No. of Recommendations: 1
There is no reason at all to assume that a market for health care services would look like the market for, say, raw lumber or white cotton t-shirts.That's great, since no one has.
So the reason we don't have a lot of transparent pricing in health care services markets is because they're affected by market failure, which market failure has to be remedied by government intervention if it would be changed. Which is (again ironically) exactly what you're claiming can't and shouldn't happen by your appeal to "hundreds of years of economic outcomes across hundreds of millions products."There are a number of reasons why we don't have price transparency in medical markets. One reason is the entire negotiated price system, which acts as a contract between the hospital/provider and the insurance agency. Notice how the patient is left out if it.
Mandating price disclosures isn't going to get consumers or producers to start competing on price, because consumers almost never actually pay the price for services covered by third-party payors (and thus have no incentive to take it into account), and even if they did lack the information necessary to evaluate whether pricing differentials are justified or not and face very high acquisition costs to obtain that information.
It's not likely to make any difference, Dope - despite the promises and expectations of people who advocate for it, like those in the article you linked to.It will make a difference by merely exposing misaligned value propositions and highlighting inefficiencies.
Momentum is building for more price transparency in medical markets.
Want an example of it working? Look no further than prescription drugs; there are more and more calls for it:
https://www.ama-assn.org/system/files/issue-brief-...To empower patients and address health care
costs, the AMA encourages prescription drug
price and cost transparency among
pharmaceutical companies, pharmacy benefit
managers (PBMs), and health insurers. https://pmc.ncbi.nlm.nih.gov/articles/PMC11129567/Parente used an upper bound analysis to estimate the impact of the price transparency rule for the commercial population by 2025 for income level, region, and state. 52 Using the 40% reduction in expenditures for “shoppable” services by shifting from negotiated commercial prices to cash prices suggested by the analysis from Lawrence Van Horn et al 54 —the same estimate used by the White House and HHS in 2019—Parente estimated the overall impact of price transparency for the commercial population in 2025 to be as high as $80.1 billion. 52 The analysis notably projected greater percent savings for low income beneficiaries at or below 137% of the Federal Poverty Line and variation across regions and states. It also projected that the growing use of high deductible health plans may reinforce potential savings from price transparency, because recent research has shown that price information leads to a shift to lower cost providers, in particular for those beneficiaries subject to high deductibles. 55 It should be noted that the growth in high deductible plans reinforce the broader, consumer-oriented changes in U.S. health care that we have been discussing.And there's a growing pile of literature out there with studies galore...
