- Citing its intent to expand its plan to include health insurers, the Trump administration is delaying the implementation of a rule requiring hospitals to disclose heretofore confidential rates for services. U.S. Centers for Medicare and Medicaid Services (CMS) chief Seema Verma says the administration prefers a less disjointed approach and will proceed expeditiously to release a combined plan this quarter.
- The delay, even if short, is a reprieve for hospital operators since they consider negotiated rates as contractual trade secrets. They have stated publicly that they will sue to block the rule.
- The White House has made price disclosure a cornerstone of its strategy to rein in ever-increasing healthcare costs.
- Opinions vary on the rule's potential impact. Supporters claim that price transparency will drive down prices but a 2016 survey of 31 health plans (covering 140M members) that provided tools to access transparency information showed that only 19% of plans that evaluated the tools found that consumers switched to lower-cost providers based on enhanced disclosure (the modest impact could be result of the user-friendliness of the tools, however). Industry authorities counter that costs could rise if certain hospitals or doctors discover that competitors are getting better deals and demand the same, adding that consumers are focused on out-of-pocket costs and won't benefit from full disclosure of negotiated prices.
- Selected tickers: Humana (NYSE:HUM), Universal Health Services (NYSE:UHS), Tenet Healthcare (NYSE:THC), HCA Healthcare (NYSE:HCA), Community Health Systems (NYSE:CYH), UnitedHealth Group (NYSE:UNH), WellCare Health Plans (NYSE:WCG), Molina Healthcare (NYSE:MOH), Cigna (NYSE:CI), Centene (NYSE:CNC), Anthem (NYSE:ANTM)