In the Health Affairs blog, Brian Blase argues that a policy price tag for future medical system pandemic aid should be price transparency:
it’s time for these industries to help American families and businesses and drop their fight against health care price transparency. This starts by equipping Americans—both families and employers—with tools to be better purchasers of health care. Specifically, Congress should lock in the Trump administration’s price transparency rules to end the legal battles over them and to give the American people the information they need to make smarter decisions about their health care and coverage. Enhanced shopping will increase competitive pressures in health care markets and lead to lower prices and enhanced quality of care.
Price transparency is not a panacea. It probably helps ( depends on how transferrable the Danish concrete market is to the US healthcare market) but it is not a panacea.
Sarah Kliff in today’s New York Times reports on price transparency and legalized looting for COVID testing:
In a one-story brick building in suburban Dallas, between a dentist office and a family medicine clinic, is a medical laboratory that has run some of the most expensive coronavirus tests in America.
Insurers have paid Gibson Diagnostic Labs as much as $2,315 for individual coronavirus tests….
In Texas alone, the charge for a test can range from $27 to the $2,315 that Gibson Diagnostic has charged….
The recent CARES Act requires that insurers cover the full cost of coronavirus testing, with no co-pays or deductibles applied to the patient. The health plans must also pay an out-of-network doctor or lab its full charge so long as the provider posts that “cash price” online.
Under current law, as long as there is a listed price somewhere, the lab can charge and get paid whatever it thinks it can get away with before someone calls in the press for public shaming.
Price transparency is probably helpful at the margin but as long as there is no other tool that helps to reduce the informational complexity and probable “halo” effects of high prices, price transparency is a limited tool.
Starfish
People are gaming price transparency by posting it on a website ten pages deep in a document that is not searchable. That issue needs to be addressed.
Ted Doolittle
Yes it is a very limited tool, but there is a justice/fairness component. The health plans increasingly rely on high deductible plans, and thus the insurers and providers are negotiating prices that increasingly are not even paid by the carriers. The prices are paid by us, but we don’t get a chance to participate in the negotiations, and usually don’t even know the price until the bill comes.
Eunicecycle
I think it is very frustrating that there is nowhere to call to find out how much the negotiated price is, or at least no one will tell you. I even discovered, that different facilities in the same healthcare system can have different prices! I needed a follow-up x-ray so went to the facility I usually use. There was an hour wait, so the receptionist said I could go to another facility about 1 block away, in the same system. So I did, and when I got the bill it was 4 times more than the other facility! The more expensive facility used to be a surgical center that was changed to more of an urgent care about 5 years ago, but had always been part of the same hospital system. Oh and my insurance is part of the system, too.
Gary Ratner
If they lacked the statement of odds on their backs, would scratcher lottery tickets be price transparent?
dirge
Generally more price information is going to be better than less, but it’s only going to lead to an efficient market in the absence of market power, agency conflict , and information asymmetry. The idea that patients “shopping” for care is going to fix anything depends on their ability to do cost/benefit analysis, which depends not just on knowing the cost, but also the benefits. So no magic of the invisible hand until a majority of patients are also medical specialists in all the treatments they’re receiving. Then we can get to work on perfectly aligning the incentives of insurance companies with those of their policy holders, which should be reasonably straightforward once we’ve gotten rid of the profit motive and re-educated everyone to value each other’s lives as much as their own.
So… price transparency is a great start on a totally feasible project. Yay.
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daveNYC
Price transparency isn’t going to make much of a difference for a majority of people who need to utilize the health care system. It might be nice for someone who just needs an annual physical, but anyone who goes in with an actual health issue isn’t going to be able to do much about one office charging more for some blood work or whatever because they won’t actually know what they need done before they’re in the office.
I mean, what is the expectation here, that the doctor says he’s going to test X, Y, and Z, and then hand the patient a list of the cost of each of those tests so they can go comparison shopping? Maybe clip some coupons to help lower the cost?
It’s depressing that this do nothing idea is being pitched as a policy ask.
From my latest adventures in the Czech health care system: A trip to the GP, two trips to a specialist with a ‘fun’ procedure done, and some pills from the pharmacy ran me $20 out of pocket. It’s not just the low price that’s nice, it’s the fact that I can go to the doctor and never have to worry about what it’s going to cost me. That peace of mind is almost as valuable as the actual care I get.
Yutsano
I’m right in the thick of this. I had so much weakness in my body that we had to call the paramedics just to get me up. Since their choice of hospital was unsuitable, we were left with two other options. I wasn’t exactly going through comparing prices at that time!
Greg in PDX
Because of a genetic condition I have to get phlebotomies done every so often. I walk in they take a pint of blood and I walk out. 1/2 hour tops. My insurance pays it. Never a problem. But then one day I was mistakenly sent a bill meant for my insurer. $1600. For a 15 minute one staff procedure. Incredible.
Another Scott
@Greg in PDX: Sometimes expensive fees can be justified.
Smithsonian Magazine:
OTOH, knowing how to, and successfully drawing blood, does not seem to be worth $1600×4 = $6400/hr.
:-/
Cheers,
Scott.