The
bewilderingly
opaque
nature
of
healthcare
prices
is
making
headlines
again
after
President
Donald
Trump’s
latest
executive
order,
which
aims
to
strengthen
enforcement
for
the
Centers
for
Medicare
&
Medicaid
Services’
price
transparency
requirements.
Having
read
the
order,
some
healthcare
executives
argued
that
increased
price
transparency
could
reduce
healthcare
costs
by
fostering
greater
competition,
while
others
expressed
concern
about
the
possible
effects
on
hospital-payer
negotiations,
as
well
as
the
practicality
of
enforcing
these
requirements.
The
real
question
remains:
Will
price
transparency
regulations
ultimately
empower
consumers,
or
will
it
add
layers
of
complexity
to
an
already
opaque
system?
What’s
the
aim
of
the
executive
order?
The
executive
order,
issued
on
Tuesday,
directs
the
Departments
of
the
Treasury,
Labor,
and
Health
and
Human
Services
to
“rapidly
implement
and
enforce”
the
price
transparency
regulations
that
Trump
introduced
near
the
end
of
his
first
term.
Back
in
2019,
Trump
signed
an
executive
order
aimed
at
boosting
price
transparency.
CMS
began
enforcing
price
transparency
requirements
for
hospitals
on
the
first
day
of
2021.
The
law
requires
hospitals
to
post
their
gross
charges,
payer-specific
negotiated
charges,
de-identified
minimum
negotiated
charges,
de-identified
maximum
negotiated
charges
and
cash
prices
on
their
websites
in
a
machine-readable
file.
It
also
mandates
that
hospitals
must
publish
pricing
for
the
300
most
commonly-used
services
to
their
website
in
a
consumer-friendly
manner.
In
July
of
2022,
CMS
began
requiring
payers
to
post
price
transparency
data
as
well.
The
journey
to
compliance
has
not
been
a
smooth
one.
Data
from
November
showed
that
only
21%
of
the
nation’s
hospitals
were
in
full
compliance
with
federal
price
transparency
regulations.
However,
CMS
has
fined
just
18
hospitals
for
alleged
noncompliance.
The
White
House
fact
sheet
published
along
with
Tuesday’s
executive
order
charged
that
price
transparency
regulations
were
“slow-walked”
by
the
Biden-Harris
administration
—
an
apparent
reference
to
the
low
number
of
monetary
penalties
issued
to
noncompliant
providers.
One
proponent
for
increased
price
transparency
regulation
—
Cynthia
Fisher,
founder
and
chairman
of
Patient
Rights
Advocate
—
thinks
that
the
new
executive
order
will
help
allow
price
transparency
data
to
be
communicated
in
a
way
that
is
actually
useful
for
patients
making
care
decisions.
“President
Biden
rolled
back
the
regulations
to
allow
for
estimates,
averages,
and
algorithms
—
none
of
which
can
help
patients
make
informed
decisions.
President
Trump’s
executive
order
reverses
these
rollbacks
to
require
only
actual
prices,
not
estimates.
The
order
also
calls
for
data
standardization,
which
will
allow
technology
developers
to
easily
aggregate
prices
to
make
them
actionable
for
patients,”
she
declared.
In
her
view,
the
public
availability
of
real
prices
will
“forever
transform”
the
U.S.
healthcare
system.
The
disclosure
of
real
prices
creates
a
more
functional,
competitive
marketplace
and
allows
consumers
to
lower
their
costs
through
choice
and
competition,
Fisher
stated.
“When
patients
can
see
that
the
fair
market
price
for
a
colonoscopy
is
$1,000,
they
would
refuse
to
go
to
a
hospital
charging
$12,000,”
she
explained.
Without
the
ability
to
view
upfront
prices,
purchasers
of
care
—
patients,
taxpayers,
employers
and
unions
—
have
no
remedy
or
recourse
for
overcharges,
hidden
fees
and
surprise
medical
bills,
Fisher
added.
This
opacity
has
allowed
healthcare
costs
and
insurance
premiums
to
skyrocket,
and
medical
debt
collections
to
soar,
she
declared.
With
real
prices
available,
patients
can
better
compare
prices
and
determine
where
they
are
being
overcharged.
Price
transparency
also
empowers
employers
and
unions
to
design
better
benefits
plans
that
lower
costs
and
protect
from
overcharges,
Fisher
added.
