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Hospitals May Have to Publish Prices

A central belief fueling the growing promotion of “consumer-driven health care” is the idea that high deductible health plans will force people to take more of an interest in how much their health care costs, since they’re going to be paying more of it. The biggest supporters of this movement think informed consumers will force competition in health care delivery, lowering prices. As a Milwaukee newspaper notes, “Nowhere else in the economy do people buy a product or service without knowing the price.”

Now three states are leading the way in making public typical hospital prices for common procedures. But is price disclosure all that’s needed to lower health care costs? Are prices the main thing that will guide people’s health choices?

For one thing, health care can be complex, and most people defer to their doctors. In addition, the cost for many hospital procedures exceeds most people’s deductibles.`Price variation among hospitals doesn’t affect [patients],’ said Robert Town, a health economist with the University of Minnesota. `They are going to pay their deductible no matter where they go.'”

For more on this:

STATES PUSH FOR HOSPITAL PRICE LISTS
by Guy Boulton
Milwaukee Journal Sentinel
October 14, 2007

{ 2 comments… add one }
  • Mona Lori March 5, 2008, 8:54 am

    True prices for health care services, not meaningless list price, should be disclosed and easily accessible to the public.

    I am an advocate of price transparency and believe that health care can be improved if we encourage more competition in the industry. Competition will bring positive results including lower prices, more innovation, and better services – all resulting in improved patient care.

    Mona Lori
    Principal
    http://www.OutofPocket.com

    “Exposing true prices through consumer collaboration”

  • JimB March 6, 2008, 9:21 am

    The efforts to have hospitals provide transparent pricing are to be commended. Like most businesses, they like to be able to engage in price discrimination and thus reduce competitive pressures.

    But there is another, even greater structural distortion in pricing of medical care – Medicare. Everyone should read John Goodman’s recent op-ed in the Wall Street Journal (http://online.wsj.com/article/SB120373015283387491.html?mod=Letters) detailing how Medicare’s pricing regime contributes to high-cost medical care.

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