In a move that might help push down some of the costs of healthcare, President Trump signed a new executive order yesterday afternoon. In it, he called for hospitals and doctor offices to be more transparent about their prices. The goal is to give patients the opportunity to shop around. If they can compare prices, it might impact where they go to receive care.
Allowing for consumers to shop around, in turn, drives down the market cost. Currently, if you needed an emergency room visit, the costs are hidden from view. You don’t know what you’re getting into until later when you receive the crazy bill. This gives hospitals a marketing advantage as they don’t feel the need to compete with other hospitals. Now they do, which will ultimately help to drive down costs.
“Hospitals will be required to publish prices that reflect what people pay for services,” said President Trump at a White House event. “You will get great pricing. Prices will come down by numbers that you wouldn’t believe. The cost of healthcare will go way, way down.”
Giving Patients Control
Businessman-turned-president understands a thing or two about competition and how to drive down costs. Yet, this executive order doesn’t tell the hospitals how it should be done. In fact, it simply directs the Department of Health and Human Services to start putting together a new policy that hospitals will later be forced to follow.
“The president knows the best way to lower costs in health care is to put patients in control by increasing choice and competition,” HHS Secretary Alex Azar said at a phone briefing for reporters Monday morning. The new rule should also “require health care providers and insurers to provide patients with information about the out-of-pocket costs they’ll face before they receive health care services,” he added.
“Today patients don’t have access to prices or choices or even ability to see quality,” said Cynthia Fisher, founder of a group called Patient Rights Advocate. “I think the exciting part of this executive order is the President and administration are really moving to put the patient in the driver’s seat and be empowered for the first time with knowledge and information.”
New Rules to Be Determined
Again, it’s unknown what rules will be written in this regard, but it’s expected to help drive down costs in five unique ways. Those ways haven’t been revealed yet, but it’s the most comprehensive package designed to lower healthcare costs, much to the frustration of the healthcare industry as a whole.
In fact, the healthcare industry is saying these changes will have the opposite effect and push prices higher.
“Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients, and taxpayers,” said Matt Eyles, CEO of America’s Health Insurance Plans in a statement. He says it will perpetuate “the old days of the American health care system paying for volume over value. We know that is a formula for higher costs and worse care for everyone.”
“I’m skeptical that disclosure of health care prices will drive prices down, and could even increase prices once hospitals and doctors know what their competitors down the street are getting paid,” said Larry Levitt, senior vice president for health reform the Kaiser Family Foundation, in a tweet.
