Before voters reelected Donald Trump, a music artist had been promoting a Trump health reform from his first administration – transparency in hospital pricing.
Starting in 2022, R&B artist Fat Joe has been pitching “Power to the Patients.” The public interest campaign calls for the enforcement of Trump’s rule requiring hospitals to post prices for all their services. The federally mandated rule took effect in 2021 and was supported by the Biden administration.
Fat Joe, who gained notoriety for his 2000s-era hit songs such as “What’s Luv” and “Lean Back,” has released videos, billboards, and ads informing the public about murky hospital pricing.
‘We Just Need the Prices’
Instead of making a public policy argument, Fat Joe gets straight to the point.
“Our health care system is robbing all of us,” Fat Joe states in one of his videos. “To every elected official and politician in America, the people stand united, desperate for you to listen. If you’re not advocating for prices and transparency in health care, you’re compromising every single American across this country because when we can’t see prices, hospitals, insurers, and their middlemen charge us whatever they want. Our very own health care system is robbing all of us. We just need the prices. That’s how our economy works!”
Not a Typical Market
The current health insurance system hides prices from patients and complicates decision-making, says Merrill Matthews, Ph.D., a resident scholar at the Institute for Policy Innovation.
“When you walk into a pharmacy, you see prices and sales on lots of drugs,” said Matthews. “But when you walk up to the counter to buy a prescription drug, there are no prices. Have you ever wondered why all over-the-counter drugs have prices that you as a consumer can see and compare, but not the behind-the-counter drugs? The difference is health insurance.”
Hiding prices behind insurance prevents patients from judging treatments based on their value.
“If you’re paying for those over-the-counter drugs out of your own pocket, you care about the price and you want the best value, so the drug makers compete on price and quality to attract your dollar,” said Matthews. “If insurance is paying for that prescription drug behind the counter, you have much less reason to be a value-conscious consumer.”
Insulated from Cost
Unlike other sectors of the economy, health care’s reliance on a third-party payer system protects companies that engage in overpricing, says Matthews.
“Health insurance insulates people from the cost of their health care,” said Matthews. “Generally speaking, what consumers really care about is not the actual cost but how much they have to pay out of their own pocket. Because most consumers don’t care about how much the insurance company has to pay, they don’t demand transparent prices like they do in every other sector of the economy.”
The hidden-cost system in health care causes extensive overutilization and overpricing, says Matthews.
“The biggest challenge to creating transparent health care prices is consumer apathy due to insurance coverage,” Matthews said. “Since the patient only pays a small portion of the price, that increases utilization and overall health care spending. Once a patient has met his copay or out-of-pocket deductible, he no longer cares how much the system spends,” said Matthews.
“Think of it this way: What would happen to spending for automobiles if car buyers could choose a small Buick or the top-of-the-line Lexus for the same $50 copay,” asks Matthews.
Pricey Secrets
The system cheats consumers of critical price information, says Katy Talento, executive director of the Alliance of Health Care Sharing Ministries and a former White House advisor on health care price transparency in Trump’s first administration.
“Imagine going into a restaurant and getting a menu with no prices,” said Talento. “When you ask the price, you’re instead told that the price varies based on which credit card you use and that you can only find out several months after your meal,” said Talento.
“We wouldn’t accept that at a restaurant, at Amazon, or anywhere else,” said Talento. “Even in the service industry, such as for lawyers or real estate agents, hourly rates or commission levels must be disclosed in advance.”
Closed Door Contracts
The current system forces patients to accept the terms of contracts to which they never agreed, says Talento.
“Prices are generally set by secret contracts between insurance companies and hospitals or doctors,” said Talento. “Patients, employers, and taxpayers are not parties to these contracts but are somehow expected to be bound by the terms therein, even though they have no access to such terms in advance. What ends up happening is that people need care, they seek and are provided that care, and then they’re shocked by an outrageous bill showing up in the mail a few months later.”
Broad Appeal
“Power to the Patients” targets a broad range of demographic groups. Other hip-hop artists and a NASCAR motorsports team have joined the campaign.
The broad appeal is not surprising. “Health care transparency is important to everyday people only in the sense that it sounds like something that should happen because it is standard in every other sector of the economy,” said Matthews.
Politicians have a hard time backing away from the message. “The good news is that ending secret health care prices is bipartisan, polling at 95 percent support among the American people, and it is next to impossible for the industry to openly fight against it,” said Talento. “They’re forced into the shadows, and that makes it easier to get good policies passed, because it’s difficult for any elected official to argue that health care prices should be secret.”
Jesse Hathaway (think@heartland.org) writes from Columbus, Ohio.
