The most important healthcare document released this year wasn’t another regulation, another inspector general report, or another congressional hearing. It was a list of more than 500 hospitals spread across 45 states and the District of Columbia, which the Trump administration identified as failing to comply with the hospital price transparency rule. Five years after Congress required hospitals to disclose what they charge, hundreds still aren’t following the law. So, at this point, we’re no longer debating transparency, we’re debating accountability.
Anyone who has spent time inside a hospital finance department knows these organizations possess extraordinarily sophisticated revenue-cycle systems. They know what Blue Cross pays for an MRI, what Medicare reimburses for a hip replacement, what a self-pay patient owes after meeting a deductible, and how each payer contract differs from the next. The information Congress asked hospitals to disclose isn’t missing. It already exists.
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That’s why the conversation needs to change. This is not an information technology problem or a software problem, it’s an incentives problem. Hospitals have every technical capability necessary to comply, but current public policy is not making transparency a better business decision than secrecy.
Price secrecy has economic value. It protects negotiating leverage with insurers, it shields reimbursement differences from employers shopping for healthcare coverage, and it weakens one of the most important forces in any competitive marketplace: informed buyers. Organizations respond to incentives, and right now, hospitals are not incentivized to be transparent about their prices.
The Trump administration deserves credit for recognizing that reality. Rather than issuing another guidance document or quietly negotiating corrective action plans, the Centers for Medicare and Medicaid Services publicly identified hospitals that remain out of compliance with federal law. Naming institutions that fail to meet transparency requirements changes the conversation from regulatory process to public accountability.
Consider the state of Texas, which has enacted some of the strongest hospital transparency laws in the country. More than 42 Texas hospitals nevertheless appeared on the administration’s noncompliance list. That should concern policymakers. If hospitals continue ignoring transparency requirements in one of the nation’s toughest regulatory environments, then the answer is not another rule or another reporting requirement. The answer is making the existing law matter.
Texas is hardly an outlier. Hospitals in North Carolina, Tennessee, Maryland, Kansas, and many other states continue appearing on federal enforcement lists despite years of regulatory guidance and repeated opportunities to comply. The challenge isn’t regional, partisan, or ideological. It’s structural.
At the end of the day, patients cannot make informed financial decisions if the bill arrives long after the care has been delivered. Markets don’t become inefficient because consumers make poor decisions. They become inefficient when one side controls information the other side cannot obtain.
Congress has already done the hard part in establishing the legal framework for transparency. CMS has spent years developing regulations, refining reporting requirements, and expanding enforcement authority. The administration has now publicly shown the country which hospitals are complying and which are not. The next step should not be another round of stakeholder meetings or another lengthy debate about implementation. It should be consistent, credible enforcement that changes behavior.
State attorneys general could lead the way on this, if they have the courage. Perhaps a hospital in violation of federal transparency laws shouldn’t be permitted to engage in debt collection for unpaid bills until they comply with the law? States such as Texas, Colorado, North Carolina, and others have already begun experimenting with stronger accountability measures that link transparency to governance, consumer protection, and institutional reputation. Those efforts demonstrate an important principle: organizations change when incentives change.
THE $80 BILLION HEALTHCARE LOOPHOLE DISGUISED AS CHARITY
The federal government should learn from those experiences rather than continuing to rely primarily on delayed administrative penalties that many large health systems simply absorb as another cost of doing business. Justice Louis Brandeis famously observed that “sunlight is said to be the best of disinfectants.” The observation remains as relevant today as when he first wrote it, and particularly apropos for hospital pricing.
Sunlight, however, only works when it is allowed in. Congress opened the blinds more than five years ago. Now it’s time to punish the hospitals that pull them shut.
Peter J. Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest.
