(A version of this Health Alert was published by Forbes.)
Donald Trump’s health reform proposal during the presidential campaign promised to deliver price transparency to health care:
Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.
Doctors and hospitals are infamously terrible at sharing price information with patients. It is a problem for both scheduled procedures and visits to emergency rooms. The root problem is not that providers are unwilling to share prices, but that prices are not formed through a normal market process. Instead they are administratively determined between government, insurers, and providers.
I have spoken with doctors who believe it would be illegal for them to disclose the price of a procedure to a patient before the insurer or government approved the claim! On the other hand, insurers’ and employers’ price transparency tools are not useful to most patients, and go largely unused.
A recent Consumers Union survey found nearly one third of Americans who had hospital visits or surgery in the past two years were charged an out-of-network fee when they thought all care was in-network. Other research from the Brookings Institution suggests this problem is getting worse.