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Predatory pricing is what’s wrong with health care
It’s not often that you read what seem to be your own thoughts, but that’s exactly how I felt while reading Steven Weissman’s opinion piece for the Center for Health Journalism. Weissman, who had an eye-opening stint as head of a Miami-area hospital, has a discerning view about why health care costs are out of control and what to do about it.
A couple of his observations:
“Healthcare is the only industry exempt from the rights of the U.S. free market system. Ask the price of any healthcare service and you will always receive the same answer: “What insurance do you have?” Billing is determined by how much can be extracted from each patient on a case by case basis.
Value and market price are entirely irrelevant concepts. Patients who are out of network or uninsured are routinely charged 10X more than “normal” rates. This is fraud in any business—except health care.”
Weissman argues that the current, widespread call for price transparency will merely confuse everyone. With full transparency, we would see that a blood test for cholesterol can range from $10 to $400 or more at the same lab, or that a bill for chest pain hospitalization can range from $3,000 to $25,000 for identical services at the same hospital. Is such information helpful? Or a distraction from demanding that elected representatives fix the real problem?
How do we fix it? Weissman again:
“The solution is for Congress to require healthcare providers to publish actual prices, just like all other businesses. All patients, insured and uninsured, should be billed the same published rate for the same service. Hospitals, physicians and labs should have continued freedom to set their own prices, but predatory pricing—a different rate for each patient—must end.”
When rates are set, patients can shop for good health care value. Providers will be forced to compete based on price, quality and service. Health care costs will plummet, and so will the cost of health insurance.
Is this a dream? Perhaps. There are massive amounts of lobbying dollars to make sure it never comes true. But each of us should be asking lawmakers why they’re protecting the status quo. Why are they supporting an enormous economy that distorts the market principles on which all other U.S. industries are based and that brings the consequences of those distortions down on the backs of citizens?
The price problem in health care is fixable. It takes only courage.