She
pointed
out
that
the
executive
order’s
main
goal
seems
to
be
to
crack
down
on
enforcement
after
the
previous
presidential
administration
issued
just
18
civil
monetary
penalties
in
four
years.
“In
this
bold
executive
order
which
increases
enforcement,
President
Trump
is
putting
the
healthcare
industry
on
notice
that
the
rules
will
be
robustly
enforced,”
she
stated.
“Enforcement
has
proven
to
work
—
when
two
Georgia
hospitals
were
penalized
for
noncompliance,
they
swiftly
came
into
full
compliance
by
posting
exemplary
files.”
Will
compliance
improve?
Another
healthcare
industry
executive
—
Joe
Wisniewski,
the
assistant
vice
president
of
channel
partnerships
and
government
affairs
at
price
transparency
software
startup
Turquoise
Health
—
agreed
that
greater
transparency
could
lead
to
lower
healthcare
costs
for
patients.
“With
transparency,
we
can
scrutinize
the
healthcare
economy
like
we
might
in
any
other
industry.
When
all
the
prices
are
revealed,
natural
market
forces
can
take
effect,
ultimately
driving
costs
down
to
a
true
fair
market
rate
for
an
item
or
service,”
he
remarked.
He
also
noted
that
further
guidance
and
enforcement
action
from
CMS
would
be
welcome
—
given
it
isn’t
clear
how
compliance
is
going
to
continue
playing
out.
“We
believe
those
who
have
been
making
a
good
faith
effort
to
comply
will
face
minimal
new
challenges,
whereas
those
who
have
not,
will
find
themselves
under
pressure
to
quickly
comply
with
years
of
phased
requirements,”
Wisniewski
stated.
Historically,
payers’
price
transparency
requirements
have
been
enforced
by
the
state,
he
pointed
out.
Under
this
new
executive
order,
the
Trump
administration
lays
the
groundwork
for
CMS
to
potentially
assume
this
responsibility
and
deliver
the
first
warnings
to
payers
since
enforcement
began
in
2022,
Wisniewski
said.
Payers
that
have
been
dragging
their
feet
will
find
themselves
needing
to
quickly
adapt
to
years’
worth
of
requirements,
or
they
might
begin
to
face
hefty
fines,
he
added.
The
same
can
be
said
for
providers,
which
have
struggled
to
meet
CMS’
requirements,
noted
Ben
Maisano,
head
of
strategy
at
Tendo,
a
healthcare
platform
seeking
to
simplify
patients’
care
journeys.
He
said
hospitals
probably
won’t
be
able
to
go
about
compliance
in
the
slow,
haphazard
way
they
have
in
the
past,
should
this
order
succeed
in
increasing
CMS
enforcement.
Before
Tendo,
Maisano
held
C-suite
roles
at
Mount
Sinai
Health
System
and
Atlantic
Health
System.
“With
health
systems,
I
think
they
know
they
have
[comply]
and
they
have
to
do
right
by
the
patient,
and
they
also
already
kind
of
do
cash
rates
for
people
who
don’t
have
insurance.
But
it’s
not
easy
for
health
systems
to
do
these
things.
Sometimes
they’re
not
technologists,
and
they
don’t
always
have
the
right
tools,”
Maisano
explained.
However,
he
is
optimistic
that
increasing
the
amount
of
publicly
available
pricing
data
is
a
good
thing
—
as
this
will
allow
tech
companies
to
step
in
and
partner
with
providers
to
create
tools
that
simplify
pricing
for
patients.
In
other
words,
the
more
healthcare
pricing
information
is
publicly
available,
the
more
companies
like
Tendo
and
Turquoise
can
develop
tools
that
truly
empower
patients.
Hospitals
are
bogged
down
with
responsibilities
related
to
patient
care
and
facility
operations
—
they
can’t
be
expected
to
translate
complex
billing
information
into
easy-to-understand
costs
all
on
their
own,
Maisano
noted.
Is
healthcare
shopability
attainable?
One
expert
—
Hal
Andrews,
CEO
of
market
research
firm
Trilliant
Health
—
thinks
that
hospital
compliance
is
better
than
reported.
The
reported
non-compliance
rates
often
come
from
advocacy
groups
or
regulatory
bodies,
which
may
use
strict
criteria.
In
his
view,
hospitals
are
probably
meeting
the
requirements
in
ways
that
aren’t
easily
captured
or
assessed.
