President Donald Trump signed an executive order Monday aimed at the US health care system along with his promise of “putting Americans first” by curbing costs and revolutionizing the current system.
The new law will direct the Department of Health and Human Services to establish regulations on health care providers and insurers that they work, alongside patients and families, with more transparency on costs by disclosing negotiated rates for services, as well as, provide patients with out-of-pocket expenses before offering services.
“This is bigger than anything we’ve done in this particular realm,” Trump said during the signing of the new law at the White House. “It’s pretty much going to blow everything away.”
The current health care system works by providing patients medical services related to their situation without going over the costs or the fees associated with the service. Furthermore, it is not directly disclosed which service/s the insurer pays. This method allows hospitals and insurers to assign the same set of health care plans but at varying costs depending on the patient.
Also, in this system, neither the patient nor the family is made aware of the costs they are going to pay until a billing statement is given before paying at the cashier.
“Often, prices differ drastically between providers and hospitals for the exact same services and there is no consistency; there is no predictability. There’s frankly no rhyme or reason to what’s been happening for so many years,” Trump said.
“Everyday American patients are being taken advantage of by a system that hides critical information from them that they need to make decisions for them and their families,” Health and Human Services Secretary Alex Azar said.
The executive order, which discloses information both to the patients and the federal government, would allow patients and families make sound decisions on which health care plan best suits them and at which prices.
According to Trump, “the cost of healthcare will go way, way down” as price transparency will create greater competition.
Furthermore, the executive order will also pave the way to put an end to “surprise billing” instances where patients are made known weeks to months after that insurance companies cannot cover a provided service.
“The president has a clear vision for American health care,” Azar said. “Today, the president is delivering on that historic promise,” and that this will “go down as one of the most significant steps in the long history of American health care reform.”
The reform, still in its early days, remains unclear how the federal government will put information out to the public. A senior administration official said that whether patients would have access to a full database of specific prices or something closer to a range of prices would be decided during the regulatory process. What is most likely is that privacy will be maintained on individual patient information.
“Exactly what information hospitals and insurers will have to disclose is not specified in the executive order, which has no force of law on its own,” The New York Times reported Monday. “White House officials said the details would be worked out during the rule-making process. Hospitals and insurance companies are likely to lobby to make any disclosures as general as possible.”
Meanwhile, critics are saying that instead of creating more competition, the executive order will discourage more insurance companies instead and drive prices higher.
“Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients, and taxpayers,” said Matt Eyles, CEO of America’s Health Insurance Plans in a statement. He says it will perpetuate “the old days of the American health care system paying for volume over value. We know that is a formula for higher costs and worse care for everyone.”
When discussions began earlier in the year on the topic, Thomas P. Nickels, executive vice president of the American Hospital Association, said that the proposal is “a radical idea, requiring the disclosure of privately negotiated rates between two parties in a contract,” the Times reported in March. “It would be impractical because a hospital may have contracts with a dozen insurers, and each insurer may have four or five different health plans with different terms.”