Executive Order Advances Price Transparency Efforts to Lower Health Care Costs

As part of the “Make America Health Again” Movement, President Donald J. Trump signed an executive order (EO) aiming to enforce stricter price transparency standards in the health care industry to help lower costs for Americans. The EO builds on efforts from his first term that forced health insurers and hospitals to disclose detailed prices for prescriptions and services.¹

Stethoscope on US dollar bills | Image Credit: © Kuzmick - stock.adobe.com

Health care costs continue to be a central issue in America, exacerbated by rising rates of chronic illness that put additional strain on an already overburdened system. As costs escalate, it is more crucial than ever to address this growing challenge. Lack of price transparency has emerged as a significant problem in health care accessibility and affordability, preventing patients from receiving critical, life-saving treatments. By addressing price transparency, lawmakers and health agency heads hope to reduce cost burdens and lower prices for patients.

“Why can't we just take the person who writes the book and get them closer to the person who reads the book?” posed Chris O’Dell, senior vice president of market solutions at Turquoise Health, in an interview with Pharmacy Times. “That's what I hope price transparency does for drugs—manufacturers make a drug and want to get it to the patient who needs it. But along the way, middlemen demand rebates, discounts, and markups. I’d love for the data to start by revealing who’s making what at each step and where there’s excess."

Signed in 2019, EO 13877, called Improving Price and Quality Transparency in American Healthcare to Put Patients First, instructed government agencies to start developing rules and guidelines that would mandate that hospitals, physicians, insurers, and other industry participants disclose information regarding the negotiated cost of care. According to the order, health plans were required to post their negotiated rates with providers, their out-of-network payments to providers, and the actual prices they or their pharmacy benefit manager pay for prescription drugs; and to maintain a consumer-facing internet tool making price information accessible. Insurers could be required to meet such guidelines under the Health Insurance Portability and Accountability Act as well as the Employee Retirement Income Security Act.^1-3

The EO was met with criticism and hospital groups fiercely opposed it, asserting that it required them to reveal confidential discussions with insurers, thereby undermining competition and infringing upon First Amendment rights. Although they attempted to challenge the EO, the challenge was eventually rejected by the court.²

The 2025 EO, titled Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information, was signed on February 25, 2025, and is a continuation of the 2019 EO’s efforts to improve price transparency between patients, hospitals, and insurers. It asserts that within 90 days of the order, federal agencies must (1) require the disclosure of actual prices of items or services; (2) issue updated guidance to ensure pricing information is standardized and easily comparable across hospitals and health plans; and (3) issue guidance updating enforcement policies to ensure compliance with transparent reporting of data.¹

“This [EO] happens to be one that has bipartisan support, which means that it has endured and had more of an implication than other ones, perhaps. It originally came out in 2019 as a Trump [EO]. The Biden administration came in and said, ‘This is good stuff. We're going to enforce it,’” explained O’Dell. “And in that period, we went from 0% compliance to 95% or better compliance on the payroll hospital side. And now Trump's coming back and saying, I'm going to really double down on this, and you have to publish all your drug rates.”

According to the Fact Sheet, the 2025 EO has 3 objectives⁴:

• Empower patients through radical price transparency: This directs the Departments of Treasury, Labor, and Health and Human Services to implement and enforce price transparency regulations as set forth by the administration. This includes the mandated disclosure of actual health cost overestimates.
• Lower costs for American families: This establishes how the lack of price transparency enables corporate entities like hospitals and insurance companies to profit at the expense of patients. Improving price transparency, in turn, will lower costs and help patients find the best prices for care.
• Deliver on promises to put American patients first: This states that the Trump administration is dedicated to lowering health care costs and continuing the efforts of EO 13877.

The EO aims to help patients make more informed decisions about their care through clearer pricing structures so patients can better understand the true cost of their treatments and compare options across different providers. This approach is intended to empower patients, as well as introduce greater competition into the system, encouraging providers and insurers to adopt more patient-friendly pricing models.^1,4

Coins on hospital bill, patients discuss costs | Image Credit: © Attasit - stock.adobe.com

“I think it's still too early to say that price transparency leads to more affordable drugs, or really more affordable anything, but, there's a lot of ways that this is being used,” explained O’Dell. “Health systems are using this data. Insurance companies are using this data. Pharmaceutical companies are using this data. Employers are, frankly, using this data. And some of them are doing cool things that help do what the law was intended to do, which is make it so that people understand what they're going to spend on health care before they have the service. That's really what all these laws are about.”

The shift toward greater transparency is not without its challenges. Although many support lowering health care costs, the path to full implementation is complex. Insurers, pharmaceutical companies, and hospitals have historically operated with limited price disclosure, and changing these long-standing practices will require overcoming significant resistance. Additionally, lowering health costs requires more than just price transparency to yield the kind of substantial changes that patients need; it requires larger reform across the entire healthcare system, including payment models, regulatory frameworks, and the integration of technology to support streamlined, patient-centered care.

REFERENCES

1. Making America healthy again by empowering patients with clear, accurate, and actionable healthcare pricing information. The White House. February 25, 2025. Accessed March 14, 2025. https://www.whitehouse.gov/presidential-actions/2025/02/making-america-healthy-again-by-empowering-patients-with-clear-accurate-and-actionable-healthcare-pricing-information/

2. Trump signs healthcare price transparency executive order. Reuters. February 25, 2025. Accessed March 14, 2025. https://www.reuters.com/world/us/trump-signs-price-transparency-executive-order-2025-02-25/

3. Trump to issue executive order seeking transparency on healthcare costs: Wall Street Journal. Reuters. June 20, 2019. Accessed March 14, 2025. https://www.reuters.com/article/business/healthcare-pharmaceuticals/trump-to-issue-executive-order-seeking-transparency-on-healthcare-costs-wall-st-idUSKCN1TL2FJ/

4. Fact Sheet: President Donald J. Trump announces actions to make healthcare prices transparent. The White House. February 25, 2025. Accessed March 14, 2025. https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-announces-actions-to-make-healthcare-prices-transparent/