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Three things Trump can do right now to lower health-care costs

  • The failed Obamacare repeal and replacement efforts prove that Washington cannot make major changes to health insurance policy right now.
  • But the president can institute three key policies on his own that would make a significant difference in health costs.
  • They include allowing for insurance to be sold across state lines, tightening regulations on hospitals and making health prices more public.
President Donald Trump delivers remarks to reporters as he meets with members of the House Ways and Means Committee about proposed changes to the U.S. tax code at the White House in Washington, U.S. September 26, 2017.
Jonathan Ernst | Reuters
President Donald Trump delivers remarks to reporters as he meets with members of the House Ways and Means Committee about proposed changes to the U.S. tax code at the White House in Washington, U.S. September 26, 2017.

Another month, another failed Republican attempt to repeal and replace Obamacare.

So now what?

If the goal is to once again overhaul health-insurance rules, change minimum coverage requirements, end individual and employer mandates, outlaw premium increases, and mess with the Affordable Care Act tax penalties, the GOP should by all means play the legislative waiting game and try again early next year.

But to be frank, mapping out the Republican or Democratic Party's legislative strategies isn't really a worthwhile use of a non-party operative's time. It may not be a worthwhile use of time for anyone. What America really needs is more time spent on our real problem, which is the growing cost of health care.

The good news is that making a dent in health-care costs isn't as impossible as reinventing the wheel of national health-insurance legislation. Here are three things President Donald Trump can do right now without needing major bills passed:

1) Open up health-insurance competition across state lines.

President Trump is reportedly about to sign an executive order to allow for health insurance companies to sell policies across state lines.

This move is, naturally, opposed by the major insurance giants who don't want to see their virtual monopolies threatened by new rules that can suddenly create a large number of new competitors nationwide. But more competition should finally put some market pressure on premium prices, despite what the richest insurance companies and their friends in state governments say. And lower premium prices should help make a dent in the reasons used by those millions of Americans who have not signed up for health insurance under Obamacare.

This will probably be a small change, but still a good one.

2) Tighten regulations on hospitals.

Reducing prices and costs is still mostly about the law of supply and demand, no matter what the politicians say. In America today, control of the supply of health care is increasingly being consolidated into the hands of the major hospital groups.

From 1998 to 2012, the roughly 5,000 or so hospitals in the United States saw 1,133 mergers and acquisitions. Then, according to health industry research firm Irving Levin Associates, things got even more heated. From 2013 to 2015, merger and acquisition activity among U.S. hospitals and health systems set new records.

While insurance companies have had to scramble to cover millions of new customers mandated by Obamacare, hospitals have enjoyed a big influx of new paying customers. So they've not only consolidated traditional hospital facilities to get more bang for their buck, but have also profited by accelerating the already existing policy of buying up private practices and even many of those urgent-care facilities we've seen popping up across the country over the past decade. Even the Obama administration's Federal Trade Commission raised a red flag over this in 2014 and warned these mergers were driving up prices at the worst time, but it got very little attention.

It will take a major effort to unwind the recent hospital mergers, so that's not the way to go for the Trump team. But the administration can instruct the Federal Trade Commission to do more than just raise flags and delay or block future hospital mergers for an indefinite period. That should help cut off one major catalyst for health-cost inflation.

Another smart move would be to no longer allow hospitals to charge Medicare, Medicaid and the insurers more for the same care patients get in a private practice facility. Hospitals should be allowed to ask for more reimbursement from Uncle Sam for the many non-insured and non-paying patients they often see in emergency rooms every day. But what must be stopped is when they buy up a private practice, make no real changes, and then bill more for the same exact service at the same place with the same doctor. This is a change the Trump administration's Centers for Medicare and Medicaid Services and its administrator Seema Verma could make on their own.

3) Publish health-care prices.

Think about it: Health care may be the only good or service that most of us agree to buy without even knowing the price of that care. Knowing the prices in advance is obviously a great tool to help keep costs down. Several news media outlets in major cities have begun an effort to publish those prices in newspapers and on websites, but those efforts barely reach the tip of the iceberg nationally.

Like the across-state-lines insurance rule issue, lots of major hospitals and insurers have regularly insisted that publishing prices won't help increase competition or lower prices. But Steve Sonenreich, president and CEO of Mount Sinai Medical Center, a teaching hospital in Miami Beach has long begged to differ. And in 2014, he started to make good on a public promise to pull back the veil on prices. Sonenreich even told a hospital trade publication that, "We believe that transparency would save employers and employees — and our country — money, and it would substantially reduce the expense of health insurance coverage."

And he's right.

Luckily, there should be some bipartisan support for this even though the Trump administration could do a lot to force price publication without congressional approval. That's because the Obama administration began doing this in 2014 with a database posted on the Center for Medicare & Medicaid Services website that is still being updated today. But those 2014 rules do not stretch across the country and getting price information is still way too hard for most Americans according to industry experts. This is one of those cases where President Trump can and should be more than willing to finish something President Obama started.

Once again, this all boils down to making sure American consumers get health-care cost relief. The focus on insurance alone has failed not only for the Republicans lately, but also for the Democrats still defending an Obamacare law that isn't doing enough to keep costs down. Even the partisan-hindered government in Washington D.C. could achieve the three above goals with relative ease compared to this year's failed Obamacare repeal and replacement efforts. It's time to begin.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.