As healthcare costs continue to squeeze family budgets, Congress remains locked in debate over extending enhanced COVID-era Obamacare insurance company subsidies that artificially lower premiums for some consumers. Rather than wait for band-aid proposals from Congress, President Donald Trump is taking decisive action to deliver real reforms that lower costs for all Americans — not just the ones on Obamacare.
Currently, seniors pay significantly more for services when visiting clinics owned by a hospital system, rather than an office that is independently owned and operated by a physician. Medicare Part B, which covers outpatient care, pays 170% higher prices for procedures, 30% higher prices for imaging services, and 20% higher prices for tests delivered in a hospital-owned facility compared to independently owned offices. Since seniors with Part B must pay a 20% coinsurance rate for every service they receive, these payment differences can add hundreds or thousands of dollars to a senior’s annual medical expenses. For example, a patient who visits a physician’s office to receive a spinal injection would pay $51. However, if the same patient visited a hospital-owned office for the exact same service, they would pay $148.
These preferential payment rates have encouraged large hospital systems to acquire thousands of physician offices. This influx has inflated the cost of care for seniors and taxpayers and has created healthcare monopolies. Between 2004 and 2024, the cost of healthcare in Medicare’s Part B rose 281%, increasing from $135 billion to $516 billion. Seniors have borne these rising costs through higher premiums and out-of-pocket fees. Industry consolidation has also led to higher premiums for patients with commercial insurance.
Fortunately, Trump’s administration is taking meaningful steps to address these hospital abuses. In late November, the Centers for Medicare and Medicaid Services announced that Medicare will equalize the payment rate between hospital-owned and independent physician offices for drug administration services. A 2023 analysis by the Actuarial Research Corporation estimates this reform will save cancer patients who receive chemotherapy drugs up to $1,055 every year in reduced out-of-pocket expenses.
CMS is also eliminating the agency’s overly prescriptive Inpatient Only List. In 2000, the agency established this list, which prohibits non-hospital facilities, such as ambulatory surgical centers and other outpatient clinics, from delivering over 1,700 surgical procedures to Medicare enrollees. The agency created this list to identify services that, in 2000, may have required patients to stay overnight in order to recover after their procedure. However, technological advances have enabled surgeons to safely deliver many surgical procedures without the need for patients to recover in a hospital.
Rather than bureaucrats dictating where care must be delivered, CMS will also allow physicians to use their medical judgment to determine the appropriate setting for each payment. Because ambulatory surgical centers have significantly less overhead than hospitals, this change will drive prices down. According to the House Ways and Means Committee, expanding access to outpatient surgical centers could reduce Medicare costs by $10 billion.
The agency also introduced new measures to strengthen Trump’s price transparency reforms. During his first term in office, CMS finalized a requirement for hospitals to disclose the prices that health plans pay for healthcare services in a consumer-friendly format on their websites. Hospital price transparency promised to show patients the real price of hospital care so they could choose providers that offer the best care at the lowest price. However, many hospitals chose to minimally comply with these requirements by posting complex mathematical equations from their insurer contracts, rather than showing the actual prices that insurers paid in a format that consumers could understand.
CMS’s new reforms will no longer allow hospitals to hide their prices behind algorithms. Instead, the agency will now require hospitals to disclose the median price that insurers have paid for a specific service over the past 12 to 15 months. This will allow consumers to comparison shop for care and reward hospitals that deliver affordable services. One analysis by Turquoise Health found that price transparency could reduce the cost of medical care for patients by 27%.
Congress can build on Trump’s solutions to ensure even more families benefit from affordable and transparent care. Ending Medicare’s wasteful enhanced payments to hospital-owned facilities would lower seniors’ out-of-pocket costs by $152 billion and reduce premiums for commercially insured families by $117 billion over 10 years. Lawmakers could also establish higher penalties on hospitals that keep patients in the dark on their prices. This will provide a strong financial incentive for health systems to treat their patients as valued customers instead of assets to strip mine.
For too long, government policy has favored large hospitals, insurers, and insiders at the expense of ordinary people. Trump is finally putting patients first by closing loopholes that inflate medical costs and empowering families to obtain more affordable care as informed consumers.
Bobby Jindal served as governor of Louisiana (2008–16) and as a U.S. assistant secretary of Health and Human Services from 2001–03. Charlie Katebi is deputy director of the Center for a Healthy America at the America First Policy Institute
