Friday, June 26, 2009

Dear Mr. President: How to save millions on health care

Mr. President, Members of Congress, members of the press, and fellow bloggers---

There's a way to save millions of dollars on health care that nobody is talking about. It's a simple concept, and the start-up costs would not be enormous. It would be ideologically satisfactory to Democrats and Republicans. It would satisfy the President's call for "uniquely American" solutions, because it is based on free enterprise. Though it would not solve the current health-care crisis, it would help to contain costs while a solution is found.

Our current health-care system resembles free enterprise like a mugging resembles a trip to the mall. When we go to the doctor, the pharmacist, or the hospital, it's "your money or your life." We consumers usually have no idea how much any health-care service or product will cost until the bill arrives--we only know that we need help, and so we pay whatever is asked. Comparison shopping, an essential feature of budget management, is impossible.

So what if we figured out a way to make comparison shopping not only possible, but easy?

What if doctors' offices were required to post a list of their most common procedures, with prices for each? What if they also had to list all their prices on a central online data bank that consumers could access? What if pharmacists, laboratories, scan centers, hospitals, clinics--all providers of health care--had to do the same?

Imagine going online and checking to see how much your local family-practice physicians charge for a 15-minute office visit before making the appointment.

Imagine being given, along with your prescription, a computer print-out showing where your medication can be purchased, how much it costs from each pharmacy, and what other, cheaper options might be equally satisfactory.

Imagine being able to refuse your doctor's offer to use the CT scanner across the hall, which he owns, and instead driving three miles to a different CT scanner that costs half as much. Or confidently using the doctor's scanner, knowing that his prices beat out the competition's.

How hard would this be?

Posting the prices of usual procedures would take, what, an hour?

Listing all prices on the internet could take anywhere from ten minutes to a day, depending on how many services are offered.

Setting up an internet portal for providers and consumers would be the most expensive and time-consuming part. Google might be happy to help. Or Bill Gates.

Price-fixing could be a potential problem ("Let's all get together and charge the same outrageous amount ..."), though it is already illegal. Undoubtedly there will soon be caps on medical malpractice lawsuits. Perhaps underemployed ambulance chasers could move into antitrust law, which would certainly increase their popularity.

Some providers might object that they themselves don't know what their prices are, because so much depends on insurance company payments. Well then, imitate hotels and publish your maximum rack rate. Or imitate airlines and change your rates hourly (this would be time-consuming, and I really wish airlines didn't do it--but still, it's a lot easier to comparison-shop for a plane ticket than for a mammogram). Or keep your prices low and reasonable for everyone, and stop asking the uninsured to subsidize the insurance companies' discounts.

Any health-care system acceptable to Americans will contain some element of free trade. To the extent that we want the free market to play a role in our health care, let's insist that normal market forces operate. We live in an information society. Why not information for consumers on what our health care is going to cost?


Anonymous said...

Agreed. I left a doctor who refused to tell me how much a sports physical would cost. Most aren't any better, but it upset me. I'd also like doctors to provide drug cost info when it's prescribed. That might be tough since pharmacies will vary, but it's hard to get ahold of a doc to ask for a cheaper drug once you've left his/her office.

darrell a. harris said...

Methinks thou dost describe and prescribe Utopia, fair Lady.
"Somebody please listen!"

darrell a. harris

Karen DuBert said...

I absolutely agree with your premise and it is so sensible that probably no one will listen.