TAR HEEL VIEW: Transparency in health care prices would lower costs

What if scheduling surgery was like a trip to the auto mechanic — before the first turn of the wrench, or in this case, the slice of a scalpel — patients received a printed estimate listing the total price they’d be expected to pay?

The sticker shock may elevate your blood pressure for a few minutes, but in the long run, knowing before you go would likely be better for your financial health than figuratively writing a blank check as the anesthesia hits.

As Republican lawmakers tout the American Health Care Act, their alternative to the 2010 industry overhaul known as Obamacare, our nation is in the thick of an ideological debate: Is health care a right that the government should guarantee, or is it a private service, essentially a consumer product?

Most conservatives gravitate toward the latter definition. Taking that to its logical conclusion, we challenge them to consider free-market reforms that would force hospitals and doctor offices to compete for patients’ business, driving prices down and empowering health care consumers.

Federal and state governments could require transparent, a-la-carte pricing for medical procedures. The system may be too complex for a fast food-style menu board, but there’s no good reason published price lists couldn’t be available online and in doctors’ waiting rooms.

Doctors and hospitals are averse to price transparency because it’s common practice to either charge as much as an insurer will pay or negotiate a set schedule of reimbursements with each individual insurance company. Patients should care even if insurers absorb the markups, because those artificially inflated bills ultimately drive up their premiums and raise their deductibles.

“At the heart of this are the price signals that help us guide decisions in all parts of our lives,” writes Nick Gillespie of Reason magazine, a libertarian publication that advocates for “free minds and free markets.” “If you don’t know what things cost at a given point in time, there’s really no way to make an informed decision.”

Advertised prices would allow patients to comparison-shop. If a hip replacement or knee surgery costs thousands less at Hospital B than Hospital A, we can vote with our wallets and opt for the care that’s least likely to cause financial strain.

In late January, Time magazine profiled the Surgery Center of Oklahoma, which only takes cash and accepts neither Medicare and Medicaid nor private insurance. A published price list for procedures is available online. Keith Smith, an anesthesiologist and co-founder of the practice, refutes the conventional wisdom that health care can’t be a prix fixe proposition.

“Finding an average price doesn’t require complicated math,” Smith told Time’s Haley Sweetland Edwards. “It’s arithmetic.”

Such patient-centric reforms are sure to make hospitals and their powerful lobbies in Raleigh and Washington mighty nervous. Yet they could be the linchpin in making a free-market health care system work for ordinary folks.

Republican lawmakers want to ease federal mandates on health insurance companies and allow insurers to sell across state lines in an effort to increase competition. If they’re truly committed to the free-market principle that competition improves care and lowers costs, they ought to require price transparency.

The Wilson Times