“The
real
issue
for
hospital
price
transparency
isn’t
compliance,
but
the
challenge
of
consumers
understanding
medical
coding
language
to
search
the
data
for
a
specific
procedure
coupled
with
the
challenge
of
comparing
multiple
hospitals
for
the
same
procedure,”
Andrews
explained.
This
underscores
the
need
for
tech
companies
to
step
in
and
create
solutions
that
make
healthcare
services
truly
shoppable.
Andrews
isn’t
convinced
that
this
will
solve
the
problem
of
opaque
pricing
in
healthcare,
though.
To
achieve
lower
healthcare
costs
for
patients,
two
things
must
happen.
First,
pricing
data
must
become
transparent,
and
second,
consumers
must
be
able
to
easily
access
and
understand
this
information,
Andrews
explained.
“The
current
White
House
administration
is
clearly
focused
on
the
former,
but
they
can
do
nothing
to
mandate
the
latter,
since
neither
providers
nor
payers
have
a
provider
directory
to
reveal
the
entire
landscape
of
options
for
a
particular
service
in
a
market,”
he
declared.
To
Andrews,
the
key
issue
is
the
lack
of
comprehensive
directories
for
specific
geographic
regions.
Such
directories
could
show
which
providers
offer
a
given
service,
at
what
price,
and
under
what
circumstances.
Without
such
a
directory,
patients
can’t
compare
prices
easily.
Even
if
hospitals
and
payers
publish
prices,
patients
might
not
be
able
to
see
all
the
options
available
in
their
area
for
a
particular
procedure
or
treatment.
With
an
incomplete
market
view,
it’s
difficult
for
patients,
or
even
employers,
to
obtain
a
complete
and
accurate
picture
of
where
to
go
for
the
best
price
or
value,
Andrews
remarked.
Healthcare
leaders
should
look
to
the
airline
industry
for
an
example
of
how
pricing
data
can
be
communicated
in
a
way
that
is
useful
for
consumer
decision
making,
he
added.
“The
best
analogy
is
the
history
of
airline
pricing.
American
Airlines
was
the
first
to
gather
the
pricing
information
in
its
SABRE
[Semi-Automated
Business
Research
Environment]
system.
Over
time,
the
transparency
of
the
SABRE
data
allowed
aggregators
like
Expedia,
Priceline
and
Kayak
to
provide
a
consumer-friendly
user
interface,
which
then
prompted
the
airlines
to
develop
more
consumer-friendly
websites,”
Andrews
explained.
More
importantly,
each
airline
incorporated
technology
to
understand
changes
in
prices
at
the
market
and
route
level
—
and
this
allowed
them
to
respond
in
real
time
to
a
competitor’s
price
changes,
he
pointed
out.
“Because
the
consumer
is
downstream
of
the
contract
negotiation
between
providers
and
payers,
healthcare
will
never
have
price
elasticity
like
airlines,
but
there
is
a
path
for
consumers
to
understand
their
options
much
better
than
they
do
now,”
Andrews
stated.
How
might
price
transparency
impact
provider-payer
negotiations?
In
addition
to
empowering
consumers,
increased
price
transparency
may
also
significantly
reshape
the
provider-payer
rate
negotiation
process
—
though
opinions
on
its
effects
are
mixed.
Maisano
of
Tendo
highlighted
concerns
from
providers
that
full
transparency
could
weaken
their
negotiating
power,
especially
if
some
of
their
competitors
fail
to
comply.
He
emphasized
that
CMS’
enforcement
must
be
consistent
across
the
industry
to
create
a
level
playing
field.
“Say
you’re
a
health
system,
and
you’re
going
to
fully
comply
and
let
it
all
out
in
the
open
—
and
someone
else
doesn’t,
but
they’re
not
going
to
get
penalized.
Well,
then
now
they
have
an
unfair
advantage
in
the
negotiation,”
Maisano
pointed
out.
Without
its
prices
disclosed,
the
noncompliant
health
system
could
undercut
the
compliant
one
by
offering
lower
rates
to
insurers
behind
closed
doors,
giving
them
a
competitive
edge.
He
also
noted
that
price
transparency
could
be
more
beneficial
if
providers
adopted
bundled
pricing
models
rather
than
just
listing
line-item
charges,
making
negotiations
more
straightforward.
Listing
the
prices
for
individual
services
—
such
as
separate
fees
for
anesthesia,
facility
use
and physician
services
—
doesn’t
give
patients
a
clear
picture
of
their
total
cost
of
care.
