So you've been able to compare name brands to generics across mail order and retail pharmacies plus Amazon over 40 years? Wow. I'm impressed.

No - I've been able to get price information for 40 years. There have been innovations in the way that I can compare prices across multiple retailers for any product, but those are general to retail and not limited to drugs. Forty years ago I couldn't compare name brands to generics across mail order and retail stores for clothes or canned soup or what have you, either - that was a limitation of the retail chain, not price transparency.

And this is where insurers will start providing incentives to consumers, won't they?

No. Because it's not worth it to them to add that layer of complication. Health care insurance customers are already overwhelmed and unhappy with how complicated things even without having to deal with the firehose of information you'd need to make an informed decision about pricing of most medical services, and health care insurance providers face enough administrative costs in dealing with the logistics of administering these plans. It's not going to be worth it to do that.

How do we know that? Because health insurers already have all that information. Remember, all these prices are very transparent to the insurance company. They're the ones who decide in advance whether to pay those prices for those services from those providers. Heck, in a lot of cases they're directly involved in the process of setting those prices, because they often negotiate rather than function as price-takers.

So it's already a trivial matter if a health insurer wanted to provide pricing to their enrollees and provide some discount if they were willing to go to the low cost provider. But we don't see health insurers doing this. At all. Why not? Well, when all the companies offering a product (like health insurance) uniformly decide not to do something, it's typically because it's not worth it to them to do it. If they could reduce their outlays (and thus increase their profits) by getting their customers to choose the $1,200 doctor instead of the $1,300 doctor, it would be quite surprising if they didn't. The most likely explanation is that it wouldn't save any money - that the costs of administering that kind of program (direct in administrative and transactional costs and the rebate to customers, indirect in the form of customer frustration and annoyance) outweigh the economic gains.

You want the real world illustration of millions and millions of products? Haggling. When you go into a supermarket, there is one price for any particular good. That 12oz can of Diet Coke has a price on the label, and that's what you pay. You don't get to negotiate, you don't get to buy products you would buy if the price were 10% cheaper (and the retailer loses a sale they might be willing to make). You get some loss of efficiency in pricing because you don't exactly match every point on the supply curve to every point on the demand curve, but instead just have "one price fits all." But the reason that millions of firms do that for millions of products is because the transaction costs of seeking out that perfect price efficiency are higher than the gains they would see from the perfect price efficiency. Heck, it's why Disney World went from a "per-ride" pricing model to a singe entrance fee, all-you-can-ride model - sometimes it's just a more efficient way to sell your product to not be constantly bargaining everything.

So too with health care. The business model is that you pay your premium, and it covers everything that's covered. You don't have to worry about the pricing, and the insurer doesn't choose to involve you with the pricing even though they could. Because the cost of doing that isn't worth the pennies that would be saved.