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President Donald Trump wants hospital prices to be more comprehensible to the average patient. But making those costs transparent might take more than executive orders.
Back in 2019, during his first term, Trump signed an executive order that, once it went into effect on Jan. 1, 2021, mandated hospitals to “establish, update, and make public a list of their standard charges” for 300 services in a way patients can understand and update that information at least once annually.
But compliance has been low. In a HHS inspector general report from November 2024, 46% of the 5,879 hospitals supposed to provide information had not. The Centers of Medicare and Medicaid (CMS) has issued some fines, but the agency hasn’t had enough staff to continuously enforce the rule, Healthcare Brew previously reported. Hospitals also told the Department of Health and Human Services (HHS) they needed more support and a better understanding of the rule in order to comply.
However, the Departments of the Treasury, Labor, and HHS are all tasked with enforcing the rule, as the federal government is laying workers off left and right, including 10,000 staffers at HHS as of April 1. A lack of staff was previously cited as a challenge to implementing this action, and that is unlikely to improve now.
Why it matters
Price transparency is not just to help patients make smart financial decisions but to also keep healthcare costs down, Ben Maisono, SVP and head of strategy at healthcare software company Tendo, told Healthcare Brew.
CMS, for example, has pretty standardized rates across the country for healthcare services, from surgeries to checkups. But commercial health plans and providers can independently negotiate prices, and it’s long been unclear the reasons behind the costs.
This means that if a hospital had the biggest presence in one area, it could potentially command higher prices than if it had more competition. The idea is that if there was more transparency in this process, the prices could come down, Maisono said.
“When prices are transparent, natural market dynamics can happen,” Maisono said. “If all these back-end negotiations happen, you hope that they’re balanced…but in reality, we know it’s not a perfect market.”
He said that there are “misalignments” between value of the care and negotiated rates, and that a more transparent market could help patients “win on value, cost, quality, and convenience.”
The problem
Limiting the lists to 300 services also left many things “undefined,” Maisono said. The process had price inaccuracies and didn’t provide a standardized format for receiving data, he added.
“The original legislation basically put this on health systems, but they didn’t have the tech to do it, or they didn’t have the clarity to make it useful. So they dumped some very hard-to-read files trying to meet the requirement,” he said.
Once Trump took office again, he signed another executive order on Feb. 25 to fix and enforce the prior ruling, including demanding prices for all services a facility offers. The update also requires hospitals to disclose “actual prices” instead of estimates and to “rapidly implement and enforce” the regulations within 90 days—or risk incurring fines of up to $5,500 per day after the deadline.
Will it work?
Still, Rajiv Leventhal, senior analyst in digital health at research firm eMarketer, told us that while the price transparency rule is “well-intended,” he doesn’t really anticipate much change.
“Price transparency is a buzzy word, but in healthcare, it’s very, very tough to implement at the patient level where you can just see all the costs before you make a purchase like you can in other aspects of life,” he said.
It will still be hard to pull prices from hospitals, he said, because costs vary between health plans and facilities, as well as across patients’ individual health plans. It’s also complicated, he said, if doctors need to perform more tests than what they had expected when they first provided the cost.
Providers and plans that negotiate prices are also “very incentivized” to keep the prices and the reasoning behind them hidden, Leventhal said. According to the New York Times, obfuscation allows hospitals to set higher prices while also making it less clear to insurers what they’re charging their competitors.
Ariel Levin, director of coverage policy at the American Hospital Association, said in a statement that the AHA supports pricing transparency and would welcome collaboration with the Trump administration to make sure patients get the information they need.
“We continue to urge caution against stripping patients of the option to review both the rates negotiated between their health plan and providers and a more comprehensive estimate that in many cases will more accurately reflect how services are bundled and the cost-sharing imposed by their health plan,” Levin said.