Healthcare Price Transparency

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In U.S. healthcare system market failure is caused due to lack of available information for the consumers. The patients lack product or procedure cost as well as the professional knowledge to access the quality of different services before they use these services. Thus, instead of the supply-demand force setting prices, the prices are set by hospitals and large health insurance companies to increase their profit. In the past, the consumers that were affected by healthcare price were uninsured patients. Nonetheless, in the present, the insurance companies create high-cost sharing and deductible plans to shift the prices of healthcare on consumers. The consumers are most concerned with copayments, not the average cost of services. Therefore, providing information on plan-specific copayments will be more helpful for the consumers. The price transparency should contain combined information of price and quality (Sinaiko & Rosenthal, 2011).

Research question

When patients could compare the costs of service from a provider, this comparison has been shown to impact some groups of patients’ choice of a provider. However, does the ability to compare costs also affect their choice of health facility or is that still driven by provider preference?

In conclusion, healthcare costs are rising and the market is failing. Whether a patient is insured or uninsured high co-payments and high deductible plans are not helpful for the consumers. To stabilize the market for long-term price transparency initiative is necessary.

References

Center for Medicare and Medicaid Services. (2012) National Health Expenditure Projection 2012-2022. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2012.pdf

Congressional Budget Office. (2012). The 2012 Long-Term Budget Outlook. Retrieved from https://www.cbo.gov/publication/43288

Hostetter, M & Klein, S. (2012). Health care price transparency: Can it promote high-value care? Retrieved from http://www.commonwealthfund.org/publications/newsletters/quality-matters/2012/april-may/in-focus

Mitts, L. (2014). Price transparency in healthcare: An introduction. Retrieved from http://familiesusa.org/product/price-transparency-health-care-introduction

Sinaiko, A. D., & Rosenthal, M. B. (2011). Increased price transparency in health care—challenges and potential effects. New England Journal of Medicine, 364(10), 891-894.