Donald Trump issued an executive order Feb. 25 that would heighten price transparency enforcement for hospitals and health plans. If the order is enforced, big changes may be ahead for healthcare providers.
“Payers and providers should expect more intensely analytical negotiations in future as both sets of parties leverage the data for information advantage,” wrote Joyjit Saha Choudhury, managing director of Kaufman Hall, in a blog post. “Expect greater productization of this information into consumer apps. This might mean the implementation of more push notifications and proactive healthcare suggestions, like an end-to-end knee replacement care bundle offer when a user searches pricing information for a procedure.”
Few hospitals and health systems have been penalized for not complying with price transparency regulations. But that could change as the administration doubles down on compliance.
“Providers will need to recraft their competitive strategies for this new world,” wrote Mr. Saha Choudhury. “Just as merchants across all industries had to figure out how to position themselves in Google searches, providers will need to figure out how to win on the front lines of the most popular consumer mobile applications.”
Most Americans – around 90% – support more price transparency in healthcare. The executive order, issued Feb. 25, directed the federal government to take action within 90 days. The action may include requirements to disclose actual prices and standardize pricing information.
Publicly available price information will also allow hospitals to see how much payers are reimbursing their competitors.
“If our data shows that a hospital or physician group is receiving lower rates than competitors despite providing comparable or better services, that becomes a key point in negotiations,” said Ken Steele, partner at ECG Management Consultants, during an interview with the “Becker’s Healthcare Podcast” earlier this year. “We present this data to payers, demonstrating the need for fairer reimbursement to ensure continued investment in quality care, technology, and patient experience. Without this level of insight, providers are at a disadvantage. In today’s landscape, data is power.”
