Trump’s new EO pushes for price transparency

Americans routinely make healthcare decisions without knowing costs in advance. President Donald Trump’s new executive order, signed Tuesday, aims to change that by strengthening price transparency requirements for hospitals and insurers. The action represents a renewed push to implement regulations first introduced during his previous administration that many consumers say were inadequately enforced.

Price variations without quality correlation

The order directs federal agencies to vigorously implement and enforce existing transparency regulations that require hospitals and insurance companies to publish their actual negotiated prices, not just estimates.

A recent Trilliant Health report reveals why this matters: across major U.S. markets, healthcare prices for identical procedures vary dramatically with little connection to quality. Their analysis found median negotiated rates for heart surgical procedures ranged from $26,500 in St. Louis to $153,800 in New York City – a difference of $127,300 for the same procedures.

Similar variations exist across all surgical categories. Digestive surgical procedures show a $98,900 difference between highest and lowest markets, while orthopedic procedures vary by $85,900 and neurological/spine procedures by $144,900.

Perhaps most troubling for patients: paying more doesn’t mean getting better care. The report found that hospitals charging premium prices often don’t deliver better outcomes. In Chicago, researchers examined the relationship between what hospitals charge and their patient mortality rates for common conditions. They discovered that the most expensive hospitals weren’t necessarily the safest ones. In some cases, hospitals charging the highest prices had worse patient outcomes than less expensive competitors across town.

Legal pressure on employers to get better deals

The executive order targets a growing problem for American families and their employers: runaway healthcare costs. Companies can potentially save 27% on common medical services simply by steering employees toward more affordable options – if they can find them.

Over the past decade, the cost of family health coverage has jumped dramatically. Workers now contribute 41% more toward premiums than they did in 2013, while employers pay nearly 48% more. 

Why some resist price transparency

Not everyone in healthcare stands to benefit from price transparency. Health system operating margins (2.3%) are significantly lower than those of health insurers (5.2%) and life sciences companies (17.8%), suggesting hospitals may have less financial flexibility to absorb pricing pressures that could result from transparency.

“Whatever the explanation is for the startling spread in pricing for healthcare services, it is not solely attributable to whether a market is considered a monopoly,” the report states. “In fact, the negotiated rate for healthcare services is often lower in monopoly markets than in the three most competitive U.S. markets.”

The order takes special aim at prescription drug pricing transparency. Americans pay more than four times what other developed nations pay for the same brand-name medications – a gap that proper transparency might help close.

Making healthcare shopping more like regular shopping

At its core, the executive order aims to bring healthcare purchasing closer to how we buy other products – with clear pricing that lets us compare options before making decisions.

The Trilliant report suggests this fundamental shift is coming whether healthcare providers are ready or not. “Value for money will be the defining trend of the U.S. health economy over the next decade,” it states, adding that “every health economy stakeholder can – and must – deliver more value for money to their customer.”

We’re already seeing signs of this transformation. Surgery centers outside of hospitals now handle over half of eligible surgeries, up from about 44% in 2019. Price transparency could accelerate this trend by making these cost differences obvious to patients and employers alike.

Will President Trump’s renewed transparency push finally make comparison shopping for healthcare possible? The jury’s still out. But the Trilliant report makes a compelling case that the current system – where identical services can cost three times more at one facility than another without any improvement in quality – simply can’t continue as healthcare costs consume an ever-larger share of family and business budgets.