The Trump administration is pushing ahead with a new rule that could require hospitals to reveal the prices they negotiated with insurance companies. The White House says the move could help bring the free market into the murky world of health care.
But the CEO of one of the nation’s largest hospital systems says the rule will just lead to more confusion for consumers.
“You won’t still know what your cost will be even when you look at our prices,” Dr. Kenneth Davis, CEO of the Mount Sinai Health System, told Yahoo Finance’s The First Trade. He says insurers like Cigna (CI), UnitedHealth (UNH), Anthem (ANTM) and Aetna parent CVS Health (CVS) should be the ones to house that information and help customers make sense of it.
“There are so many nuances in the insurance policies that going on our site isn’t going to tell you what you’re really going to pay,” he said. “You need the insurance information, and that’s the information that’s available from the insurance company. They know negotiated prices. So you’re really asking the wrong people to disclose the information.”
The rule could show how widely prices vary between regions and even at hospitals and clinics in the same city. In an interview with the Wall Street Journal, Centers for Medicare and Medicaid Services Administrator Seema Verma called it a “turning point in health care and a turning point to the free market in health care.”
But the hospital industry’s main lobbying group, the American Hospital Association, said in a statement that move could “seriously limit the choices available to patients in the private market and fuel anticompetitive behavior among commercial health insurers in an already highly concentrated insurance industry.”
Hospitals and insurance companies are notoriously secretive about their contract deals, something Dr. Davis attributes to competition between care providers and the insurance companies. Insurers are looking for the best deal, he said, while providers want the highest payment.
“Everyone’s worried about what they will then negotiate with the insurance company,” he said. “The insurance companies are worried, in turn, that other health networks like ours might ask for higher prices.”
Dr. Davis says regulators should be pushing the insurance companies and not the hospitals to disclose pricing.
“We have thousands of items that we would list items on,” he told Yahoo Finance’s Alexis Christoforous and Brian Sozzi. “If I have an insurance policy and I go online, I don’t know -- still -- what my co-pays and deductibles are going to be. Where that information should be is on the insurance company website.”
“I don’t have a problem disclosing that information,” he said. “I just think it’s important that people be able to use that information validly.”
Without knowing what their insurance policy covers, he said, “they won’t know what they’re going to pay anyway.”