It's not just fancy electronics - it works for healthcary stuff too:
Look at how cheap plastic surgery is! Free market at its best!
However, past the above sarcasm and after a few more minutes of deep reflection, it starts to unravel that price transparency just does not work if there is no free market.
And guess what: healthcare in the U.S. is no free market: https://www.quora.com/Is-free-market-healthcare-actually-pos...
Yes, price transparency works well in a free market
No, healthcare is no free market. Definitely not the U.S. market.
Healthcare in the U.S. is a pseudo socialized care where private healthcare dollars subsidize social care programs.
Employees on employer sponsored health plans, which are only federally regulated and rarely have the additional protections that the states they reside in afford them are nickle, dimed and squeezed for the very last dollar that can be extracted from them.
Employees are beholden to the employer choosing good plans for them, keeping those good plans around at affordable prices and continuing to be in business and able to employ these employees. TOO MANY ifs and buts if you ask me but I digress.
As long as we have something like the EMTALA or similar where services have to be rendered regardless of ability to pay, the deficit in payment recieved will have to be covered somehow!
Here are two scenarios with Price transparency:
Base Scenario:
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Provider: I charge $100 cash to see a patient
Insurance company (InCo) 1: We will pay you $170 if you agree to work with us. You cannot tell our insured that you will accept $100 cash or we will blacklist you.
Provider: ok
Insurance company (InCo) 2: We will pay you $120 if you agree to work with us. You cannot tell our insured that you will accept $100 cash or we will blacklist you. Provider: ok
Medicare: We will pay you $70 if you agree to work with us. Patient 1 (w/ InCo1): Doctor, I want to see you. How much do you charge
Provider: I cannot tell you. Depends. Speak with my biller
Patient 1 calls biller and they estimate $180
Patient 2 (w/ InCo2) has the same conversation and gets a $150 estimate
Patient 1 and 2 are friends and they compare notes.
Patient 1 complains to InCo1 that he paid too much money for the same visit that costs his friend, Patient 2, much less. Plus there's this website that shows the Provider accepts on the average, less than $120!
InCo 1 calls Provider: Hey! We heard you charged less for someone else! Trump has this website that says you accept on the average, less than $120! You better charge us less too or we will not renew our contract!
Medicare patient: Doctor, I would like to see you Cash patient: Doctor, I would like to see you
Scenario 1: ----------
Provider: InCo1, Fair enough. I guess I will absorb the cost of your paperwork, cumbersome claims process, 90+ days of payment delays and reduce my reimbursement amounts because I don't have student loans, rent, staff bills to pay. Medicare patient, I will see you even if I lose money because I'm in this business because I love it. Cash patient, I will honor my $100 rate but I will appreciate if you could tip me $20 because I just lost a few hundred
InCo1: No, you have to accept $100 now because you're a push over
InCo2: Yeah, what they said. It's not fair you charge us more! Cash patient: Do you want this money or not?
Scenario 2: ----------
Provider: InCo1, InCo2, not interested. There are few of me compared to the number of insureds you have and I will not absorb the cost of your paperwork, cumbersome claims process, 90+ days of payment delays. Infact, to renew our contract, my reimbursement amount is now $300 because dealing with you is too much of a hassle. Medicare patient, I will not see you because I am losing money on you. Go see someone else in a better position than I. Cash patient, I will honor my $100 rate because I don't have to deal with all the nonsense but only if you keep your mouth absolutely shut. If this $100 ever makes it to a Yelp review, our relationship is over. I almost considered charging you $200 instead because you don't have an insurance company bargaining for you but I have a weak spot for the unrepresented. President Trump, I charge everyone $300!
InCo1: Yeah, he charges $300. That's literally what it says in our paperwork. Here, see it!
InCo2: Yeah, he charges $300. That's literally what it says in our paperwork. Here, see it!
Cash patient: I have no clue what Provider charges. I am on a payment plan and paid $150 or $100. Maybe. I don't know, please keep me out of this I just want to get better OK?
Medicare patient: I have some cash but not enough to pay per visit. Maybe I should also go into business with InCo1 or InCo2 as supplements
Which is more likely you think?
As long as we have something like the EMTLA or similar where services have to be rendered regardless of ability to pay, the solution to sane pricing is to have King Kong fight with Godzilla and keep each other in check.
We just have to ensure we can control both King Kong fight and Godzilla - and so far - they both have been very selfish and barely controllable.
We must begin with killing employer sponsored health plans and put individual citizens in direct control of their care instead of whatever the distracted HR team puts together or the even more distracted brokerage company that the distracted HR team contracted after googling for "employee health benefits examples"
Individual citizens are not even in the game. They have no bargaining power.
Time to change that. Let them regain control of which network they want to work with regardless of where they happen to work or not even work at all.
The employer might be looking for the cheapest network but the employee might be looking for a network with good coverage or covers certain doctors of their choosing etc
Why complicate matters? Keep things simple.
Politics, employment and healthcare do not mix.
Healthcare is too important.
Keep them separate. Break the ties.