On Feb. 25, President Trump issued an executive order to “fulfill the promise of radical transparency” in health care. His directives include requiring the disclosure of actual prices (not estimates) of health-care services, delivering updated guidance to ensure pricing information is standardized across hospitals, and issuing proposed regulatory action updating enforcement policies.
At face value, this executive order is a step in the right direction to fix the notoriously opaque health-care system in the United States. Health-care transparency sounds great: prices out in the open, patients picking the best deal like it’s Black Friday. Rigorous enforcement of price transparency requirements should absolutely help enable Americans to make more informed decisions about their health events. While the Trump administration’s efforts to solve this issue are commendable, here’s the inconvenient truth: Transparency is worthless unless people have a real reason to care about lower prices and are in a position to shop for prices.
Don’t care after deductible
Transparency is supposed to be the ultimate power move: If MRIs cost $500 here and $2,000 there, you’d think people would flex their wallets and pick the cheaper one. Not necessarily. Especially when nobody’s incentivized to be a smart shopper. Insurance has perverted the market. When patients hit their deductible, for many, coverage turns into an all-you-can-eat health-care buffet. Who cares what it costs when the bill is on someone else’s tab?
The reality is that most of the bills patients complain about—think major procedures or unexpected illness—exceed their insurance deductibles, at which point the out-of-pocket cost becomes less relevant to them. They’re focused on coverage, not itemized prices.
According to Harvard University research, consumers reduced their spending by 42% when under the deductible. After they reached their deductible, researchers found no evidence of adjusting their spending behavior based on price variance. Unfortunately, the vast majority of health-care costs in the U.S. are derived from high-cost bills, with 5% of the population accounting for roughly 50% of all health spending and costing an average of $71,067 in health expenditures annually. These bills would exceed most High Deductible Health Plan limits, which ranged between $2,500 and $3,000 in 2024. For these individuals, price transparency wouldn’t matter since the bill isn’t on them and they have no incentive to find the cheapest option.
These large bills are the ones that have the largest price disparities and would most benefit the system with patients shopping for services. Meanwhile, for smaller bills that fall below the deductible, like routine visits or minor treatments, pricing is reasonably symmetric. In both cases, transparency doesn’t shift behavior: Patients either don’t care enough to shop around when costs soar past their deductible, or they’re already getting effective pricing where price matters less.
Survival over savings
The other reason why price transparency will not significantly reduce health-care costs is that many high-cost bills stem from emergencies. The American Hospital Association notes that hospitals admitted nearly 137 million patients via emergency departments in 2022, many requiring resource-intensive care. While there can surely be an argument that many of these emergency-department visits could be treated at less acute, less expensive environments, the current payment system has not reduced emergency utilization. In fact, research from Becker’s Hospital Review indicates that most hospitals experienced an uptick in ER visits in 2024. There are situations where patients are in no position to shop around for the best deal while riding in an ambulance. They are at the mercy of the ambulance company and will choose survival over price tags.
Calls for greater transparency are only a symptom of a much deeper underlying problem with health insurance. About two-thirds of all bankruptcies in the U.S. are directly tied to medical debt, and around half of these individuals had health insurance. The perception that insurance companies negotiate the best rates for medical care is also flat-out wrong: A 2023 Johns Hopkins study found that hospitals’ cash prices for uninsured are more often lower than insurer-negotiated prices.
Patients aren’t dumb; they just don’t feel the sting. When they have no skin in the game, they have no reason to hustle for a deal. Transparency’s just floating out there, as useless as a meme with no likes. Trump’s executive order can only enact true change to the current system if people are incentivized to shop for their care.
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