Federal District Court Judge Carl Nichols delivered a stunning victory to HHS and President Trump today by smacking down the lawsuit brought by five of the major hospital associations against the HHS price transparency rule. 

The rule, set to go live January 1, 2021, will require hospitals to post their negotiated rates with all payers for all items and services, on a public web site. The idea is to allow patients, and especially employers and other purchasers of care to make value assessments in advance. 

More important, the data will be available for the first time to the public, for free, allowing innovators to design user-friendly platforms and analytics that can facilitate disruptive health care purchasing models, such as direct contract networks, cash-pay models, medical bidding and other ideas that burn down the broken payment model of Big Insurance, in league with Big Hospitals, in league with Big Brokers, in league with Big Pharma, in league with Big PBM/GPOs, in league with… all at the expense of the disempowered patients and other purchasers. 

In no other industry can the sellers of a product conspire together to cook up secret pricing contracts that they hide from the buyers. Price transparency is to economics what gravity is to physics. It facilitates the operation of all the other laws – competition lowering prices, supply matching demand, and so forth. Congratulations to President Trump, Secretary Azar, and AG Barr for arguing robustly to defend this commonsense and overwhelmingly popular (88%!), bipartisan policy.