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Medical Care

Title: President Trump's Health Care Price Transparency Rules and Their Impact

2024-12-19

During his first administration in 2019, President Donald Trump took a significant step by announcing rules mandating transparency in health care prices. This move aimed to bring about a more competitive market and potentially lead to lower costs for consumers. Some employers have been actively lobbying to enshrine these rules into law. Zach Gibson/Getty Images/Getty Images North America provides visual context to this important development. It seemed straightforward - require hospitals and insurers to post their negotiated prices for most health care services, and competition would follow, resulting in lower costs. However, nearly four years after the first Trump administration's regulations forced hospitals to post massive amounts of pricing information online, the actual effect on patients' costs remains unclear. Even though President Joe Biden added requirements to make the pricing information more user-friendly, Donald Trump's imminent return to the White House has raised questions about the future of these regulations. The uncertainty has led some proponents to lobby Congress to include hospital and insurer price transparency in must-pass legislation before Trump takes office. This would ensure that both his and Biden's regulations become law and are less likely to be weakened or repealed by a future administration. But this effort failed this week.The legislative step could have also provided protection against legal challenges in the wake of a Supreme Court decision that limited government agencies' regulatory authority. Employers are using the transparency data to try to slow the growth of their health care costs. As James Gelfand, president and CEO of the ERISA Industry Committee, which represents large employers financing their own health plans, said, "The last thing you want to do is start over." His group is among the organizations still pressing Congress to act next year. "Congress' failure to act is deeply disappointing, but employers and other advocates will redouble our efforts. This will get done."While there are reports that many hospitals are not fully complying with transparency rules, federal regulators have sent thousands of warning letters to hospitals and fined just over a dozen. The rules require hospitals to list the prices they accept from all insurers for thousands of items and services, ranging from stitches to delivery room costs to X-rays. For consumers, hospitals must also provide a list of 300 "shoppable" services, including bundled prices for common services like having a baby or getting a hip replacement. Insurers in July 2022 were similarly required to list their negotiated prices for various care settings, including hospitals, surgery centers, imaging facilities, laboratories, and doctors' offices.This is a massive and often confusing amount of data that has attracted the interest of researchers and commercial outlets like Turquoise Health. Turquoise Health has sought to organize the information to better assist ordinary consumers in shopping for medical services or employers in overseeing workers' health plans. The data shows a significant variation in prices, both in what hospitals charge and what insurers pay, for the same services. But the impact of making these prices public is still difficult to quantify.A recent study by Turquoise looked at negotiated rates in the nation's 10 largest metro areas for a set of common health care services. It found that rates in the top quarter tier - the most expensive category - declined by 6.3% from December 2021 to June 2024, during the time the transparency rules were in place. However, negotiated rates for the lowest-cost tier of services rose by 3.4%. This may indicate that hospitals and insurers, who can now see what their rivals are charging and paying, have either cut prices or demanded better rates, at least for the costliest services.Even so, Gerard Anderson, who oversees research into the data as a professor at the Bloomberg School of Public Health at Johns Hopkins University, said the changes noted by Turquoise were small and do not reflect what his team has seen in their own studies. "So far we have not detected any impact of this data on behavior, of where insurers decide to go or what hospitals do to change prices once they realize what others are charging," Anderson said.Some health policy experts think it is unlikely that the incoming Trump administration would reverse its prior commitment to price transparency. Joe Wisniewski, an associate vice president at Turquoise Health, said, "I don't see a world where he tanks his own regulations. There is also so much broad bipartisan support on the Hill."The current price-posting rules began with requirements in the Affordable Care Act, which the initial Trump administration further defined. The hospital industry failed in a legal challenge to block these rules, and the Trump-era requirements became effective in January 2021. But even after the Biden administration made the data more user-friendly, it is still not very helpful to consumers, according to Anderson. "This data is not telling them the price they will pay. It's telling them the average price people paid last month or last quarter for a similar type of service."More useful, according to Anderson and other experts, are the requirements in the price transparency rules that demand insurers offer online calculators for hundreds of nonemergency services. The detailed cost estimates must take into account how much patients have paid toward annual deductibles. For uninsured consumers or those without access to online calculators, it remains difficult to piece together how much a service might cost from the information hospitals post online. For one thing, not every hospital has posted its negotiated rates.The Department of Health and Human Services' inspector general said in November that an audit of 100 hospitals found that 63 complied with the price transparency rule, while the rest failed to meet one or more requirements. The advocacy group Patient Rights Advocate, which looked at a sample of 2,000 hospitals, says that only 21% were fully compliant, although it used broader measures for compliance than the inspector general. "By keeping their prices hidden, hospitals continue to block American consumers from their right to compare prices and protect themselves from overcharges," said Cynthia Fisher, founder and chairman of the group, which has called for stricter rules and enforcement.KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF.

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