A Health Care Window Sticker
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Photographer: Jim Bounds/Bloomberg.
Getting a grip on spiraling costs is critical to health care reform and in a recent Wired magazine piece, Intel’s former CEO Andy Grove sees transparency as a way toward a less confusing and less costly system.
He notes that there are wide variations in the costs of procedures. One study found that appendectomies in California ranged from as little as $1,529 to as much as $182,955. When third parties like insurance companies or the government (through Medicare or Medicaid) pay for most procedures, consumers don't know these costs and often don't shop around for the best deal.
This is unlike other areas of life. For example, when you go to an auto dealer you expect the price to be visible in the car's window to more make it less-confusing when shopping. Grove wants to bring this analogy into health care. “What health care needs is a window sticker—a transparent, good-faith effort at making prices clear and setting market forces to work,” he writes.
With this data, the information revolution we’ve witnessed over the last 30-plus years could be applied to health care. Grove writes,
In a transparent health care market, pricing and other patient data can be consolidated and analyzed to yield new insights.... With computers developed for this purpose, correlations could be analyzed, relationships between diseases and treatments studied, and individual treatments generated.
Consumers empowered with this information and analysis would be better able to search for cost-effective care that meets their individualized needs. That would increase competition and drive down costs.
Improved price transparency would be a step toward a health care system that serves patients in a more cost-effective way. And as Grove emphasizes, “Getting that transparency has to be Job One.”
Expect plenty of discussion about health care transparency and innovation at the National Chamber Foundation's Health Care Summit on Thursday. It will be webcast, and you'll be able to join the conversation on Twitter by following @NCF_Updates and using #Health2012.
