Arguments for and against health-cost transparency are featured in a New England Journal of Medicine piece published March 10, 2011.

An excerpt: “It is difficult to defend the obscuring of health care prices. The challenges associated with leveraging price transparency to moderate overall health care spending, however, may explain the limited role that this tactic has played in health care reform proposals. Attempts to increase cost-conscious shopping and reduce spending through price-transparency programs are appealing, however, because these efforts can be implemented without disrupting current payment systems and because market-based approaches to health care reform generally enjoy broad political support.”

Patients quite often believe that higher-priced care is better, say the authors, Anna D. Sinaiko, Ph.D. and Meredith B. Rosenthal, Ph.D.

The comments are particularly revealing. A California doctor, Thomas Najarian, writes, “My wife needed a breast MRI from a university hospital last year. Their charge without insurance was over $8,000, with a cash discount to over $5,000. They refused to state what they would receive from a typical insurance contract, but the amount was closer to $1,000.”

Another doctor, Johnathon Ross MD, MPH, writes: “As frustrating as it may seem to economists, individual health care services will never behave like an ordinary economic good especially for the most expensive services. For example, if open heart surgery was half off would you have two? So if we have market failure we will need regulation as second best. Many of us who have studied health policy believe that a single payer (an improved and expanded Medicare for all) is the best policy solution. The administrative simplicity of this type of reform would allow national savings approaching $400 billion yearly. This is enough to cover all the uninsured and improve coverage for the rest of us wit no added spending. It is only those that are profiting from the current sickness care non-system that want it to go on unchanged. We have had market forces at work in health care for 20 years since the Clinton plan failed. Prices have continued upward despite higher co-pays and deductibles and ever increasing numbers of uninsured now 50 million who would have the most incentive to price shop. Market won’t work to any significant degree to control. If Congress was price shopping they would find that single payer national health insurance is the right buy for the country as a whole. We need an improved and expanded Medicare for all. It will save money, save lives and it is the right thing to do.”


Jeanne Pinder

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...