Why a Health Care Price Transparency Legal Victory Will Be a Monumental Win for American Consumers
The most important court case involving American health care isn’t next month's Supreme Court challenge to Obamacare's constitutionality; it's the ongoing legal battle over the Trump Administration's revolutionary hospital price transparency rule which takes effect in January.
Even if Republican state attorneys general convince the Supreme Court that Obamacare's individual mandate, absent a penalty, is unconstitutional, Obamacare is not going anywhere. Yet its runaway costs necessitate a fix. Health care price transparency will reduce out of control health care and coverage prices, a top concern of Americans and businesses, by allowing consumers to shop. Price transparency will unleash a functional health care marketplace that will put downward pressure on prices, spur innovation, and improve quality.
Just this past Thursday, the U.S. Court of Appeals for the District of Columbia Circuit heard a challenge from the hospital industry looking to block the Trump Administration's hospital price transparency rule that requires hospitals to publish their discounted cash prices and secret negotiated rates.
Like the U.S. District Court, which upheld the Trump Administration’s rule in June, the Appeals Court challenged the plaintiff's complaints that complying with the rule to post their real prices violates their First Amendment rights and creates an undue burden. Lisa Blatt, representing the hospital industry, tried to argue that hospitals already post their legally-required "standard charges" in the form of the list prices known as "chargemasters." The Court pointed out that since virtually no one pays chargemaster prices, they cannot be "standard." The Court also noted that the "maximum" chargemaster rates, by definition, cannot be "standard," as most actual charges vary and are well below that list price.
Ms. Blatt claimed that disclosing real prices is impossible because these rates are unknowable. Yet real prices are certainly known on the "explanation of benefits" on hospital bills that show up in the mail weeks and months after care. The judges asked, “Why can't they be posted beforehand?” The Court also called hospitals' complaints about the cost burden of the rule "arbitrary and capricious."
Courtney Dixon, the U.S. Department of Justice attorney representing Health and Human Services, noted in today's hearing that patients are so desperate for price information under this opaque status quo that they have turned to crowdsourcing by uploading their explanation of benefits to the web. Price transparency, which is supported by roughly 90 percent of Americans, will empower patients with pricing knowledge, boosting wallets, wages, and the overall economy.
The hospital industry's legal challenge is its last-ditch effort to keep patients in the dark to maintain its sky-high profits derived from demanding patients pay with the equivalent of a blank check. Yet it has no case. The D.C. District Court already rejected hospitals' argument that disclosing prices violates their First Amendment rights, calling it "half-hearted." In no other economic sector are patients supposed to make purchasing decisions without access to price information.
"No one would buy an airplane ticket, article of clothing, tank of gasoline, life insurance policy, or a new car or house without knowing the price of that item before buying it," our organization, PatientRightsAdvocate.org, argues in an amicus brief for this case. "Indeed, it would be inconceivable for the sellers of those products to hide the true prices from consumers and then reveal them only weeks or months later when the consumer receives a bill." Yet hospitals are trying to argue that they deserve special treatment from pricing practices that exist in all other areas of the economy. The Appeals Court is right to be skeptical of this argument.
American health care consumers are ten weeks away from enjoying systemwide health care price transparency. Instead of being blindsided by health care costs months after treatment, price transparency will let them make rational health care decisions by comparing value. This health care revolution is far more important than the challenge to Obamacare. A victory in this court case will be a monumental win for American consumers.
Cynthia A. Fisher is a life sciences entrepreneur, the founder and chair of PatientRightsAdvocate.org, and the founder and former CEO of Viacord Inc.