Instead
of
presenting
pricing
data
this
way,
Maisano
suggested
bundling
these
charges
into
one
all-inclusive
price
for
a
procedure,
as
this
would
make
it
easier
for
both
consumers
to
compare
costs
and
for
providers
and
payers
to
negotiate
straightforward
contracts.
On
the
other
hand,
Wisniewski
of
Turquoise
argued
that
greater
transparency
and
standardization
could
make
contract
negotiations
less
complicated.
In
his
view,
better
transparency
and
standardized
requirements
for
both
payers
and
providers
will
result
in
simplified
contract
terms.
“These
simplified
contract
terms
open
the
door
for
a
simplified
negotiation
process
—
that
means
lower
administration
time
(and
spend)
needed
to
execute
a
single
contract
and
less
time
spent
on
revenue
recovery.
Straightforward,
transparent
contract
terms
and
rate
design
reduce
denials
and
underpayments.
Most
importantly,
they
lead
to
strong
rate
certainty
for
patients,
giving
them
hard
numbers
they
can
use
to
calculate
their
own
cost
sharing,”
Wisniewski
explained.
But
Andrews
of
Trilliant
challenged
the
assumption
that
transparency
will
drive
prices
down,
saying
that
there
is
currently
massive
variation
in
negotiated
rates
—
oftentimes
even
within
the
same
market
and
payer
contracts.
He
suggested
that
over
time,
price
transparency
should
lead
to
more
uniform
pricing
—
but
this
hasn’t
happened
yet
because
key
stakeholders
don’t
fully
grasp
the
extent
of
pricing
discrepancies.
Andrews
maintained
that
the
real
issue
is
the
widespread
variance
in
negotiated
rates
and
that
this
calls
into
question
“what
exactly
payer
networking
teams
do
all
day,”
he
added.
“The
history
of
price
transparency
in
capitalist
societies
would
predict
a
regression
to
a
mean
price
for
every
service
in
every
market,
which
has
not
yet
happened
because
no
one
—
particularly
employers
—
understands
the
massive
variance
in
negotiated
rates
for
the
same
service
from
the
same
payer
in
the
same
market,”
Andrews
remarked.
Where
do
we
go
from
here?
Going
forward,
it
will
be
difficult
to
measure
payers’
compliance
with
price
transparency
regulations,
Andrews
pointed
out.
Because
of
this,
employers
will
be
a
key
part
of
ensuring
transparency
works
in
practice
because
they
are
in
a
position
to
demand
better
data
from
their
insurers
and
brokers.
“Most
federal
agencies
cannot
even
access
the
files,
and
those
that
can
don’t
have
a
provider
directory
to
determine
whether
accurate
rates
are
posted
for
each
provider.
As
a
result,
employers
are
the
real
‘forcing
function’
to
make
price
transparency
effective,
and
they
must
require
their
carriers
and
brokers
to
develop
benefit
plans
that
deliver
value
for
money,
which
exists
at
the
intersection
of
the
quality
and
negotiated
rate
for
a
specific
service,”
Andrews
explained.
Another
healthcare
executive
also
noted
that
employers
struggle
to
select
health
plans
that
provide
workers
with
accessible
benefits
in
a
transparent
model.
Alan
Cohen
—
chief
product
officer
at
Centivo,
a
health
plan
that
only
sells
to
self-funded
employers
—
said
that
employers
need
to
establish
strong
provider
networks
and
pair
them
with
transparent,
copay-based
plans.
“When
employers
can
ensure
transparency,
their
members
can
make
more
informed
decisions,
better
anticipate
costs,
and
feel
empowered
over
their
health.
But
without
employers
putting
a
strategy
in
place,
this
data
isn’t
useful
to
the
average
person,”
Cohen
stated.
It’s
clear
that
the
true
success
of
price
transparency
measures
depends
on
how
well
various
stakeholders
—
namely
providers,
payers
and
employers
—
adapt
to
the
rules.
Transparency
could
lower
costs
and
improve
decision
making
for
consumers
across
the
nation,
but
only
if
the
data
is
accurate
and
user-friendly.
For
now,
it
appears
that
employers
are
poised
to
be
the
key
drivers
of
change,
pushing
for
more
accessible
and
transparent
health
plans.
Photo:
sinemaslow,
Getty
Images