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Transparency in Health Care Prices

POSTED BY Brian Blase on September 12, 2019.

To the [NY Times] Editor:

Re “Four Key Things You Should Know About Health Care” (Op-Ed, nytimes.com, Sept. 12):

Ezekiel J. Emanuel and Victor R. Fuchs argue that price transparency won’t lower health care costs. Fortunately, they’re wrong, largely because they missed several avenues for how transparency will help.

Transparency should lower prices through four critical paths: better informed patients; better informed employers able to help their workers shop for value; improved ability for employers to discipline middlemen; and public pressure on high-cost providers.

Employers — actually, employees, since all the health care spending comes out of their wages — are paying rates far above hospitals’ marginal costs for providing services.

Transparent prices will help employers eliminate counterproductive middlemen and develop new benefit designs, like contracting directly with providers, and payment models that incentivize employees to use lower-cost providers.

Sunlight is often the best disinfectant. The fact that the groups most concerned about price transparency are hospitals and insurers is telling. They fear that price transparency will put the brakes on their gravy train.

Brian Blase
Washington
The writer, a researcher and consultant, was a special assistant to President Trump at the National Economic Council from 2017 to 2019, focusing on health policy.

Click to Read in The New York Times

Filed Under: Brian Blase, The New York Times

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