Why Trump’s health care price transparency rules will reignite America’s economy: Art Laffer

In a historic win for all Americans on Thursday, President Trump issued a final rule requiring health insurers to post the prices they have negotiated with hospitals, medical facilities, and doctors. Under this rule, health care consumers, including employers sponsoring workplace coverage, can finally know prices before they receive care. This action will increase competition, lower prices, and save American families money.

Combined with the Trump administration’s already finalized hospital price transparency rule, which requires hospitals to publish the secret rates they negotiate with insurance companies as well as the cash payments they will accept, Thursday’s announcement will usher in a transparent health care sector with less need for the middlemen that have capitalized on patients’ misfortune.

Once these rules delivering complete health care price transparency take effect (January 1, 2021 for the hospital rule and one year later for the insurance rule), we can expect our economy to come roaring back, and our beleaguered health care system to rebound as well.

Knowing the real prices of health care and coverage beforehand will be a huge boon for all Americans–patients, workers, employers and taxpayers.

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Together the rules will unleash a real market in health care, usher in competition and choice, dramatically lowering the costs of care and coverage. Fewer dollars going to health care and more going to wages, jobs and small businesses in our local communities will help boost our nation’s economic recovery.

When complete health care price transparency is in place, patients, consumers, and employers will be able to better shop for health care, and high-tech innovators will eagerly develop tools to help consumers access and compare prices. Better informed buyers of health care will take advantage of the huge price variation that exists in the current, opaque market.

For instance, a recent study from the respected RAND Corporation found employer-sponsored plans are paying hospitals two-and-a-half times more than Medicare pays for the same procedure. Since almost all hospitals accept Medicare, those government rates are by definition “acceptable,” which means hospitals are price-gouging workers and employers, and growing rich at the expense of the middle-class.

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Insurance companies are no better, reaping huge profits as health care costs have soared. The average premium for an employer-provided family health insurance plan in 2020 jumped to $21,300–a 55 percent increase over a decade earlier. During that same time, deductibles more than tripled.

Last year I co-authored a study with health economist Larry Van Horn, it found that cash prices are, on average, 39 percent lower than the insurers’ negotiated rates for the same care. Throughout the country, businesses have saved 30 to 50 percent on health care costs by directly contracting with price transparent doctors and medical facilities, leaving insurers out of the equation.

It’s time to disrupt

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Art and medicine essays explore diversity, bias, suffering

It’s a thought-provoking prescription for reflection and learning, and you don’t have to be an artist or a clinician to enjoy it.

Every Monday, the project sends subscribers an email that includes a piece of art work and a short essay that delves into challenging themes that connect the art to medicine. The essays are reflective and wide-ranging, covering uncertainty, death, suffering, salvation and more. Each is accompanied by a list of sources so that readers can learn more.

One recent newsletter included a reflection on permanence and the participation of AIDS patients in their own care tied to “Strange Fruit,” an installation by artist Zoe Leonard that was exhibited at the Philadelphia Museum of Art in 1998. Another featured Henri Rousseau’s “Woman Walking in an Exotic Forest” and tied it to questions of colonialism and diversity in medicine.

In a reflection on Horace Pippin’s 1940 painting “Supper Time,” the team reflects on cultural bias. Pippin, a Black artist who used his work to reflect on racism and slavery, regularly had his work branded as “primitive” and “tribal” by art critics. The essay connects the art world’s disquieting reception to Pippin’s work to clinicians’ implicit biases and the use of terms like “noncompliant” or “unmotivated” to describe patients.

“We’re trying to weave an interesting multidisciplinary lens of clinical medicine and anthropology and social justice,” Lyndsay Hoy, assistant professor of clinical anesthesiology and critical care at Penn Medicine and the co-creator of the project, told the Daily Penn.

Sign up to receive the weekly email yourself — or just tool around the intriguing list of themes the consortium has already explored — at rxmuseum.org.

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