One Thing Biden and Trump Actually Agree On – Healthcare Price Transparency
One rare point of agreement between President Biden and Donald Trump is the importance of healthcare price transparency. This issue transcends partisanship. Actual, upfront prices can reverse the runaway costs of care, coverage, and prescription drugs and usher in a functional healthcare market.
Price transparency has been supported by the last three presidents. The Trump Administration put into action the rights provided by law in President Obama’s Affordable Care Act to know all actual hospital prices and insurance company negotiated rates systemwide. Biden kept the Trump transparency rules and even raised the fines because hospitals were not complying.
The winner on Election Day now has the opportunity to significantly lower healthcare costs by meaningfully implementing transparency, which can protect patients from overcharges and mitigate overbilling and discriminatory wide price variations.
Bipartisan backing of price transparency reflects the will of Americans, 94% of whom support this issue. This overwhelming public support is not surprising. Under the opaque status quo, consumers are forced to pay for care and coverage with a blank check, allowing countless middle players to drive up costs by acting as tolls on every transaction. When prices aren’t known, hospitals and health insurers can charge essentially whatever they want.
As a result, U.S. health spending has more than doubled, adjusted for inflation, since 2000. The country now spends 17.3% of its GDP on healthcare, nearly twice the developed world average. Approximately 100 million Americans have medical debt, and nearly two-thirds avoid care for fear of financial ruin. No wonder healthcare affordability is a top concern of voters.
Price transparency provides a $1 trillion opportunity for the American economy. According to JAMA, 25% of U.S. healthcare spending is administrative waste, overcharging, and fraud. With $4.5 trillion of national health expenditures in 2022, the JAMA analysis indicates the opportunity for more than $1 trillion in annual savings as transparency and competition eliminate waste and middle players.
Prices provide consumers, including employers and unions, remedy and recourse in the event they are overbilled. Prices can expose industry players working in the shadows to extort American workers and businesses.
Consider the story of SEIU 32BJ, the largest union of property service workers in the U.S. The union saved $33 million a year on its health plan, generating funds to give its nearly 200,000 members $3,000 bonuses and their largest pay raise in history by accessing its health claims data, spotting overcharges, and eliminating overpayments. It realized these savings primarily by carving out of its plan one major price-gouging hospital, which was charging it $10,368 for outpatient colonoscopies compared to $2,185 at other city hospitals.
Upfront prices will make it easier for other unions and employers to follow SEIU 32BJ's lead and significantly reduce health plan costs. They can share these savings with employees in the form of higher wages and lower premiums.
Unfortunately, the hospital price transparency rule continues to be marred by widespread noncompliance and a lack of federal enforcement, making it very difficult for consumers to act upon. Many hospitals are also violating the spirit of the rule by posting price estimates instead of actual prices needed to shop. Insurance price disclosures come in massive files that crash computers and are nearly impossible for ordinary consumers to parse.
Further action by Biden or Trump to strengthen the rules and make them actionable for all consumers is needed. When all actual prices are known, tech innovators can aggregate them in easy-to-use web applications so Americans can shop for the best care at the best prices at their fingertips in the same way we do for airfares today. No one would tolerate hidden prices in any other sector of the economy, and we shouldn’t accept them in healthcare either.
President Biden and Trump already agree on healthcare price transparency policy. The debate now is about which one will fight against the special interests of the healthcare industrial complex to fully implement it, creating competition and a functional market in healthcare that will put $1 trillion back into wages, earnings, and the American economy.
Cynthia A. Fisher is founder and chairman of PatientRightsAdvocate.org.
