mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
A Radical Idea: Patients Should Know What Healthcare Costs


Just as the Obamacare rollout failure is calling into question the whole project of top-down federal health care policy, the WSJ has an encouraging interview with Brent James, the CEO of Intermountain Healthcare. Intermountain is a hospital network that’s creating a data system that complies and tracks prices for every medical procedure. It’s designed in part to help doctors make more cost-conscious decision when they provide care, but, much more importantly, its data will also be made publicly available to patients:

We have already started to post prices for things that many patients buy directly, such as lab tests and imaging exams [such as X-rays]. We will soon add things like routine office visits and simple procedures, like screening colonoscopy. Later we will add major treatments like delivering a newborn, or surgery to implant an artificial knee joint.

While we will post prices on our website, probably the most effective sharing of cost information will happen through our insurance partners’ websites. We believe that patients will mostly want to know what their own out-of-pocket costs will be, given that they’ve already paid for their health insurance. That’s true even if your “insurance plan” is the care delivery group.

Price transparency tools like this have the ability to bend the health care cost curve without involving any federal re-organization of the system. Where states and private health care providers have pushed price transparency, the results have been impressive. When people have all the information they need to make good decisions about they’re health care, they often choose more economical options, thereby driving down prices throughout the whole region. This has started happening in a part of Oklahoma, for example, thanks to the Oklahoma Surgery Center. Price transparency may not be a cure-all for what ails our system, but economizing measures like this are essential to making any bigger reforms easier and more effective.

[Photo of stethoscope and money courtesy of Shutterstock.]

Features Icon
show comments
  • Jacksonian_Libertarian

    It’s the feedback of competition that forces continuous improvements in Quality, Service, and Price, in free markets.
    We will know we have arrived at a healthcare free market, when Healthcare providers are advertising their products and services to get more patients.

  • Self Pay Patient

    It’s not just that prices must be transparent, they must be REAL. That means hospital ‘chargemaster’ prices have to become a relic of the past, and the whole in-network/out-of-network paradigm be radically revised.

  • rheddles

    Price transparency will not change the “cost curve” if patients do not bear a significant portion of those costs. It is the combination of transparency and the consumer having wallet as well as skin in the game that will assure proper allocation of resources. You need incentive as well as information.This is true in all markets. And it is a cure-all.

  • Jason

    I was actually at the American Medical Association Interim Conference this past weekend, and this issue was discussed with the AMA leaning towards referring it to one of their research councils to find more information.

    A big thing you mentioned is what the AMA is actually trying to research – how to get transparency on what patients pay out-of-pocket. Hospitals will always have some ridiculous sticker price for uninsured, which they do not expect to get back from both out-of-pocket payers or insurance companies. Many of these list prices are just ways to start from a stronger negotiating position when it comes to extracting payment.
    Funny enough, our focus now is to get more physicians to do the whole “motivational interviewing” thing to try to get patients to take care of themselves more, depriving us of fee-for-service opportunities.
    Pay reform is coming!

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service