Have you ever tried to figure out what a healthcare procedure is going to cost you before you have the procedure? Almost no one can give you a straight answer, and it takes a long time to get a number at all because the doctor’s office has to check with your insurance to see what their agreement is, what you still have left with your deductible, and where you stand relative to your out of pocket maximum. The result is that consumers have very little insight into what they are actually going to pay or owe when they go to a check-up, when they need a new prescription drug, or when they have a knee operation at a local hospital.
In his book The Opioid Crisis Wake-Up Call, Dave Chase addresses the lack of transparency in healthcare pricing. Specifically looking at the ways that insurance companies hide claims data from employers, Chase writes, “They want to maintain the status quo. This means protecting pricing opacity at all costs. If you could see the prices you actually pay, you might begin to wonder why a hospital with a large market share but mediocre quality outcomes is paid exponentially more than a smaller, high quality provider in the same network.”
Healthcare price transparency reveals disparities in our healthcare system and shows that healthcare costs are often not connected with quality or health outcomes. Cost is somewhat arbitrary and usually negotiated without the person who will actually be receiving the service. If we could see the costs, then we would be more likely to shop around, either for different insurance or for different healthcare providers with more reasonably prices for services and treatments. I think our health spending is generally rather inelastic, but nevertheless, if we better understood pharmacy pricing, basic medical services, and major surgery costs, we could start to move toward options that offered higher value.