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Achieving Price Transparency Is in the Realm of the Possible

MANAGED CARE November 2013. © MediMedia USA
Editor's Memo

Achieving Price Transparency Is in the Realm of the Possible

John Marcille

Uwe Reinhardt, PhD, in our Q&A, says — somewhat tongue in cheek — “… that is another miracle of American health care: We don’t know prices. We know Medicare prices — at least you could know them — because they are in the public domain. But prices negotiated between hospitals and doctors are trade secrets. So if you don’t know prices, competition can’t work.”

There has always been a need for price transparency, and now might be our best opportunity yet to achieve it. Our cover story on page 16 by contributing editor Joseph Burns warns that even with the help of the Affordable Care Act, transparency won’t come easily. In fact, some of the ACA’s efforts in this area are making some consumers more confused.

And it’s easy to get confused, as even savvy customers note. A Viewpoint by John Sung Kim, who runs a health technology company, includes this interesting tidbit regarding a recent hospital stay.

“While the hospital charged $49,675, my insurer paid only $34,772. The rest was ‘forgiven’ by the hospital.” That was for one night, with no surgery. “Just a CT scan, eight shots of Dilaudid, cable TV (no HBO), bed, and a bland continental breakfast.” Sobering, but health plans still see an opportunity. Rick Weisblatt, PhD, a vice president at Harvard Pilgrim Health Care, says in our cover story, “If we can drive more volume to lower-cost providers, then, in theory, we should be able to save on health insurance premiums. If the market becomes more competitive and providers are forced to be more efficient and then improve their cost structure and lower their prices, that should mean we could lower the cost of insurance.”

What was that word Reinhardt used? Miracle? Almost everything we’ve achieved thus far was once considered a miracle, so we might be on the right course.