SC present as President Trump takes bold action on healthcare costs

July 1, 2019

Private: Lawson Mansell

Policy Content Manager

Shea Carroll

Summer Fellow

As we have said before, the first step toward restoring a truly free enterprise-based healthcare system in this country is for every citizen to know how much their doctor visit, hospital stay, prescription or medical device is going to cost them out of pocket.

The typical patient’s lack of knowledge about the actual price of solving their medical issue is a national scandal right up there with skyrocketing costs.

Even with previous recent efforts to increase price transparency, South Carolina patients still had no idea what they would pay for healthcare services. Yes, federal and state regulation has forced hospitals to provide “chargemasters” detailing what they charge, but the only way to truly know one’s final cost is…to wait until the bill comes in the mail!

To show how this works in real life, Palmetto Promise examined data (see graphic below) from hospitals across four major cities in South Carolina to determine if there was a disparity in sticker prices. Using the example of a hospitalization due to a blood infection, there were wide variations in “suggested retail price” within every market. Last month, The Greenville News also reported (using the same data from the large disparities in charges across markets, regardless of the illness or the insurer.

Again, because the cost to individuals is determined by their policy coverage and the contract between the hospital and the insurer, this information does not tell us what the insurance company will cover or what the patient will ultimately pay. But, it does provides insight into the inconsistency across the board in hospital pricing.

Thankfully, this week, President Trump took bold action toward healthcare cost understanding and transparency with a detailed executive order. South Carolina’s own Dr. Jerome Aya-Ay was in the East Room when the President signed the order.

(You may recognize Dr. Aya-Ay, a long-time Palmetto Promise friend and partner, from some of our previous material. He co-founded Palmetto Proactive Healthcare, a group of cash-for-service Direct Primary Care (DPC) clinics operating all over the state.)

The initiative President Trump signed empowers HHS Secretary Azar to require hospitals across the country to publicly post their charge information “in an easy-to-understand, consumer-friendly, and machine-readable format… that will meaningfully inform patients’ decision making and allow patients to compare prices across hospitals.”

The order also covers loosening restrictions on Direct Primary Care and Healthcare Sharing Ministries. Forthcoming HHS action will open the door for more patients to be able to take advantage of these innovative healthcare models.

This White House action represents a significant momentum shift towards more transparency, not only in regard to patients’ out-of-pocket costs, but also in pulling back the curtain on the secrecy surrounding negotiated prices between hospitals and insurers.

Dr. Elaina George, an Atlanta physician, spoke at the event and explained her personal experience as a doctor and how the current system does not provide patients the information they need to make decisions for their own care:

“I love being a doctor, however one of the most challenging things has been the inability to be an effective advocate for my patients, I’ve had patients deny themselves care because they do not know how much the service will cost. Price transparency is the solution to this problem. When patients become healthcare consumers, it will drive prices down, quality up, and most importantly, help doctors serve their patients better.”

It’s important that we continue to take steps toward empowering healthcare consumers with the information they need in order to make healthcare more approachable and affordable. We will keep you posted on any new developments from the progress this week.