Making patients more aware of health care prices won’t stop medical spending from bankrupting the US. In the wake of Steven Brill’s now-famous piece on hospital price-gouging, people on all sides are coming to agree that increasing health care price transparency is an important policy goal. But Dr. Peter Ubel argues in The Atlantic that it won’t fix our cost problem:
Consider what happened in New Hampshire after the state began releasing price information on things like MRIs, as part of its health care price transparency efforts. In the twelve months following that bill, prices hadn’t budged at all.
Ubel offers a few reasons why price transparency perversely might even increase prices. For one thing, patients often mistake quality for cost and so assume the higher-priced treatment is the better one. But the more important problem with price transparency traces back to the basics of our insurance system. In the insurance model, a third party pays many of your health care costs. Even if insured people were told the full price of their care, why should they care about the treatment’s expense if someone else is paying the bulk of it?
US health care needs major surgery, not a routine checkup. Price transparency, like innovations in drugs and treatments, is the kind of low-hanging fruit that we should continue to harvest. But we shouldn’t expect these small measures to fix the system on their own. Nothing short of a revolution in service delivery will bring costs under control. This revolution will involve everything from using new technology to diagnose patients remotely to experimenting with new kinds of clinics. Without these big advances, all the price transparency in the world will only yield marginal benefits.
[Bills image courtesy of Shutterstock]