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Healthcare Cost Transparency Is Important for People, Too

Recently my dog, Watson, had surgery to remove a mast cell tumor. Mast cells are particularly dangerous because they go can deep into the skin and spread to a dog’s internal organs. Luckily, my wife and I caught it in time and were able to have it removed without too much trouble.

 

I bring this up because the process was smooth, the people were attentive, and I was given an estimate for the procedure.

 

Contrast this with my own recent experience getting an endoscopy. The process was not smooth. At the hospital where my doctor performs endoscopies, I had to wait over three hours for this 15-minute procedure. People, outside of my own doctor, were definitely not attentive. Most importantly, when I asked for an estimate a week before the procedure, everyone I talked to – from the hospital to my insurance company to my doctor’s office – gave me every variety of “I can’t tell you that.”

 

It’s that last part that I want to focus on because it has big implications for the healthcare market.

 

Over the last 25 years, healthcare as a share of US GDP has shot from around 8% to over 17%. We spend almost double the amount per capita on healthcare than the industrialized world average.

 

The Affordable Care Act attempted to flatten the cost curve through various methods including block payments and market-based initiatives to increase competition. Alternatives, such as giving people set amounts in the form of vouchers, are ways to constrain the amount of money available to spend on healthcare, forcing providers to adapt.

 

I would suggest that increasing cost transparency would help whatever approach we use. After all, an efficient market is made up of informed consumers and meaningful competition. Consumers make choices based on their self-interest. Organizations can compete for their dollars, leading to innovation that drives costs down. But without cost transparency, the system sputters.

 

I realize that our healthcare market is complicated, made of a vast series of agreements that can change from organization to organization and location to location. Certain treatments, like emergency care, are unexpected so you can’t shop around. And my experience may be atypical. Other healthcare facilities and insurance companies may be better on this issue than others. I know that some insurers have developed apps to help decipher some of the cost black hole.

 

But if we’re to have a market-based system, then we should do everything we can to make the market work better. That means increased transparency as a matter of national policy. The costs are simply too high not to.

 

After all, I got a timely, accurate estimate for my dog. It was clear. I didn’t even have to ask for it.

 

Why shouldn’t I expect the same for myself?

Marketing Agency Blog Post Author of Healthcare Cost Transparency Is Important for People, Too

April 3, 2018
Written by Tim Burr

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