According to the Wall Street Journal, President Trump will issue an Executive Order this week regarding price transparency. The price transparency executive order will require hospitals, insurers and doctors to disclose their negotiated rates. This will have direct and indirect consequences.
The effect of a price transparency executive order
Despite President Obama’s efforts with the “Unaffordable Care Act,” this Executive Order will actually have an effect on the cost of care. Obama simply extended Medicaid to more consumers, feeding the healthcare machine, but not altering the cost curve in the process.
By requiring healthcare providers to disclose their negotiated rates, consumers will be able to shop for quality lower cost care. And by exposing healthcare to typical market forces, providers will have to compete on customer service and quality. That’s not how rates are currently set because providers and insurers set their rates in secret.
This will directly affect typical providers of medically necessary services, lowering the cost curve for out-of-pocket expenses, particularly for outpatient services. However, this will also indirectly affect providers of cosmetic or typically cash-pay services. Why would this affect those providers if this Executive Order doesn’t directly affect doctors in that space?
Because consumers will now expect price transparency from all providers. They won’t make the distinction between medically necessary or cosmetic services. They’ll assume all doctors, by law, should disclose their prices. And so to appear credible in the eyes of the consumer, all doctors will need to be price transparent. Just like a doctor appears more credible if they have a Facebook or Yelp account, price transparency will convey legitimacy as well.
For providers that want to comply with this Executive Order and generate leads in the process, you can sign up for the BuildMyBod Health platform here. And for consumers interested in finding pricing from a doctor near you, click here!