For $1900 we fixed a young man’s broken nose yesterday, a procedure for which he was quoted $20,000 at a local “not for profit” hospital. (Keep in mind that our price included the surgeon’s and anesthesiologist’s fees while the hospital quote did not.) ”What can I get away with” is the pricing methodology I have ascribed to hospitals like this. After hearing the $20,000 quote, the young man’s mother did a quick google search and was pleased to find our facility and the price for the procedure her son needed. Without having to ask.
State legislators (in several states), excited about our upfront and transparent pricing, have asked me on many occasions to comment about their efforts to mandate price transparency. Without exception, I have frowned on this, as I have seen this as an opportunity to redefine medical price transparency into an unrecognizable mush, affording no transparency whatsoever. This would allow those who value their price opacity to lay claim to the “transparency” label. I also saw this mandate as an opportunity for the unscrupulous legislator to sell exemptions to hospitals willing to throw down sufficient money to by them.
Representative Arthur Hulbert, a state representative here in Oklahoma, has a new twist on the role of the state in mandating medical price transparency. (Keep in mind that nowhere in his proposed legislation does he dictate what anyone charges, only that they be upfront about it.) Here are the two points he has made which I have found compelling:
1) To the extent that a hospital or medical facility is the recipient of government money, it is a government enterprise and subject to government oversight. The legislation he has proposed here in Oklahoma specifically exempts any facility that does not accept government funds, consistent with his desire to avoid meddling in the purely private market.
2)There are two ways to classify healthcare facilities that do not currently display their pricing in the way that we do. There are those who want no part of this and there is a second group who would like to display their pricing but have been advised by their lawyers that doing so may violate some federal statute or regulation. Mandating transparency lets this second group “off the hook.” After all, if mandated, “we had no choice” would be the excuse used for anyone at the federal level that had a problem with it.
That Rep. Hulbert’s proposed bill could be hijacked to achieve the opposite of its stated intention remains a concern of mine, as sadly this is the fate of countless well-intentioned efforts, as the opportunists morph the new law and power into their own benefit. I remain opposed in principle to legislation mandating the fundamental principles of the free market, but must admit that Rep. Hulbert’s two caveats have compelled me to reconsider my black and white stance on this issue—as have stories from countless patients who have been bankrupted by inappropriately priced procedures like the young man’s broken nose.
G. Keith Smith, M.D.
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