Policy: A Word About Transparency

Price transparency has been one of those sleepy issues that has been gaining steam in the courts (around prices charged to the uninsured) and in the recent media regarding the White House's proposal to force providers to publically disclose how much they are being paid by insurance companies. For a quick synopsis of the issue click here.

So who should cares about pricing technicalities in the health care industry?

We should all care.

Granted, pricing transparency increases competition (which is why many providers are against public disclosure) - but, I believe, it is instrumental to helping patients (and their employers) better understand where their moneys (copays and insurance payments) are going (which incidentally, is likely to the insurance company given their huge windfalls this fiscal year).
In short, price transparency will force providers to compete within the broad categories of:

• Price
• Quality
• Convenience

While the government will continue to ensure a basic level of quality in institutions, price transparency will help people decide whether they want to valet park, watch HGTV post surgery, and have a massage prior to discharge. It will help patients decide whether convenience is more important than price, and force providers to compete in all three dimensions (truly forcing health care costs to decrease).

We have it today in the Minute Clinics. Here we pay $60 dollars to get a prescription for the cold I know my child already has. Since they take my insurance, it's the same price as a primary care doc, so they win my business based on convenience. If they don't take my insurance, I assess if $60 dollars worth the convenience. If I don't have insurance, they compete on price (as a primary care doc is $100 plus - I think). As the quality of my treatment is based less on diagnosis and more on treatment...I'm willing to be assessed by the nurse practitioner.

I've used them twice... and both times the nurse sent me a personal thank you note....another dimension of the quality category.

Yet I get distracted...

The real point of transparency in my mind is that it re-builds trust in the industry. Without the patient's trust that s/he is getting appropriate service for what they have paid into the system...people will grow to resent the system itself. Without transparency, patients will feel doctors are seeing them quickly because they want to make a greater margin on their business and they'll believe hospitals want to use the cheaper hip implant to simply save money, or they'll think the insurance company is just pocketing dollars I'll never see for decades.

Without transparency we will lose the public's trust. And that is not a policy dilemma, that is a cultural backslide that will take generations to fix...just as we're all getting older.