Hospitals keep dodging price transparency rules, leading Trump to take action — again

For 17 years, Michelle Arroyo did everything she could to keep her son alive after he’d been diagnosed with brain cancer at 6 years old. The single mom from California moved from Orange County to Los Angeles to be closer to the best doctors and medical facilities, quit her job in real estate to care for her son around-the-clock and liquidated all her financial assets, including her retirement account.

But despite her best efforts, Arroyo’s son, Grayson Arroyo-Smiley, died in 2023 at 22 years old, leaving Arroyo distraught and saddled with mounting medical bills that soared, she said, into the millions. She was also left with a feeling that she’d been swindled by health care companies into having to pay both physically and emotionally for wanting the best for her son.

“The process is just so overwhelming,” Arroyo said, describing her experience in dealing with the growing number of bills and phone calls with insurance companies.  

“It was like going through this in the dark,” she said. “You never knew what you were going to get. When you are trying to save a loved one’s life, you are not going to ask prices.”

Had she known about those prices up front, Arroyo said, she would have been better able to make more informed decisions about care.

For several years, the federal government has been pushing for more price transparency from hospitals. In 2019, during his first term, President Donald Trump signed an executive order aimed at improving price transparency by requiring hospitals and insurers to disclose health care costs upfront. As a result, the Hospital Price Transparency rule went into effect in 2021. The rule made it mandatory for hospitals to post standard charges for their services on their websites.

Compliance, however, has been lacking: One study published in 2022 in the Journal of the American Medical Association found that fewer than 6% of hospitals were fully compliant with the rule. A 2024 report from the inspector general of the Department of Health and Human Services found that just under two-thirds of hospitals sampled complied.

This came despite President Joe Biden signing his own executive order in 2021 to tighten enforcement by fining hospitals that did not comply. When that order went into effect the following year, some hospitals continued to ignore the rules outright, while others accepted the fines, which were capped at $5,500 a day.

Trump is once again trying to increase compliance. In late February, he signed an executive order directing the Departments of Treasury, Labor, and HHS to develop a plan in the next three months to enforce the price transparency rule.

Arroyo said that if this kind of information had been available to her, she would have been able to better financially manage her son’s health care needs and ensure she was getting the value she desired.

“If the prices were posted for me,” she said, “I would compare the prices I got versus what others got. The fact that others get different prices, it’s not right.”

Arroyo estimated that in the last 10 years of her son’s life, she spent hundreds of thousands on one medical supply that cost about $500 a month and fell outside of her insurance’s coverage. She recalled getting another medical bill for $1.5 million for less than 90 days of a five-month stay that her son spent in the ICU. The bills, she said, seemed to never end. Though insurance covered most of them, she says, she consistently had to negotiate the prices down. Today, she said, she is still paying off $14,000 of medical debt.

Because of her professional experience in negotiating real estate contracts, she was able to haggle some services down, but she questions how others could manage a similar experience.

“If you don’t have that information, how can you do it?”

Experts are split over price transparency’s effectiveness

Advocates of Trump’s order believe that more transparency in health care prices will lead to increased competition for hospitals and insurers, which, they say, will drive down costs for consumers.

“The bad news is for hospitals who charge rates that are higher than they should be in the markets they’re in — this rule change will likely increase scrutiny, and hopefully competition, for them,” said James Gelfand, president and CEO of the ERISA Industry Committee, a national nonprofit organization that represents large employers that pay for their own health insurance.

“If it works the way the administration hopes it will, those outliers will reduce prices to be more competitive, potentially saving patients and employers tens of billions of dollars over the next decade,” Gelfand said. The order will benefit patients and employers with “more, better data that can be used to get the best care at the best prices,” he added.

There’s already some evidence that’s already happening.

Ge Bai, a professor of accounting and health policy at Johns Hopkins University in Baltimore, noted that the costs from some hospitals have already dropped due to the 2019 price transparency rule, pointing to a recent analysis from Turquoise Health, a health care pricing platform.

Other public health experts, however, are wary that one executive order alone can serve as a magic bullet to the challenges in health care cost transparency that have saddled the industry for decades.

“I don’t think there is any downside, but I don’t think there is any upside either,” said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, who contends that comparing prices in practice for consumers becomes both laborious and complex when it’s based on averages and “no one understands how it works.”

Nearly 100 million Americans — or 1 in 4 adults — are hampered by more than $220 billion of medical debt that they cannot afford, according to the Consumer Financial Protection Bureau. 

If the Trump administration can effectively enforce the rule, the beneficiaries will be financially disadvantaged patients, regardless of race, who will gain the most from price competition, while higher-priced hospitals will be harmed the most, public health experts said.

“There is huge public support for this initiative,” Bai said.

Some of that support comes from an unlikely source: the rapper Fat Joe.

The Bronx-born hip-hop artist is an ambassador for the nonprofit Power to the Patients, an advocacy group that pushes for accessible health care. Through PSAs, public art installations and in-person events, the organization since 2021 has pushed for more price transparency.