Trump bids for more transparency in insurers' hospital costs

The Trump Administration is questioning the opportunity to require hospitals to publicly disclose the prices they charge to insurance companies for medical procedures and services – price currently negotiated in camera and kept confidential.

The Department of Health and Social Services says its goal is to boost competition and reduce costs by allowing consumers to see how prices vary from place to place. But health economists believe that such "transparency" might not really reduce costs for patients.

HHS hid two questions on the publication of negotiated prices in a separate 187-page interim rule released earlier this month, which governs health care information technology. the the Wall Street newspaper reported on the idea last Friday.

"The availability of price information could help increase competition based on the quality and value of the services provided to patients," says HHS in its draft rule. "The ministry plans to subsequently develop rules to expand access to price information for the public, prospective patients, plan sponsors and health care providers."

Zack Cooper, a health economist at Yale University, is skeptical that this particular attempt at price transparency would reduce overall spending on health care.

"Most consumers do not look at the price of health services until they have access to care," Cooper said. "So, I think we have to understand that most people are not going to suddenly go to Google for hospital prices, and then make big changes in where they are. [go for] care."

Nevertheless, Cooper's research suggests that HHS is looking in the right direction. In an article that he published last month in Health Affairs, In which he analyzed the prices negotiated between hospitals and insurance companies, Cooper discovered that most of the inflation in health care comes from rising prices for hospital care.

"Overall, the prices of doctors have not increased in the last 10 years," he said. "On the other hand, we have seen quite remarkable growth – in the order of 5% a year – in hospital prices."

These high prices are reflected in insurance premiums, which have also increased, says Cooper.

The American Hospital Association opposes the publication of negotiated prices.

"This is not really what consumers need or want," says Tom Nickels, AHA executive vice president for government affairs. "What consumers need and want is what are their direct costs? ""

Nearly 60% of those with employer-sponsored health insurance have plans with deductibles over $ 1,000. This means that more and more people are exposed to high health costs when visiting the hospital. In addition, patients frequently complain about surprise bills that they receive after their hospitalization. These surprise bills often arise when a patient is being treated by outpatients who work in hospitals that are part of the patient's insurance network.

Congress is already considering bills to address these unexpected billing practices.

Nickels, the representative of the hospital association, said that consumers did not need to know the prices that insurance companies pay for hospitals, just as they had not No need to know what a grocery store pays for Coca-Cola cases.

But a look at the public comments published on rules.gov suggests that members of the public do not agree with him.

The agency argues in its proposal that complexity – and opaque pricing in the health system – makes the system less efficient and harms the health of patients.

"Enough with secrecy and bargains," writes a commentator.

Another writes: "When we buy groceries, cars, houses, plane tickets, hotel rooms, etc., we know the price before we go. It's easy to shop at lower prices – health care is an exception.

On the other hand, Nickels argues that revealing agreements negotiated in secret would actually reduce competition. And he wonders if it would be legal.

"We have a system that essentially allows people to enter into private contracts with each other in an economy," he says.

The hospital price proposal is the latest in a series of efforts by the Trump administration to strengthen price transparency in health care.

In recent months, HHS secretary Alex Azar has proposed several rules to make drug prices more transparent and to change the trading system for these prices.

The first would require Pharmaceutical companies must include the current prices of their drugs in any television commercial or magazine promoting their drugs. Another proposal would link the price that Medicare pays for many cancer drugs and arthritis to those that other countries pay for these drugs.

And, finally, the agency wants to upset the entire prescription drug pricing system that people buy at their local pharmacy. At present, the prices of these drugs are determined by negotiations between drug companies and intermediaries, known as drug benefit directors, who negotiate discounted prices on behalf of drug companies. insurance.

But these discounts take the form of secret rebates – and PBMs keep some of these discounts for themselves. Now, HHS wants to make these discounts illegal and compel players to negotiate rebates from the start.

Sara Fisher Ellison, an economist for health care at MIT, is pessimistic that these proposals will reduce costs in the prescription drug market.

"They are trying, on the edges, to improve the function of the market," she said. "But to be honest, they probably missed the target.It's because the pharmaceutical market does not look like a standard market."

According to her, the problem is that consumers do not have the power to easily switch to a competing product if the medication they take has a high price.

"In pharmaceutical products, the end consumer – the patient – is not the sole decision maker and, in fact, he's often not even the most important decision maker," Ellison said.

In reality, she says, it is the insurance companies and the doctors who decide on the drugs that a patient receives and often from the hospital in which he finds himself. And these are the people who are already negotiating the price.