Why Healthcare Price Transparency is Needed, Friedman Law

Happy Thanksgiving!

Thanksgiving and Black Friday mark the unofficial start of the holiday shopping season.  But what about shopping for healthcare?  Prices for TV’s and computers are clearly marked, but prices for healthcare are completely opaque.  It’s very difficult to find out how much you’ll pay for a procedure until you get the bill, and almost impossible to comparison-shop.

This is becoming a problem as more people are buying “high-deductible” insurance sold under the Affordable Care Act (aka Obamacare).  These are plans in which the insured pays more of their healthcare costs until they reach the deductible amount, which may be over $2,000.

For consumers, the price of healthcare matters.  And different providers offer wildly different prices for the same services, based on insurance contract rates that seem arbitrary and bear little relation to quality or patient outcomes.  The same procedure may cost four times as much between one provider and another.

Price transparency in insurance was a cornerstone of the Affordable Care Act, which gave consumers the ability to easily comparison-shop for insurance through exchanges like healthcare.gov.  More price transparency and comparison-shopping are needed in healthcare.  Efforts are being made – Massachusetts has just started requiring insurers to post the cost of procedures between different providers online.  California public broadcasting is even crowdsourcing healthcare prices, building a database by asking patients how much they paid.  But in New Jersey, obtaining this information is difficult.  The New Jersey Hospital Association has an online tool, but it is difficult to use for laypeople unfamiliar with medicine.

For the holidays this year, I want more price transparency in healthcare.