Critiques of Healthcare Price Transparency Miss the Mark
Healthcare expert Brian Blase, Special Assistant to the President at the White House National Economic Council from 20'17 to 2019, takes on critics of healthcare price transparency in a new op-ed in The Hill. He explains how price transparency criticisms, including that patients are shielded from prices and that price disclosures lead to tacit collusion, miss the mark. He points to significant evidence of price transparency’s effectiveness, including:
New Hampshire consumers saved 36 percent on average on their medical imaging costs after the state established a price transparency site.
High-priced facilities in California reduced their prices by an average of 20 percent to avoid losing customers after the state introduced reference pricing for state employees.
Parkview Health System in Fort Wayne and Anthem, Indiana’s largest insurer, lowered their prices by 25 percent after their initial contract, in which Anthem was paying more than four times Medicare rates, was made public.
Blase concludes:
Economic theory is clear that prices are crucial to ensure the most efficient allocation of resources. But the current arrangement blinds purchasers to health care prices. Price transparency is just one aspect of a health reform agenda that harnesses choice and competition to improve the status quo. The recent federal rules that require both hospitals and insurers to provide price information are an important step to help patients and employers direct their resources in ways that allow purchasers to reduce overcharging, punish high-priced, low-quality providers and ultimately generate better value out of the health care system.
Read the full op-ed in The Hill here.