No. of Recommendations: 3
I'm pointing out that because that system doesn't exist, we don't know whether it would have the real-world impacts you're assuming.Price equilibrium is far from an assumption. It's a proven reality backed by hundreds of years of economic outcomes across hundreds of millions of products.
But in Econ 201, we learn that sometimes markets have characteristics that keep them from functioning properly - and that in such instances markets can be bad unless the government intervenes. I mean, the irony is that this is exactly what you're proposing. The independent actions of all the private market participants in health care have not produced the type of transparent and price-based market that we expect in the absence of market failure, and you're proposing some external policy be imposed on the market to change that.And is the medical market completely unregulated? Hardly.
The policy of price transparency has already been imposed. It happened in 2020 and took effect in 2021. After a slow start, hospitals are complying.
And now there are studies out about price disparities. They say some interesting things:
https://www.mckinsey.com/industries/healthcare/our...After a slow start,2 payers and hospitals have made progress toward publishing negotiated rates.3 In the meantime, regulators are continuing to take actions to further advance price transparency. For example, the Centers for Medicare & Medicaid Services (CMS) has shortened the time hospitals have to respond to notices of noncompliance and has imposed automatic fines for noncompliance.4 The US House of Representatives recently advanced legislation that would impose more price transparency requirements on additional types of care delivery organizations.5 Moreover, state and local governments in Massachusetts, Minnesota, New York City, and Virginia have enacted their own price transparency requirements.Wow, Massachusetts is a locale I wouldn't have expected there.
What sorts of things are we learning? The article actually covers what you and I have been talking about:
This article puts price transparency rules in context and explores their implications, including:
-the existence of price dispersion in US healthcare that is not explained by differences in quality of care
-how price transparency rules address some market inefficiencies driving this price dispersion but leave others unresolved
-that patients—if given proper incentives and information—would be interested in shopping for care that amounts to 20 to 25 percent of US healthcare claims spend, potentially unlocking gains in affordability for consumers
-the potential for price transparency rules, together with other innovations, such as advances in technology and analytics, to empower patients to shop for care more than ever, helping offset growth in healthcare costs
-implications for healthcare industry stakeholders, potential shifts in industry profit pools, and first-mover advantages for organizations that capitalize on this opportunity to improve healthcare for US consumersMany benefits.
