Anyone who has tried to shop around for hospital services knows this: It’s hard to get prices in advance.

President Trump signed an executive order Monday that he says would make such comparisons easier, and make the pricing process more transparent.

The order directs agencies to draw up rules requiring hospitals and insurers to make public more information on the negotiated prices they hammer out in contract negotiations. Also, hospitals and insurers would have to give estimates on out-of-pocket costs to patients before they go in for nonemergency medical care.

“This will put American patients in control and address fundamental drivers of health care costs in a way no president has done before,” said Health and Human Services Secretary Alex Azar during a press briefing Monday.

But just how useful the effort will prove for consumers remains unclear.

If the executive order leads to finalized HHS rules, proponents say it could encourage competition and lower prices.

Other health care analysts say much depends on how the administration writes the rules over the next several months — rules that govern what information must be provided and in what format. Trump’s executive order already is running into opposition from some hospitals and insurers who say disclosing negotiated rates could drive up costs.

As health care consumers await more details on those rules, here’s what we know:

Q: What does the order do?

It may expand price information consumers receive.

The order directs agencies to develop rules to require hospitals and insurers to provide information “based on negotiated rates” to the public.

Currently, such rates are hard to get, even for patients, until after medical care is provided. That’s when insured patients get an “explanation of benefits,” which shows how much the hospital charged, how much of a discount their insurer received and the amount a patient may owe.

In addition to consumers being unable to get price information upfront in many cases, hospital list prices and negotiated discount rates vary widely by hospital and insurer, even within the same region. Uninsured patients often are charged the full amounts.

“People are sick and tired of hospitals playing these games with prices,” says George Nation, a business professor at Lehigh University who studies hospital contract law. “That’s what’s driving all of this.”

Some insurers and hospitals do provide online tools or apps that already can help individual patients estimate out-of-pocket costs for a service or procedure ahead of time. But research shows few patients use such tools. Also, many medical services are needed without much notice — think of a heart attack or a broken leg — so shopping for price simply isn’t possible.

Administration officials say they want patients to have access to more information, including “advance EOBs” that outline anticipated costs before patients get nonemergency medical care. In theory, that would allow consumers to shop around for lower cost care.

Q: Isn’t this information already available?

Not exactly. In January, new rules took effect under the Affordable Care Act that require hospitals to post online their “list prices.” These are prices hospitals set themselves, and have little relation to actual costs or what insurers actually pay.

What’s resulted are often confusing spreadsheets that contain thousands of a la carte charges — ranging from the price of medicines and sutures to room costs, among other things — that patients have to piece together (if they can) to estimate their total bill. Also, those list charges don’t reflect the discounted rates insurers have negotiated, so they are of little use to insured patients who might want to compare prices from hospital to hospital.

In theory, at least, the information that would result from Trump’s executive order would provide more detail based on negotiated, discounted rates.

A senior administration official at the press briefing said details about whether the rates would be aggregated or relate to individual hospitals would be spelled out only when the administration puts forward proposed rules to implement the order later this year. It also is still unclear how the administration would enforce the rules.

Another limitation to the executive order: It applies only to hospitals and the medical staff they employ. Many hospitals are staffed by doctors who are not directly employed, or rely on laboratories that are also separate. That means negotiated prices for services provided by such laboratories or physicians would not have to be disclosed.

Q: How could consumers use this information?

In theory, consumers could get information in advance that would allow them to compare prices for, say, a hip replacement or knee surgery.

But that could prove difficult if the rates are not fairly hospital-specific, or if they are not lumped in with all the care needed for a specific procedure or surgery.

“They could take the top 20 common procedures the hospital does, for example, and put negotiated prices on them,” says Nation. “It makes sense to do an average for that particular hospital, so I can see how much it’s going to cost to have my knee replaced at St. Joe’s versus St. Anne’s.”

Having advance notice of out-of-pocket costs could also help patients who have high-deductible plans.

“Patients are increasingly subject to insurance deductibles and other forms of substantial cost sharing. For a subset of so-called ‘shoppable services’, patients would benefit from price estimates in advance that allow them to compare options and plan financially for their care,” says John Rother, president and CEO at the advocacy group National Coalition on Health Care.

Q: Would the availability of this extra information push consumers to shop for health care?

The short answer is maybe.

“The evidence to date shows patients aren’t necessarily the best shoppers, but we haven’t given them the best tools to be shoppers,” says Lovisa Gustafsson, assistant vice president at the Commonwealth Fund.

Posting negotiated rates might be a step forward, she says, but only if the information is easily understandable.

