We have a crisis in healthcare that has not been solved but will likely be in the next five years. That is price transparency for medical services. American consumers are being asked to pay high deductibles and co-pays for medical procedures and services. That means most of us are basically self-insured for the first several thousand dollars of health care costs. Many of us will not reach this deductible in an average year. That means we are paying retail for all those services. Some services under Obamacare have no deductible or co-pay like annual preventive exams. Most things, however, do require we pay the deductible.
?Consumers need a way to compare price.? - Bob Ehrlich
How do we know we are getting a fair price for those services? What does a colonoscopy cost? How do I find what a blood test costs? What is the going rate for seeing my gastroenterologist for that persistent heartburn? Most of us would like to know what is being charged and be able to compare that to other providers. In America, we generally cannot easily access that information. In fact 45 of the 50 states received a failing grade on providing cost information to their residents. Not one state got an A grade, only two got a B. This report from the non-profit Healthcare Incentives Improvement Institute said no states provide a readable and consumer friendly format to find cost.
For America to lower health care costs consumers need a way to compare price. Most of us will not doctor or hospital shop based solely on price. Having price information, however, will put pressure on higher cost providers to justify premium prices. Consumers can ask why a procedure cost more than the hospital down the street. Transparency will lead to a more cost conscious consumer being able to negotiate a better deal. Most of us buy a car these days only after doing hours of online price research. We know what it costs the dealer and we can ask for a fair deal.
Health care pricing is so opaque that we have no idea why a day in a hospital cost us thousands. We have not a clue why we get charged what we do. In the past, with low deductibles we did not really care. Insurance companies were the ones to negotiate prices, not us. High deductibles give us a strong economic incentive to know what we pay and where we can get a better deal. Dentistry seems to be well ahead of the physician and hospital market in terms of advertising prices. I used that information to cut a better deal for my dental implants with my high priced dentist. I probably saved a thousand dollars just knowing there were much cheaper dentists doing the same procedure.
Price transparency will make some entrepreneurs billions in providing consumers with price guides. Once we as consumers have a full price guide for medical services and products, we will put pressure on high cost providers to justify their premium or match the fair market price. Few of us will take the risk on cheapest services because price is affected by quality of facility, training and competence of the provider, convenience of the location, when the service is offered and other factors we use in picking a provider. Drug company prices are generally transparent. We can shop online, use web sites that compare pharmacy prices, sign up for discount cards and use coupons. While not perfect, drug prices can be found relatively quickly and easily. If we had a similar system for medical services I am confident prices would come down. We must demand our legislators act to provide their citizens with consumer friendly price guides. It cannot be done with all diseases as some are so complex that prices cannot be quoted. Most things like a colonoscopy, CBC blood test, office visit for a cold, balloon angioplasty can be compared on price.
I think both sides of the political spectrum can agree that knowing prices is good for their constituents. I assume some medical lobbies will argue it is too complex to leave in the hands of the public. They like being opaque. The time has come for price transparency and we have the tools to do it.
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