This excellent San Francisco article about health care costs, shopping around and transparency is spot on. A lack of transparency and discussions about costs is central to the health care dilemma in the US.
When folks are not paying their own bills, they don’t care what things cost. That is why the changes we need are frequently the opposite of what the liberals want to impose. The left wants the government to negotiate all health care service prices and make decisions for the populace. Those on the right recognize the problems we have today but want to lead with individual decision making at the forefront of any changes.
But how does one choose when you don’t hear the cost of the alternatives?
When my brother lived in Hong Kong during the early 1990’s he had a high deductible on his health insurance. His doctor wanted to send him for an MRI. He asked what the cost would be and what the alternatives were. It turned out that since he had had very few x-rays that and x-ray would be every bit as revealing (in his case), would not result in an overexposure to radiation, all at a far lower cost. Since he was paying the bill guess which technology he went with?
I had knee surgery a few years ago and the doctor needed me to get an MRI (an X-ray would not do the trick). He suggested I go to a nearby hospital for it because they had a neat electronic network with which they could share the results with my doctor. But I was footing the bill for the MRI so I shopped around. The recommended hospital wanted to charge me $2,300. But I found an MRI center nearby (but in another state) that would do it for $800. Guess which way I went? But then I told a friend in the medical billing industry the story and he busted my balloon by telling me that if I had called him that he could probably have gotten it for $300.
And finally a few months ago our cat (named Catskill) was quite ill. We took her to a large specialty veterinarian hospital. At every step of the way the costs were explained to us. This kind of procedure would cost this much and have certain other risks and benefits. This business was geared towards a client base that almost universally was paying for their own bills (the pet owners not the pets). Cost was not an ancillary issue like a human patient covered by an all inclusive health insurance program. By the way Catskill is doing much better now.
Transparency is one key. Competition (and I don’t mean competing with a government subsidized entity) is also critical. And when you install a system like health care savings accounts where individuals get the impression that they are spending their own money or high deductible insurance policies where folks are really spending their own money you get a whole different set of behaviors and dialogue with the doctor. And when you combine transparency, competition and individual choice we will see remarkable progress and lower costs for health care in America.
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