclose detailed pricing information for healthcare services.
The order calls for the publication of actual prices (rather than estimates), updates to existing guidelines, or the creation of new regulations to ensure standardized pricing information. It also includes the development of enforcement mechanisms to ensure compliance. “You’re not allowed to even talk about it when you’re going to a hospital or see a doctor. And this allows you to go out and talk about it,” Trump stated while signing the order. “It’s been unpopular in some circles because people make less money, but it’s great for the patient.”
Trump’s 2019 order required hospitals to display pricing for up to 300 commonly used services in an easy-to-understand format. It also required hospitals to provide a machine-readable file containing the negotiated rates for all services they offer. Health plans were instructed to disclose their negotiated rates with providers, out-of-network payments, and the actual prices they or their pharmacy benefit managers pay for prescriptions, as well as to provide an online tool where consumers could access this pricing information.
The initiative faced significant opposition from hospital groups, who challenged it in court. They argued that it forced them to reveal confidential negotiation details with insurers, harming competition and violating their First Amendment rights. However, the court ruled against their claims.
Benefits of Price Transparency
Price transparency offers numerous benefits for patients, allowing them to make more informed choices about their healthcare. With access to clear pricing, patients can compare costs and choose services that fit their budgets, potentially lowering out-of-pocket expenses. This transparency fosters competition among healthcare providers and insurers, which could help reduce overall healthcare costs. It also helps patients avoid unexpected medical bills and better manage their healthcare budgets. Additionally, price transparency could encourage higher-quality care, as providers may be incentivized to improve both their pricing and services to stay competitive. For insurers, clearer pricing can lead to more effective negotiations with providers, benefiting both consumers and the broader healthcare system.
