President Trump signed an executive order on Monday intended to give Americans more information about the cost and quality of health-care services to help them comparison shop before they get care.
The order is pegged to the gathering momentum of the 2020 election in which voters are eager for political leaders to lower what they pay for care. It is based on the idea, in fashion lately with both Republicans and Democrats, that greater transparency in hospital and other health-care prices will lead consumers to make better choices about where to get care and thus will save money.
“No Americans should be blindsided by bills for medical services they never agreed to in advance,” the president said in a signing ceremony in the White House’s grand foyer. “We are fundamentally changing the nature of the health-care marketplace . . . This is a truly big action. People have no idea how big it is. Some people say bigger than health care itself.”
The most contentious part of the order requires health officials to propose a regulation within 60 days that would eventually require hospitals and doctors employed by hospitals to post their charges — including disclosing for the first time the discounted rates they negotiate with insurers.
As administration officials worked on the executive order, hospitals and insurers complained about the prospect of being forced to share the results of these secret negotiations, predicting that would destroy competition among health-care institutions and insurers and have the perverse effect of driving up prices.
The order itself does not immediately trigger changes in the health-care system. But it sets in motion several new rules HHS and other federal agencies will write and gives Trump a set of pro-consumer talking points in the first week after he formally announced his reelection campaign.
In a media briefing before Trump signed the order, senior administration officials said they had not decided how much detail would be required about the negotiated rates and that such fine print would be left to the Department of Health and Human Services, which is instructed to write new rules to carry out this and other aspects of the order.
The executive order is the third relating to health care during Trump’s time in the White House. The first, issued hours after he took office, instructed agencies to look for ways to lessen regulations the Obama administration had written under the Affordable Care Act. The second, in October 2017, directed officials to foster inexpensive types of insurance allowed to skirt the ACA’s required benefits and consumer protections.
Anticipating protests from the hospital and insurance industries about disclosing negotiated rates, a senior administration official, talking to reporters on the condition of anonymity, said the executive order “leaves room for us to . . . work with industry” to decide the level of detail that is required to be made public.
The official also said such negotiated rates already are routinely included in explanation-of-benefit notices insurers send customers following a hospitalization. “We are saying you have the right to have an estimate of the information before you get the service . . . rather than after the fact when it does you no darn good.”
Tom Nickels, the American Hospital Association’s executive vice president for government relations and public policy, said the order’s language “is pretty vague” about publicizing negotiated rates. “Prices in the aggregate, prices for individual patients, prices for individual services, prices for geographic areas?
Charles N. “Chip” Kahn III, president of the Federation for American Hospitals, said the health-care industry “should be doing everything we can” to provide timely, useful information to help consumers make sound health-care decisions. “On the other hand, if it swerves and calls for the publication of health-care pricing data information that may lead to more spending, that’s a problem,” he said. “It is still an open question what the government will require here.”
Matt Eyles, president of America’s Health Insurance Plans, the industry’s main trade group, said it supports the notion that patients should have accurate, real-time information about costs so they can make informed decisions about their care. “But publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients, and taxpayers,” he said.
Eyles cited 2015 comments by the Federal Trade Commission that publicizing privately negotiated rates would disrupt health-care markets by letting competing hospitals know what their rivals were charging, which reduces their incentive to offer insurers lower rates.
Frederick Isasi, executive director of Families USA, a liberal consumer-healthy lobby, said that transparency about health care prices “is incredibly important . . . What we’re concerned about is, the administration can make an announcement about an executive order. What we want to see is, is it put into practice and does it withstand legal changes?”
HHS Secretary Alex Azar told reporters during the media briefing that another part of the order calls for the government to consider proposals to give patients more information in advance about the out-of-pocket costs they will face. Another directs the administration to draft a plan to consolidate the health-care quality data that exists for different health programs, such as Medicare and Medicaid.
One facet of the order says agencies should significantly expand the availability of government data for researchers studying ways to improve health care.
The order also instructs officials to encourage people to use health-savings accounts — an arrangement long touted by conservatives that enables people, or their employers, to put money into tax-preferred accounts for medical expenses, often used in tandem with insurance policies that have high deductibles. In addition, the order directs HHS to collaborate with other departments to curb a hospital billing problem that also has gained attention in Congress: patients saddled with unexpectedly large medical costs because they did not realize some doctors who treated them were out of their insurance network.