Health care industry resists White House proposal for pricing transparency |
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Health care industry resists White House proposal for pricing transparency

The Washington Post

WASHINGTON — President Trump is preparing to issue an executive order to foster greater price transparency across a broad swath of the health care industry while consumer concerns about their costs for medical treatment emerge as a major issue in the leadup to next year’s presidential election.

The most far-reaching element favored by the White House aides developing the order would require insurers and hospitals to disclose for the first time the discounted rates they negotiate for services, according to health care lobbyists and policy experts familiar with the deliberations.

The idea has stirred such intense industry opposition, however, that it may be dropped from the final version, the sources said.

Compelling disclosure of negotiated rates “would have the ultimate anti-competitive effect,” said Tom Nickels, the American Hospital Association’s executive vice president for government relations and public policy. I know they are aware of the concerns.”

Other parts of the order are expected to make it easier for people on Medicare, the federal insurance program for older and disabled Americans, to find out what they would pay for treatment at various hospitals by widening the range of services for which hospitals must post their prices.

The order also may include an effort to promote more competition among hospitals by slowing a trend toward consolidation, according to an administration official who spoke on the condition of anonymity about details that continue to take shape.

“We’re still ironing it out,” the official said.

The executive order, likely to be announced by mid-June and first reported by The Wall Street Journal, would carry the force of law but not bring about immediate change. Such orders essentially direct federal agencies to rewrite rules to advance their goals — in this instance, the Departments of Health and Human Services, Labor and Justice, according to people familiar with the White House’s plans.

The order reflects a conservative conception of how to tame rising health care costs, relying on competition — the idea that consumers will make prudent, price-minded choices if they are given enough information and options about where to get their care. Critics say patients are seldom in position to comparison shop, following their doctors’ recommendations or confronting medical emergencies.

With surveys showing that voters trust Democrats significantly more than Republicans to solve problems in the health care system, the order is, in part, a White House strategy for his reelection campaign to portray Trump as an ally of medical consumers.

“My understanding is they are trying to figure out what is going to have high splash value,” said Dan Mendelson, founder of Avalere Health, a Washington-based consulting firm.

The order also is a response to voters’ escalating concern about the growing burden of out-of-pocket health care costs.

The executive order would be the third one Trump has issued on health care during his nearly 2 1/2 years in office. Hours after his inauguration, he signed an order giving agencies broad powers to undo regulations the Obama administration had created under the Affordable Care Act. In October 2017, Trump signed another executive order intended to bypass rules under that law, by making it easier for individuals and small businesses to buy alternative insurance with lower prices, skimpier coverage and fewer consumer protections.

Unlike the first two, the upcoming order would be the first on a theme embraced by both political parties.

Republicans and Democrats alike have introduced nearly two dozen bills related to transparency this year, and two major bills are in draft form. Most are focused on curbing the price of prescription drugs, and others are designed to protect patients from what have been termed “surprise” hospital bills involving treatment by physicians outside their insurance networks.

The administration official said the executive order would focus on urging hospitals to increase price transparency for consumers, but the official did not specify how far the policy will go.

The work is being directed by Joe Grogan, director of the White House’s Domestic Policy Council, although senior HHS officials are heavily involved, according to several people who have had conversations with those involved.

The hospital industry has been consulted by the White House, according to one industry lobbyist. But an insurance industry official said the White House has not reached out to health insurers and has “declined to discuss its thinking on an executive order when asked by industry representatives.”

Hospitals and insurers are vehemently opposed to being told they need to disclose the rates that they negotiate with one another.

“There is good transparency and bad transparency,” said Kristine Grow, spokeswoman for America’s Health Insurance Plans, an industry trade group. “Good transparency provides consumers with information they can use to make their own smart decision, and causes health care prices to go down for everyone.

“This is bad transparency, because it is highly likely to cause prices to go up for everyone,” Grow said. If all the parties need to expose what rates they were willing to accept, she said, “it creates a floor for negotiations, not a ceiling.”

Nickels of the American Hospital Association said, “In order for entities in any sector of the economy, health care included, to be able to create a situation where there is give and take, there has to be some privacy.”

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