The orderrequires HHS to propose a way to make health-care providers andinsurers give patients an estimate of their out-of-pocket costsahead of service. (Photo: Bloomberg)

(Bloomberg) –President Trump called for hospitals to disclose to patients up fronthow much they charge for tests, surgeries andother procedures, in an executive order he signed on Monday.

The federal regulations Trump is calling for push forward arelatively simple idea: that patients should know how muchhospitals charge for common procedures. Those prices aretypically trade secrets between hospitals and the insurers theynegotiate with.

The administration also wants to make medical providers andinsurers give their patients estimates of out-of-pocket costsbefore they get care.

“We're fundamentally changing the nature of the health-caremarketplace,” Trump said at the White House on Monday. “Prices willcome down by numbers you can't even believe.”

“This is a very big thing that's happening right now,” hesaid.

Details of the executive order were described earlier bySecretary of Health and Human Services Alex Azar, whose departmentwill draft the regulations. The changes are likely to facesignificant pushback from the health-care industry.

“Every day, American patients are being taken advantage of by asystem that hides critical information from them,” Azar said on aconference call with reporters.

The health-insurance industry's main trade group said the planwill backfire. “Publicly disclosing competitively negotiated,proprietary rates will reduce competition and push prices higher —not lower — for consumers, patients, and taxpayers,” Matt Eyles,president and chief executive officer of America's Health InsurancePlans, said in an emailed statement.

Eyles said the industry supports giving patients accurateinformation about their costs, but publishing negotiated rateswould create “a floor — not a ceiling — for the prices thathospitals would be willing to accept.”

An index of major health-insurance stocks were down about 1.4%at 3:33 p.m. in New York.

The Trump administration has advocated for bringing downhealth-care costs by making prices more visible, boostingcompetition and reducing regulation. Trump has also called onCongress to pass legislation to stop surprise billing, while majorpharmaceutical companies are revealing drug prices online in a bidto stave off pressure from the administration.

Many health-care prices are veiled behind contracts betweenhospitals and insurers. Employers and patients have complained thatsuch secrecy keeps prices high and makes it harder for employersand individuals to shop for services.

The administration took a step toward more transparency earlierthis year by requiring hospitals to post their list prices, knownas the chargemaster, online. That information, designated witharcane billing codes, is hard for consumers to decipher. Few peopleactually pay the list prices, which can be multiples higher thaninsurers' contracted rates.

Prices paid by private insurers can be many times the amountspaid by Medicare, the government health-insurance program for olderAmericans, research by health economists has found. Contractedrates can also vary wildly among health plans and providers,meaning that the same test or procedure could be vastly moreexpensive at different facilities in the same city.

Patients are often in the dark about those rates until they geta bill.

The new executive order goes significantly further than earlierproposals in attempting to make privately negotiated rates public.Though the details will be determined during a rulemaking processthat allows industry and other stakeholders weigh in, Azarportrayed it as a watershed moment.

“What we're announcing today will put American patients incontrol and address the fundamental drivers of high Americanhealth-care costs in a way that no president has ever done before,”Azar said.

Hospital care cost Americans about $1.1 trillion in 2017,accounting for one-third of all U.S. medical spending. The Trumpadministration wants to make available “in an easy to read,patient-friendly format, prices that reflect what patients andinsurers actually pay,” Azar said.

The order requires HHS to propose a way to make health-careproviders and insurers give patients an estimate of theirout-of-pocket costs ahead of service. Azar shared a personal storyof trying to get the price of a routine heart exam at a hospital, astruggle even for a senior health-care official.

Other aspects of the order attempt to simplify quality reportingrequirements, expand access to de-identified medical-claims dataand expand the use of health-savings accounts.

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