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Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.

Commentary

Price Transparency
Grace-Marie Turner, Galen Institute, 2-24-06

Turner thinks that price transparency “is the hottest conversation right now in the world of consumer directed health care,” with insurers like Aetna and Humana encouraging their policyholders to compare prices for common operations and tests. She also hopes that the trend won’t stop there.

The next phase in price transparency must come directly from physicians, who voluntarily post their prices so consumers can know directly and up front the full cost of a visit or procedure, and from hospitals. Hospitals will be forced to figure out what their costs actually are so they can give price-conscious patients an estimated price range for procedures. …
Competition will surely drive this movement: Hospitals in particularly competitive cities are beginning to see the opportunities to offer package pricing for surgeries to patients from other cities and states and to pick up the price of a hotel room for a family member to stay during the hospitalization.

Turner adds that the Bush Administration is throwing its weight behind pricing disclosure, which should add momentum to the movement. The next step policymakers can take to encourage more efficient health care markets is for the government and health care stakeholders to agree on reliable, uniform standards for the disclosure of health outcomes on a risk-adjusted basis. When patients can accurately compare doctors and hospitals on the basis of both cost and quality, they’ll have a lot more bargaining power than they do now.

This may not happen, however, without medical malpractice reforms that allow doctors and hospitals to disclose outcomes information without fear of being overwhelmed by lawsuits.



Project FDA.
  
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