Yet another Executive Order For health care price transparency

The fundamental problem with the ever-rising cost of health care in the United States is the fact that a third party, either employers or the government, pays for over 70 percent of that cost. Patients, therefore, are somewhat isolated from the true cost of their health care. Even if patients wanted to be informed consumers of their own care, they face the reality that prices are unknown or unknowable.

The first Trump administration put forth an Executive Order (EO) requiring hospitals to post prices for common medical procedures and treatments. The order required hospitals to list prices for “common and shoppable items and services” by late 2019. The executive order did not have any penalties for non-compliance.

The Biden administration was very lax in enforcing the EO and hospitals were reluctant in their compliance.

The second Trump administration has again published an EO, with essentially the same language as the original order. In addition, the order adds the following research:

“One economic analysis from 2023 estimated the impact of these regulations, if fully implemented, could result in as much as $80 billion in healthcare savings for consumers, employers, and insurers by 2025. Another report from 2024 suggested healthcare price transparency could help employers reduce healthcare costs by 27 percent across 500 common healthcare services. Recent data has found the top 25 percent of most expensive healthcare service prices have dropped by 6.3 percent per year following the initial implementation of price transparency during my first term.”

No references are provided, nor does the new EO include any penalty for non-compliance.

Only when people can see the true costs and direct their medical spending intelligently through a free market will costs become transparent and likewise come under control. Health services are like any other economic activity, and because of their highly complex nature, they can only be managed through unregulated interactions of patients and providers. No centralized plan dictated by Executive Orders can account for all of the factors involved in patients’ decisions and care.

The best motivator for providing cost awareness in health care for patients as consumers would be to eliminate third-party payer systems and allow patients to control their own health care dollars. This change would increase competition, increase innovation at lower costs, assure quality, and improve access to services.

No one would suggest that people should not make their own decisions about daily nutrition, housing, education, or marriage and family. The same should be true of health care.