Basic Economics: Trump Administration Lowering Healthcare Costs, Debunking Socialism


Why are people – Republicans and Democrats, old and young – so concerned about healthcare costs, about securing pre-existing condition insurance, about affordable diagnosis and treatment (i.e. medicine, surgery, therapy)?  The answer is painfully obvious – and not so obvious. 

As mere mortals, we worry about day-to-day functionality, productivity, and pain relief.  We worry about state of mind and quality of life, “being there for others” and longevity.   As a result, we monitor our health, try to maintain it, and always watch costs. That part is human and unchanging.

Another source of concern about healthcare costs, however, lies elsewhere.  That part is controllable, not by the government – but by having government to get out of the way.  That source is uncertainty – about actual prices for medical products, procedures and services, access to accurate quality comparisons, assessing hidden risks, costs, distorted incentives (i.e. to over-prescribe, over-medicate, under-evaluate, perform unnecessary surgery, require unnecessary appointments, secure unnecessary referrals). 

In short, uncertainty about the healthcare market – lack of transparency in how it operates, where prices and protocols come from – is unnerving and frustrating, a source of recurring stress for many Americans, especially as they grow older. 

Interestingly, it is also an avoidable source of stress – one the Trump Administration is courageously tackling it head- on.  The Administration is deliberately, persistently and to good effect – disrupting the status quo.  They are taking the cover off seldom reviewed and never reformed established practices. 

Specifically, they are shining a bright light on medical care prices, potentially “requiring hospitals, doctors and other healthcare providers to publicly disclose the secretly negotiated prices they charge insurance companies for services, a move that would expose for the first time the actual cost of care,” according to the Wall Street Journal. 

This conviction by the Trump Administration is revolutionary.  It upends the long-secret relationship between insurers and providers, where prices, discounts, rebates and rewards for continued business lurked in shadows, invisible to consumers who paid for provider and insurer profits through mark-ups, undisclosed reductions to providers, and “sweetheart deals” never passed on to the consumers. 

Moreover, this lack of transparency between insurers and providers, leaving consumers in the dark as to key information for healthcare cost and quality comparison, has been – in economic terms – an avoidable rigidity.  It creates unaccounted-for “transactions cost” that is quietly passed along unknowingly (and to now, unknowable) to consumers.

What happens when a market is quietly distorted in this way?  When knowledge is denied to the consumers, as others profit from consumer ignorance in making choices (or even knowing they have a choice)? 

The answer is two things happen.  First, the consumer pays more for things about which he or she knows less, or may know nothing at all in terms of pricing.  That is, consumers are denied information to make informed choices about their own healthcare.  This is because lack of open competition keeps prices high; restored competition would lower prices and make providers again focus on the consumer.

Second, this “in the dark” pricing allows ill-informed, politically motivated pro-government forces to argue for “Medicare for All,” “Single Payer” socialism, and ending individual choice, by howling that prices are too high. 

Actually, if we were to incentive price reduction by more open competition, transparency and mandating public disclosure of secret inter-industry deals and rates, prices would fall, quality rise, and focus would shift from pleasing insurers and the government to pleasing individual consumers again. 

That, in a nutshell, is what the Trump Administration is now proposing – and pushing hard via the Department of Health and Human Services.   They are saying that patients – consumers – have “a right to see the discounted prices in advance of obtaining care,” likely changing the incentive mix behind a formerly closed curtain.

In the end, what consumers deserve is the information to make informed choices, and the right to those choices.  We have this when buying food, clothes, cars and houses.  It is about time we got it in healthcare, and once we do – we can worry a little less.  Reducing consumer uncertainty, spurring competition, reducing prices while keeping quality high – and giving socialism the lie – is a net positive.  The Trump Administration is again at work, in ways that benefit average Americans.

If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter!

Sign Up Today
Read more articles by Robert B. Charles
Notify of
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
1 year ago

We would not know this if it were not from AMAC and Fox news spreading good news

Barbara Smith
1 year ago

I would like to suggest that AMAC come up with it’s own newspaper in order to get even more communication out to the public. I’m thankful
for AMAC and for the other “truth” telling medias, but we need to reach out even further to the public, to the USA.

1 year ago

Trump is shoveling out the stables, but the dems are filling them right back up, but not before arguing BOTH that free markets filled them up or that theresno problem anyway. Its amazing what they can get away with by having 90% of the media in their camp. Lets hope Trumps prodigious efforts can take effect in time to sway low information folks.

