A damning new report revealed that only 25% of hospitals in
the United States are complying with pricing transparency laws.
Now, these pricing transparency laws were the big idea of Donald Trump.
It was something that he talked about quite a bit during his presidency.
On July 1st of 2022 a federal rule went into effect requiring
health plans to disclose the negotiated prices they pay physicians and
facilities for each item and service they provide.
But prior to that, a year before that, hospitals based on
this new rule had to clearly post how much they charged for
the various services and screenings that they offer.
Well, it turns out according to this report,
they're just not really complying with it.
And part of the reason why is because there's really
no harsh enforcement mechanism here, okay?
So the analysis was published by the patient rights advocate on Monday and
they surveyed the websites of 2000 large hospitals across the United States to
determine whether or not they were compliant with these federal hospital
transparency rules, which again were implemented at the start of 2021.
Now, the law requires hospitals to post their negotiated prices online in
an accessible and searchable format.
They're also required to prominently publicly and
in plain language display their prices for 300 of the most commonly used services.
These are the terms, this is what the law says.
And the goal of course, was to prevent consumers from the incredibly
frustrating surprise billing, situation that we all deal with at some point.
And also it was meant to disclose rates for
medical services that also allows consumers to shop around.
Because that's how you make decisions about your health, right?
You shop around for the best price.
I mean, look, transparency is good, but my biggest issue with this was it was
Trump's attempt to put a little tiny baby band aid, look,
baby band aid on a gushing wound.
And that gushing wound is a broken healthcare system that needs to be
entirely reformed to a single payer system,
which of course Trump was not in favor of.
But nonetheless, here's what the report said.
The report said that about 75% were not compliant with the new rule.
And even though the majority posted files with wide scale noncompliance, I'm sorry,
the wide scale noncompliance was due to most hospital files being incomplete,
illegible or not having prices clearly associated with both payer and plan.
The other issue is, look, we all know this, the hospital is gonna charge
patients different prices, different rates based on whether they're insured.
If they're uninsured,
it's likely that they will be charged a lesser amount, if the person is
insured they try to overcharge to essentially start the negotiating process.
They go back and forth and eventually agree on a price.
The system is so screwed up.
So it's a lot more complicated than this is what the hospital charges,
because the fact of the matter is they charge different prices for
different patients depending on what their insurance situation is.
Now the report also found that 6% of hospitals had not posted any standard
charges data and therefore were in total noncompliance.
Additionally none of the hospitals from the country's largest
hospital system HCA Healthcare as it's known were in compliance.
And this has real impacts on Americans of course.
This noncompliance obstructs the ability of patients, employer and union
purchasers, and technology developers to comparatively analyze prices,
make informed decisions and have evidence to remedy errors, overcharges, and fraud.
Like the most positive thing that comes out of this is that if they're complying,
you're able to at least know what to expect to some extent.
And not having to worry about the surprise billing is a big deal, right?
That's a big positive.
But the reason why these hospitals don't comply is
because they're not really worried about consequences, okay?
All they would deal with is some monetary penalties, okay?
So hospitals with 30 or
fewer beds are subject to a fine of at least $300 per day for noncompliance.
Hospitals with more than 30 beds face a pen of $10 per bed per day,
with a maximum daily dollar amount of $5,500.
This methodology means that some hospitals could face a fine of over $2
million dollars for a full calendar year of noncompliance.
Obviously they're not concerned about those fines because they're not complying.
So you gotta take into account what their profits are,
relative to what their fines would be if they refuse to comply.
And as of June of 2022, CMS had issued 352 warning notices and
157 corrective action plan request to hospitals.
CMS has also find two hospitals in Georgia.
The fines amounted to only 0.4% of the hospital's net patient revenue.
So not only was this a tiny little band aid by the Trump administration
in response to a severely broken healthcare system.
It also really does nothing at the end of the day because the hospitals aren't
really concerned about the ridiculously weak enforcement mechanism.
So that band aid got even smaller.
Okay, so with that said, I turned to this video which gives us
a little more information about the flaws baked into this price transparency idea.
>> What they proposed is mostly elective procedures.
I suppose cancer surgery and theory could be elective, but
it's going to be guided by your doctor.
The goal I think here is to make sure that you don't wind up with a surprise.
You know how is how much it's going to cost you.
>> And I think your example is a really good one because most of medical care is
not elective procedures, and most you would not choose a hospital for
cancer surgery based upon price.
You would choose on quality of the surgery that might be divorced from price.
And I look just ahead of our talk and HCA stock just to pick one
was up today with the knowledge of this announcement.
That tells you not very afraid.
And one reason they're not very afraid is the penalty for
not revealing the information.
$300 a day in the whole hospital industry it's a few $100
million that's in an industry that makes $1.3 trillion.
Ignoring this executive order is not gonna be very painful for most hospitals.
>> The weakness of Trump's executive order was not the bug.
It was the feature.
It allowed for him to appear as though he was fighting on behalf of his voters,
ensuring that he was doing something in response to a broken healthcare system.
When in reality for anyone who did their due diligence and
scratched beneath the surface,
you can see that it was all a pathetic game all along that really did nothing for
Americans who desperately need a better healthcare system.
Finally, here's a table showing you where we are with compliance on this, okay?
So as of February of 2023, the percent of
hospitals who were compliant, only 24.5%.
That's where we're at.
And again that is by design.