Opinion: Free market-based healthcare would promote price transparency, lower service costs
Pablo Picasso: Science and Charity, 1897. Image in Public Domain
PointHealthTech's Josie Rasberry argues that a healthcare system directed by the free market would encourage patients to “shop around” for the most high quality, cost-effective care. This, in turn, would prompt local providers to be more upfront—and reasonable—about prices. Hear that, proponents of gov't-ruled healthcare like SJ Assemblymember Kalra?
A free market healthcare system would have hospitals, doctors, and other medical service providers openly display prices and share outcomes data so patients can shop for care based on the value they receive. In healthcare, value is defined as the improvement in outcomes for a patient (commonly referred to as quality) compared to the cost the patient paid. Knowing these two key pieces of information would create competition and enable patients to regain more control over their health experiences, as long as society finds a way to help the patient become an engaged consumer. This is already happening in some areas of healthcare.
Take direct primary care (DPC) for example. DPC allows patients to pay a monthly or yearly subscription fee to have access to their doctor practically 24/7. In most cases, the subscription fee even provides labs and other tests at the heavily discounted level available to the doctors.
Another example is Lasik surgery. One Forbes article reported that Lasik surgery costs fell by 25% in the last decade despite an increase in the number of procedures and technological advancements. Since most insurers don’t cover the cost of Lasik surgery, patients are incentivized to shop around. This incentive led Lasik providers to offer a package price upfront to compete with other providers, leading to an overall decrease in cost.
The easy first step towards a free market.
Some people’s solution to the current state of healthcare is to move to a government run “care for all” method, but all that really does is shift who is paying for the same healthcare system. There is an alternative option and the U.S. is already headed towards it: price transparency.
This simple step to disclose prices (both the chargemaster price and negotiated rate) upfront not only empowers patients, but also creates an incentive for doctors, hospitals, and other medical providers to be competitive on price while simultaneously improving their quality. This would also bring to light who the truly great providers and hospitals are as natural market forces would shift patients to the highest quality providers charging the fairest prices.
This article originally appeared in PointHealthTech. Read the whole thing here.
Follow Opportunity Now on Twitter @svopportunity
Opp Now enthusiastically welcomes smart, thoughtful, fair-minded, well-written comments from our readers. But be advised: we have zero interest in posting rants, ad hominems, poorly-argued screeds, transparently partisan yack, or the hateful name-calling often seen on other local websites. So if you've got a great idea that will add to the conversation, please send it in. If you're trolling or shilling for a candidate or initiative, forget it.