Free Market Transparency on the Horizon?


Now THIS is what I’m talking about!

From an article in (registration required)…

Pricing transparency gaining renewed interest
Led by a physician lawmaker, members of Congress on both sides of the aisle have shown renewed interest in mandating a boost in healthcare pricing transparency, including charges for physician services.

More on pricing transparency from an article in The Hill.

Rep. Steve Kagen, M.D., (D-Wis.) sponsored one bill (H.R. 4700) that would require all medical providers to openly disclose prices or face a financial penalty.”The “Transparency in All Health Care Pricing Act of 2010” would finally allow patients to see the price of a pill before they swallow it.”

Rep. Joe Barton (R-Tex.) sponsored H.R. 4803 which is a little more vague, but which still requires that all hospitals in each state report “the charges for inpatient and outpatient services typically performed by such hospital.” This bill has 11 co-sponsors.

Sources in the article discussed whether the pricing scheme would be “too complex” and suggested that if competitors knew each others’ prices, they would raise prices in a given market. If hospitals have to list every little thing, I suppose it could be too complex. I don’t go along with the price fixing argument.

A few simple solutions:
1. If we’re worried about the complexity of pricing all hospital services, require that providers report pricing based upon CPT codes. That way, consumers can compare apples to apples (or codes to codes).
2. Any charges that do not correspond to a CPT code must be explicitly stated in simple English. No charges of $129 for a “mucous recovery device” when all they’re giving you is a box of tissues.
3. Require that any procedure or test or other charge whose price is not published must be provided free of charge to the patient. Patients have the option of accepting or rejecting items once they know the charges involved. You want to charge $129 for a box of tissues, you better tell me about it first. Then your charges will be out there for people like me to comment upon.

This whole pricing transparency thing is catching on. Just read a blog post about transparency from Paul Levy – the CEO of Beth Israel Deaconess Medical Center in Boston. In Massachusetts. You know, that state where they have insurance for everyone, but access for … well … not everyone.

“we should measure parties’ commitment to change by the degree to which they advocate and adopt the kind of transparency that exists in virtually every other segment of the economy”



  1. I know we charge really low facility fees (I think our lowest-level medication refillesque visit is $95 and maxes out at around $350 for your cardiac arrest-types, not including procedures), and I think we’d raise our prices if other area private hospitals had higher ones.

    Regardless, the “price” of healthcare is depending on mainly your insurance and would require quite a bit of additional people to be hired to figure out the true ‘price’ of something. This would be a good bill if it only included those who would have to pay 100% out of pocket (including those on high deductible health plans).

    Oh, and it would also probably be an EMTALA violation if displayed too prominently.

  2. I would love to be able to post prices. Not to mention to be able to advertise them and even have sales. This would create competition and drive down prices. The reason we can’t do it is because it is against the law. Isn’t amazing that the fixes for heealth care that make sense are about getting rid of the government interference that created the whole problem. Get rid of Pete Stark and his laws, you could fix healthcare.

  3. price transparency doesn’t mean much if people aren’t paying directly for their health care. do people really care how much their insurer or the government is being billed?

    • I care how much my insurer is getting billed. In part because I eventually am going to pay for it in some manner and also to determine if I am getting a cost effective treatment (and partly to evaluate the doctor). Lots of people use resources because they have no idea of the cost and trust their doctors to use the resources wisely. Show them the cost of a test or treatment and you might find that some mild mannered patients suddenly require their doctors to justify things.

      I’ve found that objecting to an expensive test suddenly resulted in an additional diagnostic option being presented, one that was cheaper and provided a potential benefit. If I had never had the financial incentive to ask, the doctor would have never mentioned the option.

  4. I was looking at needing sinus surgery a couple years ago, and the surgeon practiced at two hospitals. His office gave me the CPT for the procedure and the ICD-9 surgical code for it, and I started calling around. They could give me rough estimates, with variations for whether or not I would need to stay overnight.

    I was looking because my insurance paid differently depending on which facility I went to and the difference would come out of my pocket. Interestingly, the more expensive facility would mean less out of pocket for me.

  5. I think prices should be posted, that patients should ALWAYS have some financial skin in their care, and that physicians should act has healthcare advisors, explaining the risks and benefits of all tests and procedures. The patient should make an informed consent regarding all treatments and tests, based on their priorities and risk comfortability. As long as we accurately explain and document, the onus is on the patient to decide how much medical care they are willing to pay for. No more unlimited free care for COPD patients who continue to afford their cigarettes and no more insurance companies saying that we run up bills in the name of defensive medicine nor plaintiff attorneys asking in retrospect what other possible expensive tests could have been run or expensive interventions could have been performed. Let the free market do its job and let the patients make their own informed decisions with their own money, just as they decide where to dine or what type of car to buy.

Leave A Reply