Imagine if you took your car into the shop and the mechanic said you need some repairs. "How much will it cost?" you ask, and the mechanic says, "No idea. Let's do the work right now, and in a couple weeks we'll send you a bill."
That's how health care providers now work. Because of varying levels of coverage by insurance companies, the same procedure could cost one patient a couple hundred dollars, while costing another a thousand or more.
President Trump has decided that is no way to do business.
In an executive order issued Monday, Trump ordered the Department of Health and Human Services and other federal agencies to develop rules that will require hospitals and other health care providers to disclose prices to show what both the insurer and the patient will pay for a service.
“The president has a clear vision for American health care,” Health and Human Services Secretary Alex Azar said. “Today, the president is delivering on that historic promise," adding that this will “go down as one of the most significant steps in the long history of American health care reform."
The new rules would also force health care providers and insurers to tell patients exactly what their out-of-pocket costs would be before any service is provided.
“Everyday American patients are being taken advantage of by a system that hides critical information from them that they need to make decisions for them and their families,” Azar said. He added that knowing the cost of service beforehand means Americans would be able to comparison shop — just like they might when getting their cars fixed.
Azar also said his agency and others would seek to end “surprise billing,” in which patients find out weeks or months later that their insurance companies won't cover a provided service.
"Exactly what information hospitals and insurers will have to disclose is not specified in the executive order, which has no force of law on its own," The New York Times reported Monday. "White House officials said the details would be worked out during the rule-making process. Hospitals and insurance companies are likely to lobby to make any disclosures as general as possible."
It remains unclear just how far the administration will go in making all negotiated prices public. A senior administration official said that whether patients would have access to a full database of specific prices or something closer to a range of prices would be decided during the regulatory process. But the order will also call for a public database of anonymous insurance claims information, with protections to keep individual patient information private. This data could be useful to researchers, but probably less helpful for patient health care shopping.
The new plan is facing some opposition. When discussions began earlier in the year on the topic, Thomas P. Nickels, an executive vice president of the American Hospital Association, said the proposal is “a radical idea, requiring the disclosure of privately negotiated rates between two parties in a contract," the Times reported in March. "Moreover, Mr. Nickels said, it would be impractical because a hospital may have contracts with a dozen insurers, and each insurer may have four or five different health plans with different terms."
Trump, in the midst of a re-election campaign, is making a new push to deal with health care in the U.S. He is reportedly also preparing a new plan to help lower prescription drug costs.