How can the new White House Competition Council, which met for the first time last Friday, actually make a difference in the lives of ordinary consumers?
The answer: by focusing its efforts on the one major economic sector that desperately needs competitive upgrades — healthcare. The Competition Council, whose members include Attorney General Merrick Garland and Federal Trade Commission Chairwoman Lina Khan, stems from President Joe Biden’s July executive order to increase economic competitiveness and reduce consumer prices.
Its recent meeting reportedly addressed at least 18 uncompetitive parts of the economy, including Wi-Fi contracts in apartment buildings and airline refunds for canceled flights. While these aspects of modern life can likely use an added dose of competition, they are small potatoes compared to the predatory U.S. healthcare system that blocks meaningful competition by making it nearly impossible for consumers to access prices before care.
These hidden healthcare prices regularly result in financial devastation. One-sixth of people in the United States have medical debt in collections, and one-third have general healthcare debt. Thousands have their wages garnished, property seized, or liens placed on their homes each year due to hospital lawsuits for unpaid medical debt.The Competition Council can demonstrate its value by committing to competitive, system-wide price transparency in this industry that badly needs it.
In practice, that means providing the support necessary to turn two healthcare price transparency rules into reality: 1) the hospital price transparency rule which took effect at the beginning of the year. That rule requires hospitals to post their discounted cash prices and all contracted rates by payer and plan.
2) The transparency in coverage rule which takes effect next July. That requires insurers to publicly publish their negotiated rates, historical claims data, and cost-sharing information. Armed with these actual, upfront prices throughout the healthcare system, consumers can shop for the best quality care at the lowest possible prices. Real prices will allow people to avoid price gouging and enjoy financial certainty just like they do in every other economic sector. Guaranteed prices will hold hospitals and insurers accountable if their final bills don’t match their quoted prices, providing patients with easy recourse to address the problem of over-billing.
Innovative employers across the country have already saved 30% to 50% on their healthcare costs by partnering with a growing number of price transparent providers. Unfortunately, the hospital rule has been marred by widespread noncompliance. Recent research from our organization indicates that just 5.6% of hospitals nationwide are fully following all its provisions. Moreover, the Biden administration has already delayed the transparency in coverage rule, and the healthcare industry has sued to block it in an attempt to maintain its profiteering by keeping patients in the dark. The Competition Council can help make these rules meaningful by demonstrating how price transparency can usher in a competitive healthcare marketplace that empowers consumers and lowers prices. Specifically, it can support the Department of Health and Human Services’ outpatient prospective payment system proposal to strengthen the hospital price transparency rule.
Before the public comment period for this proposal concludes on Friday, the Competition Council can explain its beneficial provisions, including significantly increasing penalties on noncompliant hospitals, developing clear price disclosure standards, and addressing hospitals’ use of faulty price estimator tools. Drawing on basic economics, it can clarify that only actual, upfront prices — not faux transparency via estimates that don’t protect patients from high and unknown medical bills — can unleash the competitive market needed to fix healthcare.
The Competition Council can also call on Biden to ignore fierce health insurance lobbying to further delay implementation of the transparency in coverage rule, which is supported by a bipartisan supermajority of approximately 90%.
As Colorado’s Democratic Gov. Jared Polis recently noted at Steamboat Institute’s annual Freedom Conference, “Market mechanisms don’t work to reduce prices if prices are proprietary and can’t be negotiated.” The Competition Council has the opportunity to advance this logic.
Cynthia A. Fisher is a life science entrepreneur, founder and chair of PatientRightsAdvocate.org, and founder and former CEO of ViaCord Inc.
