The U.S. government on May 8, 2013, released price information for
some of the most common medical procedures for the first time.
Here's what we learned:
Costs vary by state: Six states' hospital costs came in
uniformly high, while other states' costs came in either uniformly
low or average. These cost disparities have little or nothing to do
with the overall quality of the hospitals in a particular state.
If that's the case, shouldn't a given procedure at a hospital
in one state cost about the same as that same procedure at a
hospital of comparable quality in another state?
Costs vary by hospital: In New York City, for example, treatment
for a complicated case of bronchitis or asthma costs a mere $8,153
(average) at Metropolitan Hospital Center. Treatment for that same
condition at NYU Hospitals Center, just 63 blocks away from
Metropolitan and on the same street, costs $34,310 (average). You
could pay for the treatment at Metropolitan 4.2 times over before
you reached the amount you would spend for that same treatment at
NYU. Shouldn't patients be presented with that information so
they can conduct the same cost/quality/benefit analyses on which
they rely for decision-making about commercial purchases?
Without an open market, health care costs are based on what
consumers (and largely, insurers) are willing to pay, not what the
care is actually worth or what it costs to provide (for example,
there have been instances of life-saving drugs that enter the
market at relatively low costs that then grow exponentially as
patients continue to purchase the drug at higher and higher costs,
simply because they need it to survive another year).
Price Revelation a Long Time Coming
This was the first time the government had required this
information to be made public. The
United States spends more than twice as much per person on
health care as other industrialized countries, yet we remain
one of the only developed countries without basic health
insurance for all citizens.
In a capitalist economy where we eschew monopolies and rely on
our open markets to shop for the best value on everything from gas
to groceries, why have we not been able to do the same with health
When a doctor says we need something, we trust. We trust that
the doctor is right about our diagnosis and treatment, because we
don't know. We trust that whatever that treatment costs is what we
need to pay, because we have no way to know. And while we have the
opportunity to get a second opinion, what we don't have is
the opportunity to shop around for cheaper costs. Today, most
doctors and hospitals are not even able to give you an
up-front cost estimate, even upon request; you're expected to
undergo tests and procedures, and then you wait for the bill and
hope you'll be able to cover whatever remains after insurance (if
insurance is even available).
How can we reconcile that blind trust toward the health care
sector with our attitude toward the commercial sectors, where we
demand and rely on transparency to make the decisions that are
right for us and to control costs across the industries?
Furthermore, with the
Patient Protection and Affordable Care Act set to go into full
effect next January, how can we afford to cover additional costs
for the currently uninsured without making even the smallest effort
to see that the costs we cover are fair and reasonable? While many
factors driving health care costs are out of our control, is an
open market where providers are required to compete-thus driving
down prices just like in the commercial sector-really that much of
Even with this cost information, there remains the question of
quality vs. cost, the often difficult process of "shopping around"
for additional opinions and prices, and many other issues that
factor into what we are willing to pay and where we are willing to
go for our health care. But the reveal of this information has
forced honest conversation. Why does that procedure cost so much
more at "Hospital A" than it does at "Hospital B" just down the
street? Is it the quality of the care I will receive the same at
either place? Am I willing to pay more for higher quality? These
are not questions we have been able to ask before.
Simply empowering patients with the ability to perform
cost/quality/benefit analyses for their health care decisions-even
if they choose not to do so-is a step in the right direction. And
who knows, with more big changes on the way, maybe our health care
system is finally ready catch up with the rest of the developed