Washington is preoccupied mostly with trivia these days, but if you scour the news you will see that important events are also taking place. Like the Trump administration’s announcement on Friday of two new rules relating to price transparency. Pretty much all non-socialists agree that price competition in medical services needs to be sharpened, and for that to happen, patients need to have skin in the game, and the wherewithal to understand and compare prices for medical services. Today, pricing practices are arcane and opaque–understood by a handful of professionals, no doubt, but obscure to the putative consumers, the patients.
Today’s rules will go a long way to change that. The Centers for Medicare & Medicaid Services press release is here:
One of the rules is the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. The second rule is the Transparency in Coverage Proposed Rule. Both the final and proposed rules require that pricing information be made publicly available.
Consistent with the Executive Order on price and quality transparency, the Trump Administration is taking action toward making sure that insured and uninsured Americans alike have the information necessary to get an accurate estimate of the cost of the healthcare services they are seeking before they receive care.
[T]he Department of Health and Human Services, the Department of Labor, and the Department of the Treasury (collectively, the Departments) are issuing a proposed rule, “Transparency in Coverage” that would require most employer-based group health plans and health insurance issuers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees up front. With this information, patients will have accurate estimates of any out-of-pocket costs they must pay to meet their plan’s deductible, co-pay, or co-insurance requirements. This will make previously unavailable price information accessible to patients and other stakeholders in a standardized way, allowing for easy comparisons.
In addition, the Administration is finalizing a rule that will require hospitals to provide patients with clear, accessible information about their “standard charges” for the items and services they provide, including through the use of standardized data elements, making it easier to shop and compare across hospitals, as well as mitigating surprises. The final rule will require hospitals to make their standard charges public in two ways beginning in 2021.
There is much more detail at the link. The bottom line is that this is a huge step toward making shopping for medical services like shopping for other products and services, like automobiles, smart phones and restaurant meals. Experience tells us that markets work, as long as consumers have the information they need to make intelligent choices.
These health care rules illustrate why it is so vitally important that President Trump be re-elected in 2020. If he serves two terms, initiatives like these will be fully implemented and become part of consumers’ expectations, and the benefits of enhanced competition will become obvious. But the Democrats don’t want our health care system to be improved. They want it to fail, so they can implement socialized medicine. Thus, if they win the presidency next year, they will be able to scuttle these and many other positive Trump administration initiatives. This is one of several reasons why the stakes in next year’s election are so high.