April 12, 2010

FAILURE TO NUDGE:

Prices Are Right (Barbara Kiviat, 4/19/10, TIME)

There are many reasons health care costs are spiraling out of control, but the simplest one to understand is this: nobody knows what anything costs. Providers get paid through a tangle of insurance-company agreements and billing schedules that change from patient to patient. No wonder a hospital can sneak a $100 box of Kleenex onto your bill and the price of an MRI can range from a few hundred to a few thousand dollars. If you don't know what something costs, you can't know if it costs too much.

There is a bill in Congress that would attempt to fill in the blanks. The Transparency in All Health Care Pricing Act of 2010 would require health care providers--including hospitals, physicians, nurses, pharmacies, pharmaceutical manufacturers, dentists and insurers--to post prices, including on the Internet. Discounts and subsidies would be listed too. "The public will discover what people in health care already understand, that the price of any health care service is whatever they can get," says Representative Steve Kagen, a doctor who ran a practice for 25 years before being elected to Congress.

High-deductible health insurance, which shifts greater costs to individuals, already works on the premise that enlisting the price-sensitive American consumer will lead to a more efficient marketplace. When people have skin in the game, they should use health care more prudently. But so far, such efforts have reached only a small portion of the population and have had little measurable impact on health care costs.

Posted by Orrin Judd at April 12, 2010 2:56 PM
blog comments powered by Disqus
« SHOW TRIAL: | Main | WHAT EVER HAPPENED TO BILL WELD?: »