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A push toward price transparency

From the Desk of Larry Van Horn,

For years I have been conducting research in consumer-driven health care markets. In partnership with the largest cash transaction platform in the US, and the nation’s largest health care medical claim clearinghouse we conducted a groundbreaking, heretofore impossible analysis to compare the cash prices offered in the market with the prices paid by insurers to providers for the same services. I analyzed, with the support of partner organizations, more than 1B medical claims and over 200K cash transactions. The outcome of this analysis demonstrated:

  • Cash Prices, when published upfront in a consumer-friendly format are, on average, 39% cheaper than the prices paid by insurers.
  • The price variation for the same services paid by insurers averages 446%.

These 2 facts taken together substantiate that due to the opacity of health care price information, the market for healthcare services is being driven by traditional market forces.

Leveraging research for policy impact.

Based on this information and leveraging relationships, I began to engage with the Trump administration surrounding the need for increased price transparency in the healthcare. This resulted in multiple meetings with President Trump, Secretary Azar, the CBO and FTC. I subsequently became engaged in assisting the Whitehouse draft an executive order requiring true price transparency in healthcare markets. The culmination of this activity was the signing of this path breaking executive order by President Trump on June 24, 2019. I was asked to speak at the signing of the executive order in the white house.

It was an honor and unique career moment for which I am grateful. There is no more tangible evidence for the connection between research and policy than the executive order noted below.

YouTube Link: https://www.youtube.com/watch?v=sWm8reQuftA&fbclid=IwAR2ESgB2rQh17htMCeX6n4xYniRDBrMw89sh-1j7yfLnQwYf7XpHEeCcAI4

White House link to Executive Order:
https://www.whitehouse.gov/presidential-actions/executive-order-improving-price-quality-transparency-american-healthcare-put-patients-first/

Given my study and experience, I will continue to support the administration’s efforts on this topic. I am grateful to be a part of revolutionizing the health care industry.
This is an exciting time in health care and there is so much information to share and discuss. With change comes opportunity. The response by providers and payers will be crucial to assisting Americans to navigate health care differently.

A forthcoming white paper “True Prices paid in Health Care” co-authored with Dr. Art Laffer, Sr.