Trump orders ‘radical transparency’ for health care pricing

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“Radical transparency” in prices of health care will help patients with more information and lower costs, according to the administration of President Donald J. Trump.

This week, the president issued an executive order to speed up efforts to have hospitals and health care systems publicly post prices for care. It’s a continuation of a process that began with an executive order during his first term, but stalled under the administration of President Joe Biden.

“Our goal was to give patients the knowledge they need about the real price of health care services,” Trump said in a statement. “They’ll be able to check them, compare them, go to different locations, so they can shop for the highest-quality care at the lowest cost.

President Donald J. Trump
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“And this is about high-quality care,” the president’s statement said. “You’re also looking at that. You’re looking at comparisons between talents, which is very important. And then, you’re also looking at cost. And, in some cases, you get the best doctor for the lowest cost. That’s a good thing.”

‘Rapidly enforce’

The latest order directs the U.S. Departments of the Treasury, Labor, and Health and Human Services (HHS) “to rapidly enforce” the health care price transparency regulations. While exact effects could be unclear for primary care, the administration clearly was aiming at hospitals, health systems and health insurance plans.

“The departments will ensure hospitals and insurers disclose actual prices, not estimates, and take action to make prices comparable across hospitals and insurers, including prescription drug prices,” the White House directive said. “The departments will update their enforcement policies to ensure hospitals and insurers are in compliance with requirements to make prices transparent.”

The executive order sets a 90-day window for hospitals, health systems and insurers to comply. They will be required to disclose actual prices, and the federal departments will “issue updated guidance or proposed regulatory action ensuring pricing information is standardized and easily comparable across hospitals and health plans,” according to the executive order.

Something to see here

What information would be posted? The executive order stated:

• Hospitals must maintain a consumer-friendly display of pricing information for up to 300 shoppable services and a machine-readable file with negotiated rates for every single service the hospital provides.
• Health plans will post their negotiated rates with providers as well as their out-of-network payments to providers and the actual prices they or their pharmacy benefit manager pay for prescription drugs
• Health plans will maintain a consumer-facing internet tool through which individuals can access price information.

Financial effects

The financial effects could be significant. A White House fact sheet stated that health care prices can vary widely from hospital to hospital, even in the same region. One example: A patient in Wisconsin saved $1,095 by shopping for two tests between hospitals within 30 minutes of each other.

The White House cited a study that found the price transparency rules, if fully implemented, would result in $80 billion in savings for consumers, employers and insurers by this year. Health care costs would drop an average of 27% for employers who can better shop around 500 common services, according to the administration.

Family medicine perspective

Increased price and quality transparency was one of five key policy priorities of a new Consumers First agenda by a coalition that includes the American Academy of Family Physicians (AAFP). That coalition includes Families USA, the American Benefits Council, and the Purchaser Business Group on Health.

“Primary care physicians are the backbone of our health care system, but years of underinvestment in primary care has led to poorer population health, more expensive care and worse outcomes for patients and communities,” AAFP Executive Vice President and CEO R. Shawn Martin said in a statement. “It’s imperative that Congress and the new administration focus on advancing common sense policies that meet our shared goal of improving the health of patients, including addressing consolidation, bolstering the primary care workforce, alleviating administrative burden for physicians and updating Medicare physician payment to improve access to care.”

Hospitals: Blame insurance and Big Pharma

A Foundation for Government Accountability (FGA) study noted the American Hospital Association (AHA) unsuccessfully sued HHS to block the transparency rule.

On Feb. 26, AHA issued a two-sentence statement noting the executive order. In July 2024, AHA issued a lengthier statement that noted 93.4% of hospitals met the requirement to post a machine-readable file, citing data from Turquoise Health. AHA also asked Congress to assist patients by lowering health care costs through more regulation of commercial health insurers and Big Pharma. AHA blamed those businesses as key drivers in the nation’s epidemic of patients burdened by medical debt.

“America’s hospitals and health systems — physicians, nurses and other caregivers — understand and share concerns regarding the high cost of health care and are working hard to make care more affordable by transforming the way health care is delivered in our communities,” the AHA statement said. “Real change will require an effort by everyone involved, including providers, the government, employers and individuals, device makers, drug manufacturers, insurers and other stakeholders.”

Patients get a win

The president’s executive order prompted additional response on the social media website X, formerly Twitter.

HHS Secretary Robert F. Kennedy Jr. thanked the president “for your steadfast leadership in issuing an executive order that mandates clear, accurate, and actionable healthcare pricing. This executive order will empower patients with the knowledge they need to make informed health decisions.”

The order is “a monumental move … to protect American patients with real prices, not estimates!” said a tweet from PatientRightsAdvocate.org, a nonprofit dedicated to health care price transparency. The organization also called it “a major step towards patients seeing & comparing actual prices — not estimates — before care.”

PatientRightsAdvocate.org also replied to Kennedy that “patients and prices are in good hands now that @POTUS has delivered on this monumental promise!” referring to the president of the United States.

Why the wait?

The administration had a dig for their predecessors, noting that progress on health care price transparency stalled under Biden. “Hospitals and health plans were not adequately held to account when their price transparency data was incomplete or not even posted at all,” the executive order said.

Trump first issued the executive order on the issue in June 2019. There was a provision for price transparency in the Affordable Care Act of 2010. One court ruling noted efforts to improve price transparency in 2006 under President George W. Bush.

In more recent years, health system price transparency went nowhere fast, according to the analysis by the Foundation for Government Accountability (FGA).

The U.S. Centers for Medicare & Medicaid Services was charged with enforcing the rule, but was lax, according to FGA’s analysis. By 2022, among more than 6,400 hospitals, almost two-thirds were not complying, and FGA cited another analysis that estimated up to 75% of hospitals were out of compliance.

“CMS is providing substantial deference to hospitals on price transparency requirements,” the FGA analysis said. Hospitals found in violation were given months to comply, although enforcement timelines were “wildly inconsistent,” that study said.