Episode 072: Will Hospital Pricing Transparency Rules Help? A Discussion with Dr. Philip Eskew of DPCFrontier.com

Many physicians and those supportive of free markets in medicine are making a big deal on the Trump administration's proposed executive order to increase price transparency in hospitals. The thinking is that by exposing how much each hospital charges for their services, hospitals will begin to compete on price and the cost of care will go down. Although I believe this to be an admirable goal, I think it is very shortsighted to think that a law or order without a significant market demand will change the behavior or business models of hospitals.

My guest, Dr. Philip Eskew, JD, MBA agrees with my assessment and feels that the goals of the order will likely not bear any useful fruit. In fact, it will probably lead to a slew of lawsuits that will tie up the implementation of the law.

• The most likely scenario is that hospitals would just release a gigantic charge master document on their website that would be difficult to find and almost impossible to interpret. It would also only have prices that would not be real (paid by any patient or insurance company) equivalent to the sticker price on a car that no one actually pays.
• As for legal challenges, the law states that hospitals would have to post the prices they accept from insurance providers (with their names scrubbed). But this would almost certainly be classified as trade secrets and the insurance companies would fight this order in court. This would effectively tie up the law for years and maybe make it to the Supreme Court which would likely side with the insurance companies.
• Ultimately, the only remedy for real transparency will be through patients controlling their dollars. Until such time, there will be little reason for any transparency as hospitals and other providers of care will negotiate with large payers and not bother to post anything publicly.