PRICES FUNCTION TO ALLOCATE RESOURCES.

That becomes easier when shoppers know what the relevant prices are, and a proposed rule change will help patients.

The Trump administration on Friday unveiled new rules to require increased disclosure of health care prices, in a move officials said would drive down costs by increasing competition.

One regulation would require hospitals to provide a consumer-friendly online page where prices are listed for 300 common procedures like X-rays and lab tests. A second regulation would require insurers to provide an online tool where people could compare their out-of-pocket costs at different medical providers before receiving treatment.

That gets messier once third parties are involved, as all the administrative impedimenta means nobody knows what the price of a colonoscopy is.  To a first approximation, though, the squawking from the rent-seekers suggests the Executive is on the right track.

Indeed, hours after the announcement, the American Hospital Association, along with other provider groups, announced it would sue to stop the rule.

"Instead of helping patients know their out-of-pocket costs, this rule will introduce widespread confusion, accelerate anticompetitive behavior among health insurers, and stymie innovations in value-based care delivery," the groups said.

Insurers have argued that price transparency could actually drive prices higher if low-cost hospitals can see that competitors are getting higher prices, and seek to raise them. Azar called that argument a “canard” and said in every other industry, price competition drives prices lower, not higher.

Larry Levitt, a health policy expert at the Kaiser Family Foundation, said there could be a problem with enforcement of the new rule.

"While the Trump administration's new hospital price transparency requirement is quite sweeping, the enforcement of it is quite weak — a maximum fine of $300 per day," he wrote on Twitter. "The technical term for that is 'chump change.' I wonder how many hospitals will just pay the fine."

That's why we have public comment periods for proposed regulations. Perhaps a higher fine or some analyses of price leadership before the rule takes effect will be in order.  Somehow motorists make do with prices posted at gasoline stations, even if on occasion everybody on the corner raises at the same time.

As part of the public comment, perhaps patients, providers, and intervenors will have opportunities to deconstruct the insurance cartel that traffics under the rubric of "in network."