Last month, Florida’s new law regarding price transparency requiring hospitals to publish “average charges” went into effect. But the concept of price transparency in our dysfunctional system is a scam. It misleads the public into believing help is on the way; easing political pressure from consumers who are livid over skyrocketing healthcare costs.
This new law perpetuates the current abusive system in which patients are unable to determine their costs, and shopping for good value is, by design, impractical. The idea that publishing price ranges or average prices will help consumers or spur competition, insults our intelligence.
The good news is that ending U.S. healthcare cost misery is easy.
Healthcare is the only industry exempt from the rigors of the free-market system. Ask the price of any service, and you will always receive the same answer: “What insurance do you have?” Billing is determined by how much can be extracted from each patient on a case-by-case basis.
Under the new law, value and market price continue to be irrelevant concepts. Physicians, hospitals and labs will continue to be lawfully able to charge patients who are out of network or uninsured 10 times more than “normal” rates. In any other business, this is fraud.
Price-gouged consumers will continue to have no practical way to shop or to defend themselves against unreasonable medical bills. In virtually every case, the cost of litigation makes defense against even the most blatant medical price gouging impractical. The result is health costs are the leading cause of personal bankruptcy.
The healthcare industry spends more on lobbying than the defense, aerospace, and the oil and gas industries combined. Political influence allows the industry to foist upon our nation the highest cost medical care on Earth, by a margin of at least 50 percent per-capita, while providing significantly lower quality than exists in other wealthy nations. The new price-transparency law was allowed to be enacted only because it does not interfere with the industry’s elimination of real pricing; and, therefore facilitates its continued protection from price competition.
The solution/ Require healthcare providers to publish actual prices, just like all other businesses. All patients, insured and uninsured, must be billed the same published rate for the same service. Hospitals, physicians and labs should have continued freedom to set their own prices, but predatory pricing — a different rate for each patient — must be prohibited.
When rates are set, patients will be able to shop for good healthcare value. Providers will be forced to compete based on price, quality and service. Healthcare costs will plummet, as will the cost of health insurance, which is simply a direct function of underlying medical costs.
However, the new requirement to publish “average prices,” while allowing predatory healthcare pricing to continue, simply assures that providers remain shielded from price competition and costs continue to skyrocket.
It is truly sickening (pun intended).
Steven I. Weissman, an attorney, was interim president of Palm Springs General Hospital in Hialeah in 2013.