This is an excerpt from a story delivered exclusively to Business Insider Intelligence Digital Health Briefing subscribers. To receive the full story plus other insights each morning, click here.
The Trump administration is considering a move that would require hospitals and doctors to publicly disclose the healthcare prices they secretly negotiate with payers, according to The Wall Street Journal.
The proposed rule would broadcast the amount healthcare providers charge insurance companies for treating their members, bringing more clarity to an opaque pricing model and empowering patients to check the negotiated price of a service before they pick a provider — which will likely force hospitals to compete on pricing in order to attract patients.
(AP Photo/Manuel Balce Ceneta)
Here’s what it means: Hospitals are in the crosshairs of the Trump administration’s hardline stance on transparency and will likely have to change their pricing strategy.
This latest proposal is an escalation of a Trump mandate effective January 1 that requires hospitals to post their sticker prices for standard hospital services online. However, these prices don’t account for the rates that insurers privately negotiate with providers — or how a patient’s insurance coverage impacts hospital billing — so they don’t accurately reflect the cost of care. Moreover, the US government isn’t currently moderating or enforcing hospital compliance, Health Leaders Media notes. The latest proposal takes the regulation a step further and would likely include imposing government fines on providers that fail to list their true rates. And while the proposal will undoubtedly face staunch opposition from deep-pocketed hospital lobbying groups and may trigger legal battles, the Trump administration has sent a clear signal that it plans to push hospitals toward transparency.
The bigger picture: The proposed policy could force hospitals and doctors to engage in a pricing war in order to compete for patients.
Unlocking hospital pricing data would likely lead to the creation of cost transparency apps, putting more healthcare shopping power in the hands of patients. For example, we could see the hospital pricing equivalent of GoodRx, which allows consumers to view the prices of their prescriptions at nearby pharmacies. In turn, patients with a clear view of variations in costs across facilities would likely gravitate toward cheaper providers.
Interested in getting the full story? Here are two ways to get access:
1. Sign up for the Digital Health Briefing to get it delivered to your inbox 4x a week. >> Get Started
2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Digital Health Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
- Startup insurer Oscar Health is at an impasse
- Livongo is weighing a potential IPO that could come as soon as Q3 2019
- FDA Commissioner Scott Gottlieb just resigned as head of the US’s top food and drug regulator in a surprise announcement