“Transparency” is one of those words that politicians enjoy tossing around as if people need more information in their lives. There is some value in transparent legislative sessions, judicial proceedings and regulatory decision-making, but sometimes policymakers use increased transparency as a smokescreen to avoid addressing systemic problems and structural failures. For example, members of both political camps in the United States seem to think that simply making healthcare pricing more transparent will have some measurable impact on the staggering cost of medical services in the country.
The catalyst for this meditation was an opinion piece from the right-wing Washington Examiner in which the writer argued that Republican efforts to reduce healthcare costs would be far more effective than any liberal attempt at establishing single payer medical coverage. In true conservative fashion, the writer echoed the virtues of “choice, transparency, and competition” as a solution to the current chaos in American healthcare. These are the typical euphemisms for deregulation, a favorite rallying cry of the political right that almost always does exactly the opposite of what they claim. A closer reading of the GOP’s “Healthy Future Task Force” wish-list reveals precious little that would lead to major changes in the way healthcare is delivered in the United States, instead focusing on minor tweaks that, while useful, would have an unclear effect on the overall price tag. The focus of the HFTF, unsurprisingly, seems to be minimizing the amount of change to “The System”, insisting that all we need is more innovation, more technology and more transparency.
This position is not unique to Republicans. The individual mandate, the most controversial and litigated element of the Barack Obama’s flagship Affordable Care Act, also missed the target by assuming that the core mechanics of the US healthcare system function well and all that was needed was increased access to insurance coverage. Neither the ACA nor whatever scheme congressional Republicans are developing will make a dent in inflated healthcare costs without addressing this fundamental issue: healthcare should not be a business. You cannot hope to make meaningful progress in reducing costs when the entire industry is built upon the generation of revenue.
This brings us back to the idea of price transparency. The Centers for Medicare and Medicaid Services (CMS) have also chimed in on this subject and have enacted at least two notable rules pertaining to transparency in healthcare pricing. The first (“Requirements Related to Surprise Billing“) was originally released in 2021 and was only recently finalized in August of 2022. Its goal was to protect certain consumers (i.e. patients) from unexpected costs associated with out-of-network care. It also included rules to force hospitals to provide estimates on medical procedures and treatments, but only for uninsured or self-paying individuals. The second (“Health Plan Price Transparency“) seeks to expand this idea of transparency to health insurance companies, requiring them to make similar estimates and costs available for covered members and the public. Both of these policies are beneficial as they remove at least a few layers of secrecy that has long obscured medical billing and finances. However, there is one element of the rules that seems to misunderstand the way people seek and obtain healthcare. This is a common misconception among proponents of the increased pricing transparency doctrine.
Both the Health Plan Transparency rule and Examiner piece spin access to pricing information as a win for consumers because it allows them to compare and make the most of their healthcare dollars. I feel this is a gross oversimplification of how people spend money in the healthcare system. Both assume that people shop for medical procedures the same way they shop for a new refrigerator: they do research online for features, price and design and conduct a cost/benefit analysis before heading out. Perhaps some people looking for elective procedures put this kind of time and effort into making medical decisions, but few people experiencing a medical emergency are going to make such and effort. Additionally, insured people are almost always limited to what hospitals, clinics and even medications they can access depending upon their plan’s requirements. This doesn’t even take into consideration that many people may only be geographically proximate to one hospital so knowing the self-paying cost of an MRI (just the scan, not the radiologist interpreting the scan) is immaterial.
Consider the following: a patient (we will assume they are self-paying) needs a CT scan. They have two hospitals they are comparing. Alpha Health’s website quotes a CT costs $450. Beta Health’s website quotes $370. Alpha’s hospital is 10 minutes away and has ample parking. Beta’s facility is almost an hour away but has a newly renovated radiology department. Upon making a few phone calls, the patient learns that Alpha has no appointments available for the next two weeks, while Beta has an opening in just four days but it’s at 8:30 in the morning. The patient also remembers that their grandfather was hospitalized at Beta and ended up dying from a PICC line infection; they have no firsthand experience with Alpha but their hospital does have decent reviews online.
This example illustrates just how much more goes in to deciding where to receive medical services than just price. In fact, I would argue that most people would find the pricing information of limited to no value seeing as how there is such a relatively small difference. Acting as if people shop for medical care is, for the most part, disingenuous and minimizes the reality that most people (whether insured or not) can’t treat healthcare like the appliance department of a big-box hardware store. Yes, if healthcare consumption was like picking out a variety of orange juice, perhaps knowing the differences in price would help pressure healthcare systems to reduce their prices as supermarkets tend to do. However, healthcare decisions are multifactorial and are made on so much more than simple economics.
There is also the fact that simply making prices known does nothing to explain the rationale behind those prices. For example, it’s one thing to know that Alpha’s CT costs $450 but why does that scan cost $450? Also, is there any significant difference in the quality (whether in the imaging itself or the interpretation of the imaging) between a $450 scan and a $370 scan? Why couldn’t the scan be $300 or $150? Why are policymakers interested in transparency but only insofar as it does not disrupt the larger healthcare machine or disturb its for-revenue foundations. The most likely reason is because too much transparency threatens the profitability of the system and stokes the fires of radical overhaul. For the conservative policymaker, it also places more onus upon the patient/consumer and makes them more responsible for the success, failure and expense of healthcare while doing nothing to improve the patient/consumer’s understanding of their own health — all done in the name of individual choice.
Transparency without a commitment or interest to turn that transparency into action does little to direct change. It’s of little concern whether I know the price differences between broadband providers if only Charter/Spectrum provides service in my geographical area. What good is there in shopping for electric utilities when I can only connect to Duke Energy? Thanks to decades of laissez faire oversight and astonishingly permissive regulatory approval (spearheaded by conservative administrations), actual choice has been largely eliminated in diverse industries from air travel to mobile phone service. The illusion of choice is only slightly better than having no choice at all and pretending that choice alone or even to a major extent will help bring down healthcare costs is laughable. It is also foolish to act as if we can somehow do the job with more technology or more “innovation”.
The same can be said on the subject of climate change: by focusing so much on new technology or massive infrastructure investments lawmakers and policymakers overlook the possibility of lessening consumption. Why? Because lessening consumption shakes the economic order, the same reason no one in positions of power want to admit that a way to dramatically reduce healthcare costs is to reduce the consumption. No one wants to broach the subject that not every case that makes it to an emergency department is an emergency. How many ambulance trips do county EMS crews make to bring minor injuries or discomforts to hospitals? How many people decide, for whatever reason, to forgo routine procedures or therapies (e.g. hemodialysis) only to end up hospitalized time and again because their choices placed them in great danger of dying. How much “defensive medicine” do physicians perform to avoid litigation, angry patients and pressure from administrators? How much charting do they have to do in an effort to squeeze every last penny out of insurance companies trying to reimburse as little as possible? Why do hospitals spend millions of dollars on EHR software that cannot (because all data, even health records, are proprietary) access information from any other EHR system? Maybe a little transparency will help, but the powers only want to shed light on small sub-systems and aesthetic details rather than rip off the shroud and expose the entire machine to scrutiny. Doing that would necessitate real work, and lawmakers tend to shy away from that, especially when it comes to long-haul issues that won’t be fixed in a single Congressional session or even a single presidential administration.