This summer marked a milestone in the battle for transparent health care costs. In June, a Trump administration policy requiring hospitals and health insurers to publish their negotiated prices for health services was brought to federal court by the American Hospital Association.
The American Hospital Association felt that the administration “did not have the legal authority to require the publication of negotiated prices” and maintained that “the publication of the prices could have perverse effects.” Melinda Hatton, a senior vice president and general counsel for the association, commented that “the proposal does nothing to help patients understand their out-of-pocket costs” and alluded to the added burden this policy would present when resources are already stretched thin.
On the other hand, Trump administration officials argued that increased “price transparency would lead to lower and more predictable prices in an industry that has huge ranges in what insurers pay for services.” They reasoned that published prices will help empower both individual patents as well as employers purchasing health insurance for their employees.
In the end Judge Carl Nichols upheld the policy, finding that hospitals were “attacking transparency measures generally in a bid to limit patients’ insight into medical costs.” He wrote that while hospitals may be affected by an empowered consumer market, that it wasn’t reason enough to “make the rule unlawful.”
Health economists and other industry experts have yet to reach a clear consensus on the effects of price transparency policies. Secretary of Health and Human Services, Alex Azar applauded the decision as progress toward increased access to services and prices for patients. The hospital association, however, intends to appeal the decision.
The rule as it currently stands, is scheduled to go into effect in January.
