My prime focus for my first six months in Washington has been to bring transparency to our opaque and misaligned U.S. health care market. President Donald Trump recently invited me to the White House to participate in the signing of his executive order that will push the health care industry to be much more transparent when it comes to actual pricing and quality, putting Americans in the driver’s seat and significantly lowering the cost of health care.
Specifically, President Trump’s executive order requires hospitals to disclose publicly negotiated prices that reflect what people actually pay for services and requires insurers to provide hard figures on any out-of-pocket spending patients will be on the hook for before they receive care. This will help health care consumers navigate the health care system the way they do in other markets.
For too long, the big health care industry has been the dictionary definition of a cartel: “a combination of independent commercial or industrial enterprises designed to limit competition or fix prices.” I’ve spent my life in the business world, and there’s no other industry I know of where you can buy a good or service and have no idea what it costs.
Earlier this year I wanted to see how much the price for a prescription can vary, even in a small town like my hometown of Jasper, Ind. Between the two pharmacies I pass going to work in the morning, the exact same drug paid for out-of-pocket could be either $30 per prescription or $10. I’m used to operating in well-functioning markets with meaningful price signals that drive the allocation of resources, encourage competition, create efficiency, and allow consumers to make informed decisions about how to use their buying power: This is no market at all.
In the Senate, I’ve introduced several measures intended to correct the fundamental problems with the broken health care market. The first of these, the True Price Act, is intended to help consumers better anticipate, measure, and compare health care costs—a measure which compliments President Trump’s recent executive order on health care transparency. This legislation would require commercial health insurers to disclose to consumers the negotiated rates—including any cost-sharing obligations for consumers—for health care services covered under their health plans. Insurers usually negotiate steep discounts to inflated health care provider prices that are not seen by consumers.
Another proposal, introduced with Sen. Tammy Baldwin (D-Wis.), the FAIR Drug Pricing Act, would provide systematic transparency and accountability to the prescription drug market by requiring drug makers to report on, and justify, significant price increases for certain drugs. This legislation—which was included in the Lower Health Care Cost Act of 2019 passed by the Senate Health Committee in June—is a solid stride towards adding more transparency and accountability to the prescription drug market.
I’m also working with Sen. Mitt Romney (R-Utah) to pass legislation intended to ensure that any cost-sharing expenses coming out of consumers’ pockets to pay for drugs are based on negotiated prices (i.e. after rebate prices)—not inflated list prices. This legislation is intended to provide consumers with immediate relief from high-cost sharing obligations until we can bring drug prices down for good.
President Trump, his administration, and the Senate Health, Education, Labor and Pensions Committee should be commended for their significant efforts this week to try to fix the problems with our broken health care system and bring down costs. By requiring drug companies, insurance companies, and hospitals to disclose real prices, the president’s executive order will create more competition and ultimately bring down prices. And the Senate Health Committee’s Lower Health Care Cost Act, though it has a few items of concern, is a significant bipartisan package filled with reforms that will truly bring down costs and add transparency into our currently opaque health care system.
If we can include consumers in the negotiation by giving them some skin in the game – encouraging them to shop around for prices like we do for car insurance and big screen TVs – then competition will do what it does in all other industries: lower prices.
I encourage Congress to join President Trump in taking on the health industry by enacting legislation this year to shed light on the opaque, arcane, and clumsy health care system that is currently costing American consumers dearly.
Braun is a member of the Health, Education, Labor and Pension Committee.