Alexandra Goebel, Community Outreach Specialist
On Monday, June 24, 2019, President Trump signed an executive order requiring hospitals, providers, and insurance companies to publicly disclose their pricing structures for health care services. The purpose of the executive order is to introduce price transparency, quality care, and all-around affordability into the health care system. Trump expresses the importance of revealing this information “in a way that's clear, straightforward, and accessible to all."
“For too long it's been virtually impossible for Americans to know the real price and quality of healthcare services… With today's historic action, we are fundamentally changing the nature of the healthcare marketplace. We will empower patients with the information they need to search for the lowest cost and the highest quality care. In other words, they will be able to seek out... the doctor they want and they will be given vast amounts of information about those doctors.” - President Donald Trump
Details regarding the executive order have yet to be clearly agreed upon and defined. According to various sources they will be released over the next few months. The final regulations are responsible for the successful execution and impacts of the executive order.
Vanderbilt economist Dr. Larry Van Horn suggests this executive order will create a “Free Market” structure that will effectively reduce high costs for healthcare services. Other sources express fear that failure to regulate properly could result in overall price increases as competition between hospitals and insurance providers is disengaged.
Alex Azar, Secretary of the Department of Health & Human Services (HHS), and President Trump identify at least four components that need to be regulated effectively in order to drive positive outcomes:
- Hospitals and providers need to disclose prices in an easy-to-read format that reflect what insurers and patients actually pay for services and medications. Azar states that Patients need to be put in the center of the model, allowing them to drive toward the best health care quality and costs. “70% of in-patient services at hospitals are shoppable. 93% of outpatient services of hospitals are shoppable. We just have to empower with information.” - Alex Azar
- Information regarding the quality of doctors, hospitals, and providers needs to be made available for consumers to compare. “Currently patients do not have adequate tools to find doctors who will deliver better health outcomes at an affordable cost… Low-quality care often means unnecessary services. For example, a bad doctor may routinely perform an expensive spinal surgery for back pain without first trying physical therapy.” - President Trump
- Insurance companies need to provide price transparency. It is important to inform patients about list prices, negotiated discounts, and expected out-of-pocket expenses before they receive services and prescriptions. This aims to prevent what the President, and many others, have called “surprise medical billing”.
- Agencies need to propose a way to consolidate quality measures across all healthcare programs. This involves storing de-identified healthcare claims data. Researchers will analyze the “rich pool of big data to help systematic improvement of the healthcare system and create consumer-usable tools.” - Alex Azar
With fundamental changes to the operational structure of our healthcare system, we are entering new territory. As expected, there is already much debate surrounding this new approach. Intentions to put the consumer in the driver's seat with access to more information sounds beneficial. Nevertheless, the impact of the executive order on financial models will take more time to be revealed. As rules and regulations are disclosed by government agencies, we will gain more insight into how this strategy will be carried out by our nation's health care system.