In just a few days, President-elect Donald Trump will reclaim the Oval Office. High on his list of priorities should be enforcing the hospital price transparency rules he announced during his first term.
The rules, which took effect in 2021, require hospitals to publish prices for 300 common procedures, from blood tests to MRIs to cardiac surgeries, in “machine-readable” files. But most hospitals aren’t complying.
By simply enforcing the rules, Trump can restore greater competition, choice, and transparency to the healthcare system.
Price transparency is crucial to functioning markets. When buyers can compare the prices of goods and services, sellers have to compete with one another for their business. Over time, prices fall and quality improves.
Absent transparency, sellers need not compete as fiercely. They can get away with keeping their prices higher than they would in an efficient market.
If Hospital A announces that a procedure costs $450, and Hospital B advertises the same procedure for $400, many patients will choose Hospital B. Hospital A will eventually have to explain why patients should pay more. Perhaps its quality metrics are better, or the risks of costly complications are lower. Or Hospital A may just have to lower its prices to match those of its competitors.
Unfortunately, hospitals are flouting the rules originated by the first Trump administration. A November report from Patient Rights Advocate found that just 21% of 2,000 hospitals are in compliance — down from 36% in July 2023. Worse, only 17% of hospitals “were found to be sufficient in their disclosure of dollars-and-cents prices.” Just 7% “were found to be both fully complying and posting sufficient pricing data.”
They’re flouting the rules because there’s next to no punishment for doing so. As of November 2024, the Centers for Medicare and Medicaid Services had “issued penalty notices to only 15 hospitals in four years and only one notice in 2024,” according to PRA.
The Biden administration has also watered down price transparency requirements. PRA reports that standards issued last July “included the option to omit actual, dollars-and-cents prices” in favor of wishy-washy price estimates and averages.
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No wonder nearly 450 hospitals that were compliant last February have relaxed transparency measures in the months since. And most hospitals, a whopping 1,579, were fully noncompliant as of November.
Price transparency enables patients to seek out healthcare with the best value and quality. Let’s hope Trump stringently enforces the price transparency rules he issued during his first term in his second.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on X @sallypipes.