Trump Can Help Save Trillions Through Health Cost Transparency
Finally, President Trump is set to reduce government expenditures and implement aggressive deregulatory measures — reviving his initial health-spending initiatives hindered by Congress or overturned by the Biden administration.
This is a significant reason why Trump established the now well-known Department of Government Efficiency. Its mission: to pinpoint and eliminate ineffective and counterproductive government spending.
Reforms are urgently needed. Specifically, health-care expenditures are exacerbating the federal deficit and stifling economic expansion.
DOGE will struggle to achieve its goals without addressing the soaring costs within the US health-care system, as a staggering 48% of federal expenses are dedicated to health care.
And the outlook is grim: Federal health expenditure is anticipated to spike from $2.2 trillion in 2023 to $3.8 trillion by 2032, constituting an astonishing 20% of the country’s GDP.
However, a substantial portion of this expenditure is unnecessary.
Some experts suggest that over 30% of such spending is due to waste, overpricing, and sometimes fraudulent practices. This inefficiency hampers economic growth and diminishes the incentives for health-care competition, alongside delivering high-quality, low-cost care.
Massive inconsistencies in pricing for medical procedures, consultations, and treatments, coupled with intricate insurance claims and billing processes, leave patients bewildered and unable to make informed health-care choices.
Additionally, the absence of price transparency allows hospitals and health-care providers to impose exorbitant markups on services — typically averaging up to 7 times the actual cost of care.
Such issues can be addressed by promoting a culture of transparency, efficiency, and competition in the health-care sector.
To achieve this, the new administration should prioritize the disclosure of real health-care prices — a fundamental requirement for any competitive market that will inevitably exert downward pressure on expenses and eradicate inefficiencies.
Greater transparency regarding health-care prices, bills, and claims could potentially reduce federal spending by almost $1 trillion annually, as suggested by various estimates.
This figure is staggering, but aligns with multiple peer-reviewed studies that have uncovered considerable “administrative waste, inaccuracies, overpricing, and fraud” in the system.
Health-care price transparency would bolster accountability, efficiency, and competition among hospitals and providers, allowing that $1 trillion in needless overspending to be redirected back into the economy each year.
This would bring our costs closer to the spending levels of Europeans — without sacrificing health access, which we might face in a socialized medicine system akin to Europe’s.
On a broader scale, price transparency will reinforce free enterprise in the United States, diverting funds from the inflated medical-industrial complex, cutting out inflationary intermediaries, and fostering innovation and competition.
This principle of using transparency to promote lower prices and superior quality care was a priority for Trump during his first term.
In addition to signing executive orders on health-care price transparency and enhancing quality and efficiency, Trump laid the foundations through various congressional and agency policies, notably the 2019 Hospital Price Transparency Rule.
Regrettably, the Biden administration nullified many of Trump’s regulations, including the mandate for hospitals to publish their actual prices — and neglected to enforce the transparency rules.
However, with a unified Congress behind him and DOGE focused on injecting greater efficiency into our government, Trump now possesses a rare chance to reinstate and advance his transparency initiatives from his first term.
Now, he can take measures to motivate health-care institutions to lower prices while enhancing quality through vigorous competition and consumer choice.
We also hope Trump will make consumers more aware of health costs by expanding health savings accounts and high-deductible insurance options, encouraging patients to shop around for lower-cost alternatives.
Trump’s agenda must prioritize American patients and eliminate unnecessary costs from the health-care system.
Advocating for price transparency is a critical step toward reforming the vast American health-care system, stimulating the economy, and fostering a more efficient, accountable government.
Steve Forbes is chairman and CEO of Forbes Media. Steve Moore is co-founder of the Committee to Unleash Prosperity.