Transparent Medical Prices


You’d never buy a car without knowing the price. We compare prices every day for the food we eat, the clothes we wear, the hotels we use and the planes we fly. But when was the last time you compared prices for medical treatment?

It’s difficult to find out the cost of medical treatment. But that’s about to change. The Trump administration is sounding out the medical industry on requiring hospitals, doctors and other healthcare providers to publicly disclose the secretly negotiated prices they charge insurance companies for services, according to Stephanie Armour and Anna Wilde Mathews of The Wall Street Journal.

The idea is to put more purchasing power in the hands of patients (consumers) in an effort to lower medical costs and insurance premiums. Hospitals and insurers typically withhold specific prices for medical services as closely held secrets through confidentiality agreements. This puts consumers at a disadvantage when trying to compare prices.

The first step in this move by the Trump administration is the Department of Health and Human Services (HHS) seeking public comment on whether patients have a right to see the discounted prices in advance of obtaining care. Rates could potentially be posted on public websites, where consumers would check the negotiated price of a service before they pick a provider. If effective, it would lead to lower copays and/or deductibles.

With the growth of Health Savings Accounts (HSAs), patients have more control over their medical expenditures, and increased transparency of prices would make them more informed consumers of medical treatment. They would also have more incentive to save money because the unspent dollars are theirs to keep.

Naturally, this move is opposed by the American Hospital Association. They say, “Disclosing negotiated rates between insurers and hospitals could undermine the choices available in the private market.” Consumer advocates, however, praised the idea. “If this rule goes forward, it will be a huge step toward true pricing transparency and will finally allow patients to really see what their costs will be before a service – something that has rarely been possible before,” said Caitlin Donovan, director of outreach and public affairs at the National Patient Advocate Foundation.

The comment period closes May 3rd. Administration officials could move to issue a final rule mandating the disclosure of negotiated rates after that. They say the authority for requiring price disclosure stems from the 21stCentury Cures Act enacted in 2016, which makes blocking of health information illegal under penalty of up to $1 million, and from regulations stemming from federal privacy law.

Imagine shopping for medical treatment like you shop for the best deal on a hotel. Online comparison-shopping is currently available from a variety of websites including,, and others. Some day we should be able to do the same thing when you want to get your knee replaced.

Of course, the lowest price is not necessarily the best deal. Quality will always be able to demand a higher price.  The best doctors and hospitals should be worth more. But price transparency and competition should lead to higher quality and lower prices among all providers. Hospitals and insurers may scream and deny any benefits to this change, but patients should be the winners in the end.


(For more on this subject, see my earlier post Transparency Lowers Healthcare Prices.)

No comments yet. You should be kind and add one!