by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Tom Coburn writes for Fox Business about the role of price transparency in improving American health care.
Democratic presidential primary candidates are spending a lot of time talking about health care but no time talking about the primary driver of runaway costs – the lack of price transparency.
Price transparency is the right to know what things cost before you buy. Consumers demand price transparency in every other area of the economy.
Imagine, for instance, if the prices for products on Amazon suddenly disappeared. Consumers would be apoplectic. But in health care opacity is the norm. The Trump administration wants to change that.
In June, President Trump issued an executive order requiring hospitals to post actual prices. The president said, “To make fully informed decisions about their health care, patients must know the price and quality of a good or service in advance.”
Only in health care is this radical. Making price discovery a norm in health care could be a game-changer and help reduce the $765 billion our country wastes every year through inefficiency.
Even progressives acknowledge America’s third-party payment model, which separates patients from the purchase of health care, doesn’t make sense. As economist Jonathan Gruber, a key architect of ObamaCare, says, “[T]here really isn’t a single health care expert who would design a system from scratch which would include this feature.” …
… Today, our health care system is like a football game in which one team (consumers) is wearing blindfolds while the other team (third-party payers from government to hospitals to insurance companies) runs up the score at will.
And run it up they have.