One in eight Americans borrowed money to pay for health care in the past year
has been promising to bring down health-care costs ever since he announced his campaign for the White House. So far his policies have had the opposite effect. As contenders to stand against him in 2020 have begun to refine their pitches on health, he has at last done something to keep his promise. On June 24th Mr Trump signed an executive order requiring hospitals to disclose the prices they have negotiated with insurance companies.
One way it could do so is if people use it to price-shop. An estimated 30-40% of America’s health-care spending goes on things considered “shoppable”, meaning that the situation is not urgent and there is a choice of medical providers. But almost all this expenditure is paid by insurers, meaning patients have no incentive to shift to lower-price providers.
According to a study in 2017 by the Commonwealth Fund, a think-tank, 90% of metropolitan areas in America have hospital markets that federal competition authorities would call “highly concentrated”, meaning that there is very little competition. Although the insurance market is also highly consolidated at local level, that rarely gives insurers the upper hand in bargaining with medical providers.
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