Efforts at Price Transparency — Real Health Care Reform Healthshare

Efforts at Price Transparency


The House Energy and Commerce subcommittee is taking up several bills on health care pricing. One requires Medicaid programs to disclose charges for hospital services to their enrollees. Another would require hospitals, doctors, nurses, pharmacies, and others to disclose prices. And a third would require public and private health plans to disclose what services are covered, what restrictions and cost sharing requirements there are, and who the participating providers are


One of the main reasons that health care expenses are out of control is that no one involved in the purchase typically knows, or cares, what the real cost is. So doctors and hospitals rarely post prices, and in fact will be extremely reluctant to tell you even when you ask.


In general I’m not a big fan of additional government regulation. More often than not it causes more problems than it solves. But I am also for more transparent information, so interested parties can make rational decisions based on all available information.


Having doctors and hospitals disclose prices would probably be a very good thing. Though to really make it work, people should also have a vested interest in the outcome based on that pricing. In other words, the more people use health insurance to protect against catastrophic expenses, and the more they pay for smaller expenses and routine care themselves, the more carefully they will shop for medical care.


This type of consumer involvement results in greater price competition among providers, and everyone benefits. We can clearly see this working in areas of medical treatment where insurance is not typically involved – such as lasik surgery or cosmetic surgery. For years the price of lasik surgery actually decreased, and is still rising at a much slower rate than medical services that are usually paid for by a third party.


I expect the flow of people from standard plans to more catastrophic HSA-qualified plans to continue to increase, particularly as the rate increasing effects of health care reform become apparent. Hopefully we will all see more price transparency, and benefit from the increased competition among providers that this will inevitably cause.


Leave a Reply

Your email address will not be published. Required fields are marked *