The Pros and Cons of New Health Care Price Transparency Rule

The Trump administration on Friday proposed a new health care price transparency rule that would basically require hospitals to explain how much a medical service would cost before a patient receives treatment. It would also require hospitals to tell patients, prior to treatment, how much their insurance plan would pay and how much they would owe out of pocket.

The new rule would give non-emergency patients a chance to shop for a better deal. 

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“We believe the American people have a right to know the price of services before they go to visit the doctor,” President Donald Trump said Friday in a statement.

According to Anthony LoSasso, a DePaul University professor who specializes in health care economics, this could cut either way.

“What economist could be opposed to price transparency? Or consumer?” said LoSasso. “It would require providers put info on total charge and breakdown of what they get reimbursed for those services.” 

“It’s a well-intentioned idea,” said LoSasso. “But I’m on the fence about it because there are lots of pros and cons, in my opinion.”  

“I want to think that people can benefit from price transparency. But for a variety of reasons, people don’t look at pricing info even when it’s available,” said LoSasso. “Personally, I’d like to see this info as a researcher and as a consumer of health care. I want to study this info because it could be really revealing.”

Four of the largest hospital organizations oppose the administration’s new rule and plan to challenge it legally.

“Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery,” reads a joint statement issued Friday from the American Hospital Association, Association of American Medical Colleges, Children’s Hospital Association and Federation of American Hospitals.

“Because the final rule does not achieve the goal of providing patients with out-of-pocket cost information, and instead threatens to confuse patients, our four organizations will soon join with member hospitals to file a legal challenge to the rule on grounds including that it exceeds the Administration’s authority,” the statement continues.

Blue Cross Blue Shield Association President and CEO Scott Serota also issued issued a statement against the administration’s transparency rule.

“The publication of negotiated rates for medical services may have negative, unintended consequences – including price increases – as clinicians and medical facilities could see in the negotiated payments a roadmap to bidding up prices rather than lowering rates. The rule also has potential to add complexity and confuse consumers, who will not be able to determine their own out-of-pocket costs from this information.”

LoSasso joins “Chicago Tonight” to discuss the new rule.

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