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Prices Prices Prices
US Flunks Health Care Transparency

Forty-four states received an F, and not one received an A on a national health care price transparency report card released yesterday. The Catalyst for Payment Reform and the Health Care Incentives Improvement Institute examined the laws governing health care price availability in every state and evaluated whether the average consumer could access this information easily. Even states with pro-transparency laws are faring poorly, as the LA Times reports regarding California: 

Under a state law that took effect in 2006, California hospitals must publish their average charges for the most common procedures on a state website. But relatively few hospitals take the extra step of listing prices on their own websites.

The other problem, experts say, is that no one actually pays those charges reported to California officials, not even the uninsured. Insured patients would be responsible for a reduced price negotiated by their insurer, and the discount would vary based on the company.

That California failed despite the 2006 transparency law shows just how difficult it will be to promote price transparency in the fifty states. The third-party payer system works against reform. Hospitals profit when price signals are not clear, as it allows them to avoid competition.

We have to increase transparency to bring down health care costs: When providers compete to provide better services at lower prices, consumers win. And when consumers know the price of health care services, they make wiser decisions.

We look forward to the day when all the states get top marks on their report cards. It can’t come too soon.

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  • Andrew Allison

    “The third-party payer system works against reform.” Eureka!

  • Andrew Allison

    Today’s report on our utterly dysfunctional healthcare payments system: Last month I had a minor surgical procedure which entailed my spending two-and-a-half hours in a local outpatient surgery center. Excluding the separately billed doctor and anesthesiologist fees, the facility billed $4771 for this. Medicare paid $970.26, I paid $247.50, and the rest was “adjusted”. The doctor and anesthesiologist receive similarly short shrift. Is this crazy, or what?

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