Hospital and insurer trade groups have allied to bash President Donald Trump's latest executive order on rate disclosures.
The groups and consumer advocates are closely watching how far HHS will decide to go with its price transparency requirements, since the order itself left the details vague. In the executive order signed Monday, Trump gave the agency 60 days to write the hospital requirements on publishing "standard charge information, including charges and information based on negotiated rates and for common or shoppable items."
"We'll know a lot more in 60 days, but it certainly sounds a lot less expansive than they were making it out to be," said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.
Trump issued a general mandate for insurers and hospitals to disclose rates they have negotiated for "shoppable" services. These are common procedures and treatments that are widely available from hospitals and doctors. The intent of this rule is to give patients the chance to compare costs "before making informed choices based on price and quality."
That's vague enough to give HHS plenty of room to add its own interpretations, Adler said. He read the order as requiring insurers and hospitals to disclose only average prices, or a range of prices, rather than specific rates negotiated by individual insurance companies.
A source familiar with discussions around the executive order said that the final version was watered down from what was originally expected, and that HHS Secretary Alex Azar wanted to mollify industry—a characterization HHS denied.
Still, major trade groups showed they hope for a light touch.
"Publicly posting privately negotiated rates could, in fact, undermine the competitive forces of private market dynamics, and result in increased prices," said Rick Pollack, CEO of the American Hospital Association.
Both the Blue Cross and Blue Shield Association and America's Health Insurance Plans echoed Pollack's views.
"We need to ensure consumers have information that is relevant to their decision-making, while ensuring disclosure of information does not raise costs or jeopardize the privacy and security of consumers' personal health information," said Justine Handelman, a senior vice president at the Blue Cross and Blue Shield Association.
The similar positions from hospital and insurance groups, which have conflicting interests on the matter of costs, have raised some eyebrows.
"It's inconsistent that they read it the same way and oppose the rule coming to same conclusion," said Shawn Gremminger of the consumer advocacy group Families USA.
Gremminger, like other consumer advocates, is hoping the regulations will lead to aggressive transparency reforms, but conceded that rules coming out of executive orders are much weaker than the original mandate.
"The threat of watering down is a real one, but not unique to this administration," he said. "We will be pushing hard to make sure this has teeth."
On the hospital side, Mayo Clinic Chief Financial Officer Dennis Dahlen said he hasn't figured out what precisely will shift on the business or patient side. He noted that like other hospitals, Mayo Clinic already offers a cost estimator tool for patients. Mayo's has drawn praise from CMS Administrator Seema Verma.
He also flagged the sheer number of "shoppable services" as an "incredibly long list," and warned that the transition to a new world where these rates are available for anyone to view will take time and would likely be complicated.
"I'm not arguing against it," Dahlen added. "It's something that should really happen. But with the complexities of it, it's going to take a little bit."
But for Adler, the fact that the administration focused only on "shoppable" services could actually undermine the force of the final regulations. While he said "shaming" hospitals with the disclosure regulations could drive down prices that are subject to the rule, he warned hospitals could respond by raising their prices where they can avoid scrutiny.
"You're not actually weakening market power that a hospital has," Adler said.
Economists are divided on whether transparency will lead to lower or higher prices long term.
Even though Adler said he had reservations about the administration's focus on "shoppable" services, he noted that this area is where economic studies have shown transparency efforts can lower prices. He referenced one study on imaging services that demonstrated prices lowered by 1% to 4%—with the caveat that this effect "isn't exactly a game changer" in the U.S. healthcare price problem.
The Senate health committee continues to work toward its own solution, with a panel vote on Wednesday for its proposals to lower healthcare costs, called the Lower Health Care Costs Act.
The legislation includes specific mandates for insurers and hospitals to tell patients ahead of time exactly what they will pay out of pocket for their scheduled treatments. Another measure would establish a national all-payer claims database similar to what's called for in the executive order.
This bill could prove to be vital piece of the overall effort on transparency, Gremminger said.
"To the extent the health committee can replicate what's in the executive order is a good thing: it's harder to weasel out of it in the future," he said.
