President Trump issued an Executive Order today regarding price transparency in health care. Beyond the state legislative and Congressional actions on price transparency the Trump Order outlines a five pillar approach to price transparency and quality. Thorn Run Partners has compiled a summary of the order that I've attached. Also look for our RBMA's Washington Insider for all the details.
Trump Signs Executive Order to Increase Health Cost & Quality Transparency
• The executive order outlines a five-part plan to increase transparency around cost and quality, expand health savings accounts, and address surprise billing.
• HHS Secretary Alex Azar called it one of the "most significant steps" in the history of health care reform.
• Hospitals and Insurers have already criticized the order for potentially reducing competition and driving up costs without truly assisting patients in understanding costs.
President Trump signed an executive order (fact sheet)this afternoon aimed at increasing transparency around health care cost and quality. The order outlines a five-part plan to help patients better understand medical costs before they receive services and expand flexibility around how patients save for and pay health expenses, as well as directives to address surprise billing. On a White House briefing call this morning, Department of Health and Human Services (HHS) Secretary Alex Azar declared the executive order would go down as "one of the most significant steps in the long history of American health care reform."
• Context. The executive order comes a week after President Trump told ABC News he would be announcing a "phenomenal" new health plan within the next couple of months to serve as a pillar of his reelection campaign. The new policy directive also continues the Administration-wide focus on increasing transparency. The announcement also coincides with heightened attention to health care costs on Capitol Hill, which have become a bipartisan issue with lawmakers in both chambers working to advance legislation on surprise billing among other issues.
Secretary Azar stated that the executive order will encompass five different policy directives and it will instruct multiple federal departments to collaborate to carry out President Trump's plan for increased health care transparency. The health Secretary noted that the executive order continues President Trump's directive to empower patients through additional transparency, and follows the administration's rule to require drug manufacturers to disclose pharmaceutical list prices in direct to consumer ads by July 9. Administration officials have not disclosed how specific the information to be disclosed will be, and said it will be "hammered out" in the rulemaking process.
President Trump's plan to increase price and quality transparency focuses on the following five directives:
1. Hospital Price Transparency - Directs HHS to require hospitals to disclose information about their negotiated rate in a format that can be easily understood and used by patients.
2. Out-of-Pocket Cost Transparency - Directs HHS and the Departments of Labor and the Treasury to work together to require insurance companies to provide patients with information on the cost of services before they receive care.
3. Health Quality Reporting - Directs all government agencies to work together to develop a comprehensive roadmap for consolidating quality metrics across all federal health care programs.
4. Health Care Data - Directs government agencies to work together to expand access to health care claims data - de-identified to preserve privacy - to enable the development of tools and analytics that empower patients.
5. Health Savings Accounts - Directs the Treasury to expand the availability of and flexibility of health care savings accounts. Additional flexibilities include allowing health care savings accounts to be used for direct primary care, and increasing the amount of funds that can be carried over at the end of the year for flexible spending.
• Critics. The policies outlined in the executive order have already garnered opposition from hospitals and insurers, and the Federation of American Hospitals, the American Hospital Association, and America's Health Insurance Plans (AHIP) have argued that disclosing the negotiated costs will not assist patients in understanding their true out-of-pocket costs. AHIP noted that consumers can already gain insight into their out-of-pocket costs by using insurer tools like cost calculators. Hospital and insurer trade groups also criticized the policies for potentially reducing competition, reasoning that physicians will demand higher pay and drive up health care costs for all.
• Supporters. Former Senator Tom Coburn (R-OK) and almost 4,000 physicians sent a letter to the administration last week in support of the proposal, and explained that "creating real-time price lists isn't as hard as those who benefit from keeping prices in the dark would have you believe."
• What's next? Many of the policy actions outlined must be completed within 180 days of President Trump signing the executive order, with some as soon as 120 days. Directives under the order could be delayed, as hospital and insurer trade groups are expected to challenge the policies in court.
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Robert Still FRBMA
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Radiology Business Management Association (RBMA)
Fairfax VA
(703) 621-3363
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