Price Transparency is Critical to Competitive Health Care Market
Americans on both sides of the aisle likely agree that the status quo in health care isn’t working. Progressives want to replace today’s confusing system with a single government program, Medicare for All. They say that we’ve tried a free market in health care, and that the private marketplace has failed.
But what we have today isn’t a free market or anything close. The status quo is a convoluted payment pipeline that puts more power in the hands of big bureaucrats and big businesses and not in the hands of patients and providers.
The Administration is hoping to change that with a focus on price transparency in health care. Just today, the Wall Street Journal reports on a new proposed rule that would require hospitals to publicly share the rates they charge to all insurers.
“It’s very significant. It’s a turning point in health care and a turning point to the free market in health care,” Seema Verma, administrator of the Centers for Medicare and Medicaid Services, said in an interview. “It hasn’t been a competitive free-market system.”
As I’ve written before, price transparency is a critical component in any healthy competitive market. Just think about other things we buy: We’d never agree to buy something without knowing what it will cost. We want to know prices upfront so that we can shop around or at the very least plan for a major expense.
Price transparency isn’t an end in itself. Our current healthcare payment system is plagued with problems, and as they say, “Sunlight is the best disinfectant.” When patients and employers can see the prices that hospitals actually charge (which can vary drastically for no apparent reason, certainly not varying based on quality), then we can finally have some accountability and downward pressure on health costs.
Independent Women's Voice created this checklist to determine genuine vs counterfeit price transparency: