Trump presidential order takes aim at price transparency

President Trump signed an executive order that aims to make healthcare pricing more transparent to consumers, enabling them to better shop for medical services.

The order, signed on Monday, sets in motion a rule-making process by the Department of Health and Human Services, which is expected to flesh out the order with a notice of proposed rulemaking in the next 60 days.

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Donald Trump signs the "Improving Price and Quality Transparency in American Healthcare to Put Patients First" executive order. Photographer: Kevin Dietsch/Pool via Bloomberg

The executive order is another step by the Trump administration to give consumers more information with the intent of enabling them to exert more control over the decisions they make on where they receive care. However, healthcare organizations contend it’s unclear whether consumers will be able to make use of the information to make care decisions.

In addition to informing patients about “actual prices,” the executive order seeks to:

· Establish a health quality roadmap that aims to align and improve reporting on data and quality measures across federal programs.
· Increase access to data to make healthcare information more transparent and useful to patients, increasing access to de-identified claims data from taxpayer-funded healthcare programs and group health plans for researchers, innovators, providers, and entrepreneurs.
· Empower patients by enhancing control over healthcare resources, aiming to expand the ability of patients to select high-deductible health plans that can be used in tandem with health savings accounts.
· Address surprise medical billing, with the aim of producing a report on additional steps the administration may take to implement principles on surprise medical billing announced in May.

The text of the order suggests that increased transparency is essential in enabling patients to select the best healthcare among the options that are available to them.

“To make fully informed decisions about their healthcare, patients must know the price and quality of a good or service in advance,” the order reads. “With the predominant role that third-party payers and government programs play in the American healthcare system, however, patients often lack both access to useful price and quality information and the incentives to find low-cost, high-quality care.”

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The order suggests that current pricing approaches in healthcare are intentionally unclear, leading to uninformed and more expensive care decisions by patients. “Opaque pricing structures may benefit powerful special interest groups, such as large hospital systems and insurance companies, but they generally leave patients and taxpayers worse off than would a more transparent system,” it says.

Trump’s order sets the following time goals for making progress on price transparency:

· Within 60 days of the date of the order, the HHS secretary must propose a regulation “to require hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format.”
· Within 90 days, the secretaries of HHS, Treasury and Labor departments must issue an NPRM “to require healthcare providers, health insurance issuers and self-insured group health plans to provide or facilitate access to information about expected out-of-pocket costs for items or services to patients before they receive care.”
· Within 180 days of the order, the HHS secretary shall issue a report “describing the manners in which the federal government or the private sector are impeding healthcare price and quality transparency for patients, and providing recommendations for eliminating these impediments.”

America’s Health Insurance Plans (AHIP), the trade group representing the nation’s health insurers, say the executive order may have unintended consequences—healthcare pricing is complex, and consumers may not be able to make better decisions about their care.

The organization says publishing negotiated rates also could backfire. Matt Eyles, AHIP’s president and CEO, says releasing that information could create “a floor—not a ceiling—for the prices that hospitals would be willing to accept.”

A statement from AHIP says, “Consumers and patients can get meaningful help and a view into the costs they will pay for care through tools offered by health insurance providers, such as cost calculators. Consumers also have access to regular reports on where they are in meeting their deductibles and limits on out of pocket costs.

“The release of the executive order is just the beginning of an extended process, and we will engage collaboratively with the administration and other healthcare stakeholders to find better solutions that decrease costs for everyone without undermining quality, choice, and value for the hardworking Americans we serve,” the statement concludes.

The expectation that HHS will propose a rule will enable the industry to comment on the challenges that enacting the executive order could pose, says Rick Gundling, senior vice president at the Healthcare Financial Management Association.

“The order directs HHS to start the regulatory process and will give the industry a chance to make comments and look at different alternatives for complying with its intent,” Gundling notes. “With the regulatory process, hospitals, physicians and insurers will be able to provide their input on better practices for disclosing prices.”

Making mountains of pricing information may actually only confuse patients, he contends. Health organizations do need to do a better job in providing pricing information, but most consumers are primarily concerned with knowing their out-of-pocket expenses. And consumers often use factors other than price in making care decisions, such as how proximate treatment locations are to consumers’ homes.

“The devil is in the details for something like this,” Gundling says. HFMA “will certainly be engaged, share our guidelines and best practices around patient financial information. We’ll have to consider what the proper timing for these kinds of initiatives. Software to make it happen would have to be built.”

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