Despite Large Bipartisan Majority, Hospitals Trying to Beat Back Price Transparency

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Thirty-four state hospital associations penned a letter to Health and Human Services requesting a delay of the implementation requirement of transparent prices as ordered by the Trump administration. Their request, according to their letter, contends that they’re busy managing the COVID-19 pandemic. But they show their hand when they add, “we hope that you will agree that advancing this policy is not essential at this moment.”

Frankly, they’ve never thought it was essential. In fact, they believe it is detrimental to their business, which is why they filed suit against HHS and subsequently filed an appeal when they lost by way of summary judgment.

The hospital trade associations claim they don’t have the time or resources to implement this rule, even though the order was made 18 months prior to the scheduled date. This scenario reminds me of wise admonition I received when I was a young hospital executive: “The failure to prepare on your part does not constitute an emergency on mine.” Their failure to prepare should not negatively impact something that nearly nine in 10 Americans want and need.

The fact is that hospitals have the data, yet they have spent significant resources fighting the administration to keep their negotiated prices hidden from their patients rather than prepare for health care price transparency.

As a former hospital executive and administrator, I can attest to the fact that negotiated rates are readily available and used daily to reconcile payments from insurers. The claim that making this information available consistent with the order would be too time consuming is patently false. The American Hospital Association and the state-based hospital associations they represent are spending increasingly bigger sums of money each year to protect their financial interests by hiding real prices.

The letter refers to a concern that implementation would divert financial and staff resources from caring for patients. But what we know to be true is that neither of these points are entirely accurate.

According to research conducted by Athena Health, the number of physicians in the U.S. increased by 150% between 1975 and 2010. Contrast this with the rise in hospital administrators during the same time period—which increased by 3,200%. The staff and the data are there.

The letter goes on to discuss the financial strain placed on hospitals and patients but the Congressional Budget Office has informally scored this bill at no cost to the taxpayers and as a tremendous economic benefit to all Americans. The hospitals have not demonstrated any financial strain as they’ve engaged in expensive litigation that resulted in a loss and subsequent appeal.

In fact, the American Hospital Association spent over $22 million in 2019 on lobbying efforts, and is on track to eclipse that in 2020 as it fights the Health Care PRICE Transparency Act (S. 4106) that seeks to codify the executive order that makes prices in health care transparent.

Not only do nearly 90 percent of Americans want health care price transparency, nearly 80 percent believe it leads to lower prices for services they consider “shoppable.” This is one of the few truly bipartisan issues. Lawmakers on both sides of the aisle would help their constituents by co-sponsoring and supporting it.

David Balat is the director of the Right on Healthcare initiative at the Texas Public Policy Foundation.

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