Price Transparency in Health Care: A Complex Reality
Republicans propose that patients should actively search for better deals in health care. The party has consistently pushed for giving individuals financial tools to reduce expenses. Recently, as some Republican efforts to support health savings accounts by 2025 wrapped up, former President Donald Trump unveiled his Great Health Care Plan. This initiative includes policies aimed at compelling healthcare providers and insurers to display prices “at the point of business,” among other strategies.
This approach echoes a proposal from Trump’s first term, where he suggested hospitals should post their prices online to alleviate a frequent complaint about the healthcare system—a lack of clear pricing. It seemed like a straightforward solution, especially considering the challenges patients often face in understanding their bills long after treatments.
During a 2019 event that highlighted his price transparency policy, Trump claimed, “You can compare prices for every hospital, every doctor, online.”
However, information on prices has been limited and confusing. Since the policy became law in 2021, compliance has been low and implementation difficult. Data that does exist is generally used more by health systems and insurers for negotiation purposes rather than helping patients choose the best services.
Eric Hogue, an executive at Blue Cross Blue Shield of Minnesota, mentioned they use transparency data to ensure that providers aren’t receiving vastly differing payment rates. This, he said, is to maintain competitiveness among health plans.
Low Hospital Compliance
Not all hospitals adhere to the price transparency requirements, and many are slow to comply. A survey conducted in the early months of the policy revealed that only about a third of hospitals were meeting the standards. The federal Centers for Medicare and Medicaid Services has issued notifications to hospitals, indicating that those who fail to comply from June 2022 to May 2025 could face fines.
The ongoing challenges in making healthcare affordable have prompted additional federal measures since Trump’s initial endeavors. President Biden has faced the same issue, pushing for enhanced data standardization and stricter compliance. In early 2025, Trump made another attempt to address healthcare costs by signing an executive order calling for fines against hospitals and doctors who don’t provide price quotes.
CMS has rolled out regulations to escalate penalties and demand more detail in pricing data. Yet, as Zack Cooper, a health economist at Yale, points out, there’s no clear evidence that patients are actually using this information.
Cooper co-authored a study in 2021 that revealed that patients often pass by multiple lower-cost MRI providers on their way to an appointment, frequently following their doctor’s recommendations instead.
Interviews with business owners and researchers indicated skepticism about whether making price data public would significantly alter pricing. The effects of transparency policies on actual charges can vary; for instance, a study on New York’s initiative suggested a slight rise in billed rates.
So far, these developments contradict long-held beliefs—especially among Republicans—that increased price transparency would encourage patients to hunt for better deals on services like imaging and knee replacements.
The Reality of Price Shopping
Medical pricing isn’t a one-size-fits-all scenario. For example, two babies may be delivered by the same doctor yet result in different bills depending on various circumstances. One mother might receive medication to hasten labor, while another may not, or a more complex procedure like an emergency C-section might occur, adding to the unpredictability.
Moreover, when presented, the data can often be overwhelming, sometimes buried in intricate spreadsheets that demand a grasp of medical billing codes. Hospitals use complex contract terms and historical data to determine reasonable pricing estimates, complicating transparency further.
Costs can vary significantly due to differing contracts between hospitals and insurers. Jamie Cleverley, president of Cleverley & Associates, emphasizes that these variances arise not from malicious intent but from the absence of standardization in contracts and how information is presented. “Until we align as an industry, discrepancies in data interpretation will persist,” he noted.
Using Data in Negotiations
Instead of helping patients shop for better prices, mandated data has largely become a negotiating tool. Marcus Dostel, an executive at price transparency startup Turquoise Health, explained that health providers and insurers primarily utilize price data in contract negotiations.
Turquoise Health employs machine learning to group service codes and gather pricing data, contributing to a growing sector of startups focused on pricing insights. According to Dostel, price transparency data often plays a critical role in negotiation processes.
However, price isn’t the sole factor influencing these discussions. Hogue remarks that considerations like care quality and the frequency of unnecessary treatments also matter. Negotiators may experience pressure to keep up with competitors, often leading them to seek higher payments.
This dynamic paints a complex picture of the healthcare landscape, where the dream of straightforward price comparisons remains largely unfulfilled.
