On February 25, 2025, President Donald J. Trump signed an executive order aimed at enhancing healthcare price transparency and empowering patients with clear, accurate, and actionable pricing information. This order builds upon previous efforts from his administration to make healthcare costs more transparent and accessible to consumers. This executive order is to increase regulations and enforcement of Executive Order 13877 previously issued on June 24, 2019 (Improving Price and Quality Transparency in American Healthcare to Put Patients First) during the first Trump administration.
Key Provisions of the Executive Order
The executive order directs the Departments of Treasury, Labor, and Health and Human Services to take swift action in implementing and enforcing healthcare price transparency regulations. Specifically, it calls for:
- Disclosure of actual prices, not estimates, for healthcare services and items
- Standardization of pricing information across hospitals and health plans
- Updated enforcement policies to ensure compliance with transparency requirements
Entities Where the Executive Order Applies
The executive order on healthcare price transparency, primarily applies to hospitals, health systems, and health insurance companies. However, the order’s scope extends beyond these entities to include:
Hospitals and Health Systems: Required to disclose actual prices for services and items, not just estimates.
Health Insurance Companies: Mandated to reveal negotiated rates with healthcare providers and actual costs paid for prescription drugs.
Pharmacy Benefit Managers (PBMs): The order includes provisions for transparency in prescription drug pricing, which would affect PBMs.
Prescription Drug Providers: The order emphasizes the need for transparency in drug pricing across the healthcare system.
Expected Impact
The White House projects that the full implementation of these transparency measures could result in significant healthcare savings:
- Up to $80 billion in savings for consumers, employers, and insurers by 2025
- An average 27% reduction in healthcare costs for employers across 500 common services
- A 6.3% annual decrease in prices for the top 25%, the most expensive healthcare services since initial implementation
Industry Reactions
While supporters argue that increased transparency will drive down costs through competition, some industry groups have expressed concerns about potential unintended consequences. Critics worry that publicizing negotiated rates could lead to price increases in some cases. For those who thought transparency may be a way product of deregulation, consider the emphasis on transparency from this administration. Perhaps, there will be greater emphasis on all sorts of healthcare transparency initiatives. The administration supports as much market knowledge as possible.
Next Steps
The relevant federal agencies are expected to issue updated guidance and proposed regulatory actions within 90 days of the order. These will likely include more stringent enforcement mechanisms to ensure hospitals and insurers comply with transparency requirements.
As the healthcare industry adapts to these new transparency mandates, stakeholders will be closely watching for impacts on pricing, competition, and overall healthcare costs in the coming years.