1 year ago

When Medicare can “shop around” for the cheapest medications then we will be doing something. They are not allowed even to bargain with the drug companies, yet we pay hundreds more for a certain drug that you can buy in another country for $10.00. It is the same drug made by the same company.

Jo Strevel
1 year ago

I am tired of being afraid of getting sick because I don’t know how much it is going to actually cost me. Even with insurance I don’t know how places stay in business when you get a bill for services and the insurance company writes off the majority of it because you used a provider in network. I wish big pharma and government would stay out of things and let people alone. I am proud of President Trump and the roll he has played in trying to put decisions back in the hands of the people who are dealing with… Read more »

1 year ago


Diane Tyson
1 year ago

My friends and I often discuss this very subject and recall that 50 years ago we were able to pay for our own everyday medical costs, including giving birth. It was not a prohibitive expense, easily saved over the months of pregnancy with only one income per household. It seemed to be when companies started offering medical insurance as a hiring incentive that the slippery slope began. So it has been very obvious to us that the problem of outlandish medical costs started with insurance companies colluding with the medical community. And how it has come to be a requirement… Read more »

1 year ago

Great article, but only part of the story. There are other ways to bring prices down. This little reply box isn’t the venue to write about how to lower prices. However the basic law of economics is supply and demand. The AMA and medical schools limit the number of primary care doctors, who are the backbone of the health care system. They also limit what a primary can do. Many simple functions that primaries used to do are now mandated for specialists thus driving up costs. Other areas are what it costs Doctors for “coding and malpractice insurance. I’m sure… Read more »

1 year ago

I’ve been asking doctors for a very long time why they say, “You’ve got to sign it before you can see what’s in it!” (sound familiar?) It is simply absurd that a medical “expert” can’t tell me even an estimate of cost when my mechanic is REQUIRED and willing to do so with my car. Thank you President Trump for stepping in and exposing this lousy business practice in the medical field.

Thomas H
1 year ago

Lowering prices for healthcare? I predict democRats rigorously opposing that!

1 year ago

Won’t this put a big crimp in the millions of $ the politicatians are now getting?
Might be some resistance.

Robert Palmiter
1 year ago

Hopefully the Trump administration can accomplish this.

shawn r.
1 year ago

My med’s/prescription costs are lower this year than any other year since 2014 (The start of Obama’s Affordable Care). I have to go back to 2013 to find lower costs.

1 year ago

Cost transparency will be a big driver in reform of healthcare. It’s one of the bigger costs to a household yet we have no idea what actual costs really are until after we’ve given consent. This is unamerican. I had an MRI that I paid for out of pocket that cost $250 with a facility that could give up front pricing. I found this facility after I tried to use my healthcare affiliated facility that said the test alone would cost $800 but no one had any idea what the cost would be for the the doctor to read the… Read more »

1 year ago

Thanks for explaining these costs situations.the thing that really ticks me off is. We do have single payer insurance, don’t we? How about the Congress & their staff. How about the Military who pays their bills for life? How about the President & V.P. , Supreme Court isn’t this all SINGLE PAYER? Give us the truth why do we have this system, why all Citizens on the same insurance! I realize that those with Government Responsibilities are a hell of a lot smarter than us peons, but let’s treat everyone the same!!!’

Paul Jones
1 year ago

I totally agree with all of this. Give the consumer back his/her choices, and remove this “curtain” so we can take care of ourselves with good healthcare choices and costs. The consumer has been left out in the dust because he/she is not the customer any more, but the financier for it.

Frank S.
1 year ago

Open free-market competition and transparency…what a concept! The Democrat’s (and socialist’s) solution? Even more government control and even less transparency. The contrast couldn’t be starker, yet these fools keep getting elected…..

1 year ago

I believe President Trump would have solved this problem already. The Democrats took away two years with the Russia collusion distraction. I think they should give back and reinstate that wasted time.

Ann Dilorenzo
1 year ago

I wrote positive thoughts twice. Both times I received a msg that my post could not be shared at this time. Is FB blocking support for AMAC?

Robert N
1 year ago

I feel very strongly that tax free savings accounts for healthcare AND the eliminations of taxes on healthcare AND moving from a profit-based healthcare system to a compassion-based (non-profit) and profit mixed system is best. This moves the buying choice and power back to the consumer and also allows the non-profit charity based organizations to thrive. I would like to see a 105% write off for non-profit hospitals to promote them. I strongly feel that we should be able to move our government benefits from the government into healthcare savings accounts that can be used by us to care for… Read more »

Would love your thoughts, please comment.x