It’s also possible that insurers, physician offices, consumer groups or online businesses would find ways to help direct patients to the most cost-effective locations for surgeries, tests or other procedures based on the information.

“Institutions like Consumer Reports or Consumer Checkbook could do some kind of high-level comparison between facilities or doctors,” says Tim Jost, a professor emeritus at the Washington and Lee University School of Law.

But some hospitals and insurers maintain that disclosing specific rates could backfire.

Hospitals charging lower rates, for example, might raise them if they see competitors are getting higher reimbursement from insurers. And insurers say they might be hampered in their ability to negotiate if rivals all know what they each pay.

“We also agree that patients should have accurate, real-time information about costs so they can make the best, most informed decisions about their care,” said the lobbying group America’s Health Insurance Plans, in a written statement. “But publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients and taxpayers.”

Kaiser Health News is a nonprofit, editorially independent program of the Kaiser Family Foundation, and is not affiliated with Kaiser Permanente.

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Updated 4:03 p.m.

President Trump signed an executive order Monday on price transparency in health care that aims to lower rising health care costs by showing prices to patients. The idea is that if people can shop around, market forces may drive down costs.

“Hospitals will be required to publish prices that reflect what people pay for services,” said President Trump at a White House event. “You will get great pricing. Prices will come down by numbers that you wouldn’t believe. The cost of healthcare will go way, way down.”

Like several of President Trump’s other health policy-related announcements, today’s executive order doesn’t spell out specific actions, but directs the department of Health and Human Services to develop a policy and then undertake a lengthy rule-making process.

“The president knows the best way to lower costs in health care is to put patients in control by increasing choice and competition,” HHS Secretary Alex Azar said at a phone briefing for reporters Monday morning.

Azar outlined five parts of the executive order, two of which are directly related to price transparency.

It directs the agency to draft a new rule that would require hospitals to disclose the prices that patients and insurers actually pay in “an easy-to-read, patient-friendly format,” Azar said.

The new rule should also “require health care providers and insurers to provide patients with information about the out-of-pocket costs they’ll face before they receive health care services,” he added.

The idea is simple. Health care is an industry where consumers don’t have access to the kind of information they have when making other purchasing decisions. The executive order could — if it leads to finalized, HHS rules — pressure the industry to function more like a normal market, where quality and price drive consumer behavior. Some consumer advocates welcomed the move.

“Today patients don’t have access to prices or choices or even ability to see quality,” said Cynthia Fisher, founder of a group called Patient Rights Advocate. “I think the exciting part of this executive order is the President and administration are really moving to put the patient in the driver’s seat and be empowered for the first time with knowledge and information.”

Exactly how the rules the executive order calls for would work is still to be determined, administration officials said.

Push back from various corners of the healthcare industry came quickly, with hospital and health plan lobbying organizations arguing this transparency requirement would have the unintended consequence of pushing prices up, rather than down.

“Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher — not lower — for consumers, patients, and taxpayers,” said Matt Eyles, CEO of America’s Health Insurance Plans in a statement. He says it will perpetuate “the old days of the American health care system paying for volume over value. We know that is a formula for higher costs and worse care for everyone.”

Some health economists and industry observers without a vested interest expressed a similar view. Larry Levitt, senior vice president for health reform the Kaiser Family Foundation, tweeted that although the idea of greater price transparency makes sense from the perspective of consumer protection, it doesn’t guarantee lower prices.

“I’m skeptical that disclosure of health care prices will drive prices down, and could even increase prices once hospitals and doctors know what their competitors down the street are getting paid,” Levitt wrote.

This executive order is the latest in a series of moves from the Trump administration on health care price transparency recently. As NPR reported, just last month the White House announced its legislative priorities for ending surprise medical bills, which included patients receiving a “clear and honest bill upfront” before scheduled care. That same week, HHS announced a final rule requiring drugmakers to display list prices of their drugs in TV ads.

However, several of President Trump’s past health care announcements have gotten tied up before the promises to lower costs could be realized.

For instance, in May 2018, Trump rolled out a Blueprint To Lower Drug Prices which included a variety of proposals intended to reduce pharmaceutical costs to individuals, the industry and the economy as a whole, as NPR reported.

In October of last year, the Centers for Medicare and Medicaid Services proposed an international pricing model for setting what Medicare Part B would pay for certain drugs. This is the closest the Trump administration has come to Trump’s campaign promise to have Medicare negotiate with drug companies.

The proposal was put out for public comment with a December 2018 deadline. Thousands of comments came in, including a lot of pushback from the pharmaceutical industry and the proposed rule has not yet been finalized and it’s not clear it ever will be.

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