Biden can rein in inflation by rigorously enforcing health care price transparency

Americans grappling with the worst inflation in 40 years are getting a taste of the rapid price increases that health care consumers have long suffered. The Ministry of Labor recently announced that consumer prices have risen by 7.5% over the past year. However, national health expenditure Data reveal that consumers of health care have faced similarly high levels of inflation for decades. President BidenJoe BidenSenate Passes Resolution Supporting Ukraine Amid Invasion Fears Overnight Energy & Environment – Greens Target Texas Democrat Over Oil Ties On The Money – Congress Avoids Government Shutdown MORE and his administration can bring headline inflation under control by tackling this important and long-standing source.

To achieve that goal, Biden can double down on his support for health care pricing transparency — one of the 72 actions he is recently vaunted to cope with inflation. A new report by demonstrates why Biden’s support on this issue is so desperately needed. It finds that only 14.3% of U.S. hospitals comply with a hospital price transparency rule that went into effect Jan. 1, 2021.

This rule implements an affordable care law arrangement and requires hospitals to publish their up-to-date cash prices and all rates contracted by the health insurer and employer health plan. Yet the study finds that most hospitals are not posting their negotiated payer-specific fees “clearly associated with the names of each third-party payer and plan” as required by the rule a year after it took effect.

three of the nation the biggest hospital systems, whose combined revenues in 2021 approached $120 billion, have negligible compliance of just 0.5%. (The Department of Health and Human Services estimates that the cost of complying with this rule is only $12,000 per hospital.)

Hospitals resisted complying so they could continue to profit by blinding consumers to prices, then blinding them weeks and months after care with massive bills they would never have met. John Hopkins research published last year revealed that hospitals mark up their prices by an average of seven times the cost of care. The Los Angeles Times recently reported on leaked hospital pricing documents that showed automatic markups of 675%. Hospital tariffs regularly vary by ten for the same care even in the same hospital, depending on the payer.

The financial gain of hospitals generates significant pain for consumers of health care. Health costs out of control a third Americans with medical debt, and scared two-thirds to receive the necessary care each year.

Rising health care costs suppress business revenue and employee wages. The federal government recently announced that the United States is spending $4.1 trillion on health care in 2020 — 20% of GDP and double the developed world average.

The Biden administration has an opportunity to make this hospital price transparency rule a reality through strong enforcement, including large and well-publicized fines for noncompliance and clear standards for data disclosure. By requiring all hospitals to comply, Biden can provide consumers with the information they need to avoid overcharging and identify quality, cheaper alternatives.

When employers and unions can access true prices for all plans and see wide variations in costs, they can steer their employees and members toward the best quality care at far lower, fair prices. The resulting competition can significantly reduce health care costs, increase employee wages, and create a more globally competitive US economy.

In July, separate health insurance price transparency to reign takes effect, requiring insurers to publish their negotiated rates and historical claims data. Adopting this rule without further delay will allow patients to access prices wherever they receive care. True compliance with the two price transparency measures will usher in a functional and competitive healthcare market, allowing consumers to reduce their healthcare costs through their choices, as in all other sectors of the economy. Ultimately, consumers need system-wide price transparency, which means that even the many middlemen who profit from the misfortune of patients must also reveal their fees and commissions.

PRA’s new report confirms what US healthcare consumers already know: Hospital price transparency compliance remains very low at the start of the second year since the rule took effect.

The nation’s largest hospital systems are effectively ignoring the law without consequences.

The Biden administration can bolster compliance by vigorously enforcing these rules, allowing consumers to reverse health care prices and headline consumer inflation.

Cynthia A. Fisher is Founder and President of

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