“The Burden of Compliance”

Hospitals have filed their initial suit to prevent the Trump administration from promulgating a rule that would require hospitals to make public the secret rates they agree with insurers. Their argument centers on this:

The burden of compliance with the rule is enormous, and way out of line with any projected benefits associated with the rule[.]

It’s hard to understand the degree of burden in simply publishing the agreed rates. Paper and ink aren’t expensive, and electrons are even cheaper.  Beyond that, the benefits are enormous: it would allow patients and prospective patients to know which hospital charges what for a given procedure, so the patient could determine—under his own imperatives—which hospital has the most cost effective procedure.

The benefits also include each hospital knowing what its competitors charge, resulting in price competition—also the benefit of patients and prospective patients.  And to the benefit of the insurers, as price competition brings prices obtained in their direction, and seemingly paradoxically, to the benefit of those same hospitals as price competition brings prices paid in their direction, with the two pressures driving prices to an intermediate level optimal for the patients and prospective patients, for consumers.

Health and Human Services has the right of it. Here’s HHS spokesman Caitlin Oakley:

Hospitals should be ashamed that they aren’t willing to provide American patients the cost of a service before they purchase it. President Trump and Secretary [Alex] Azar are committed to providing patients the information they need to make their own informed health-care decisions and will continue to fight for transparency in America’s health-care system.

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