NICK SCHIFRIN: National polls show Americans believe health care prices and drug costs are among their top pocketbook concerns. Today, President Trump took aim at hospitals and insurers, with executive orders requiring more transparency around what patients actually pay. But there are questions about the extent to which the orders will help patients, and whether they could have unintended consequences. The president’s announcement today comes as the public is increasingly angry about surprise medical bills. Right now, hospitals and insurers keep patients’ costs for procedures as secret proprietary information. Today’s executive order would require health care providers to disclose before treatment what patients will have to pay. The hope is that patients could shop around for better prices. Surprise medical bills come when insured patients are treated at a hospital by a doctor not in the same insurance network. That is what happened to Andrew Haymann, who was treated by a plastic surgeon for a shard of glass in his ankle at an E.R. He told Megan Thompson of “NewsHour Weekend” his share of the bill was $5,000. ANDREW HAYMANN, Patient: I’m thinking, there’s no way I’m going to pay this.
This is insane. It’s kind of almost like, whatever, if you want to call it false advertising, when you get some kind of a crazy bill from someone who’s not in the network, and you really had no control over the fact that that — that they would be there. NICK SCHIFRIN: A new study by the Kaiser Family Foundation found that after treatment at a hospital in 2017, about one in six Americans were surprised by a medical bill. The order issued by the president today doesn’t directly address those bills, but it does require hospitals and doctors to disclose the discounted prices that they are negotiating with insurers.
President Trump says true cost transparency was overdue. DONALD TRUMP, President of the United States: And there’s no consistency, there’s no predictability, and there’s frankly no rhyme or reason for what’s been happening for many years. We believe the American people have a right to know the price of services before they go to visit the doctor. Prices will come down by numbers that you won’t even believe. You won’t even believe it. NICK SCHIFRIN: So, would these moves help bring down patients’ costs? We explore that question with Elisabeth Rosenthal, the editor in chief of Kaiser Health News and author of “An American Sickness” about the costs of the health care system and its impact on patients.
Thank you very much for coming on to the “NewsHour.” When Secretary of Health and Human Services Alex Azar today previewed the president’s executive order, he said this: “This was one of the most significant steps in the long history of American health care reform.” Is it? And will it be effective? ELISABETH ROSENTHAL, Editor in Chief, Kaiser Health News: Well, it’s important. Transparency is good if you get an accurate estimate of your out-of-pocket costs. You can make consumer decisions in elective surgeries, elective admissions.
So, in that sense, it’s good. I think what’s more debatable is, we know now that he wants the hospitals to give us the rates that they negotiate with insurers, which are much less than the list prices. So how will patients use those? And how will that be defined? I think that’s a big question. NICK SCHIFRIN: So that seems to me the key, right? Will patients, will we get the actual cost that we will owe after our insurance covers whatever? Or are we going to get something different, perhaps even what the hospitals owe? ELISABETH ROSENTHAL: Oh, well, that’s a big question, right? If I go to a contractor and say, I want my kitchen renovated, and he gives me an estimate of $1,000, and then asks for $5,000, I say no. You can’t do that in hospitals, because you have already had the care. NICK SCHIFRIN: These numbers, these values, the costs that we’re talking about that we pay out of our pockets, these are proprietary. These numbers, the insurers say that they don’t want to give this up.
So they don’t want us to shop around. How bad are they going to fight this? ELISABETH ROSENTHAL: Well, they are fighting it very hard. And they have actually said, well, if you release these prices, these insider deals, prices could actually go up, which is very counterintuitive. But in health care, we often see that if one person is charging less, and they see that the company next door is charging twice as much, they will raise the price to that sticky ceiling.
It’s called sticky pricing. So it all depends on whether there’s a real consumer market where we, the patients, or our insurers can really compare prices and go for the bottom one. NICK SCHIFRIN: And will these executive orders today, will it create that market? ELISABETH ROSENTHAL: Not in and of itself. It’s a long road before that. I mean, it will help. I think any transparency is good. Technology can help us get us to meaningful prices and competition. But whether there’s the will to get us there, hospitals, insurers may not want that out in the open, because, you know, they don’t really want the market to work here always. NICK SCHIFRIN: And bottom line, why have these issues become such a pocketbook issue for Americans? ELISABETH ROSENTHAL: Well, a lot of forces are coming together right now. First of all, a lot of us have high deductible plans. So we’re paying these bills out of pocket. Another thing is, there are narrower networks.
So we’re often more — we encounter more surprise bills. And another thing is, in the old days, doctors — I was a physician — we were employed by hospitals. So the hospitals could control what we charge. Now most doctors in hospitals are contractors. That includes the E.R. doctor, the intensive care doctor taking care of your newborn. And they can charge kind of whatever they want. And those rates are not apparent until you get your EOB in the bill. And then you’re stuck, right? You can’t say, oh, well, I would have taken my baby elsewhere. That just doesn’t make any sense. So whether it can become a meaningful market, I think it’s really up in the air.
NICK SCHIFRIN: Elisabeth Rosenthal, editor in chief of Kaiser Health News, thank you so much. ELISABETH ROSENTHAL: Thanks for having me. .
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