Hospital Prices Online?
CMS has come out and made it official:
Hospitals will be required to post online a list of their standard charges under a rule finalized Thursday by the Trump administration.
While hospitals are already required to make this information public on request, the Centers for Medicare and Medicaid Services (CMS) said the new rule would require the info be posted online to “encourage price transparency” and improve “public accessibility.”
In a pure free market system this would be great. The problem is the insurance companies and Medicaid and Medicare get their own deals from these same hospitals that is NOT the price that they give self-pay patients. THOSE are the prices that need to be transparent. Why? The future may be the past as we move back to that “major medical” insurance model. This is basically catastrophic insurance where the consumer has to shop around for the best prices. This is why Keith Smith MD and his Surgical Center of Oklahoma is so awesome. He has been doing this for years and his prices have always been low!
I think this CMS move is a good one. The next step is to force the hospitals to show ALL their prices as noted above. Then we can let patients pick like they do on Amazon (emergencies situations being the exception).
I know others believe differently so let’s hear your thoughts.
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Lee Kuan Yew, the leader in Singapore forced transparency in pricing years ago. Prices went down by 50% almost overnight. “Price” is not a word used in American Health Care, it is usually “costs.” You will hear people say, “Our costs have gone up again,” sort of like a locusts have descended upon us. Many in American Health Care don’t even know their costs. Patients perceiving “skin in the game helps. In the book, Affordable Excellence (available for free on Amazon):
“As Lee Kuan Yew recalled in his memoirs: The ideal of free medical services collided against the reality of human behaviour, certainly in Singapore. My first lesson came from government clinics and hospitals. When doctors prescribed free antibiotics, patients took their tablet or capsules for two days, did not feel better, and threw away the balance. They then consulted private doctors, paid for their antibiotics, completed the course, and recovered. Lee’s government imposed a fee of 50 cents for each attendance at the clinics, doubled during public holidays. 11 This bold move reminded Singaporeans that healthcare is not free, and that the nation would not be building a welfare system such as Britain’s. People would be expected to a large degree to pay their own way.”
Reference: Haseltine, William A.. Affordable Excellence: The Singapore Health System (Kindle Locations 309-315). Brookings Institution Press with the National University of Singapore Press. Kindle Edition.
Absolutely agree that healthcare pricing transparency and posting is a good thing.
I also think there is a need for similar transparency in higher education for students looking to buy an education- colleges should be required to post their graduation rates, percentage of graduates employed in the area that they studied and salaries of graduates.
You do understand that these kind of reporting rules require more government- not less. For instance, compliance personnel just as we have with quality metrics.
There is also the standard caveats with measuring anything- those who do the reporting will report only exactly what is required and it will be gamed.