The author of this blog is mistaken and disingenuous. I say the latter because he quotes Hayek to make his case that health care does not follow the same sort of commodity rules that other goods and services obey, when he is obviously no fan of Hayek or any of the other Austrians. More on this shortly.
Here is where he is mistaken. “To start with, healthcare does not lend itself to price comparisons, and comparison shopping. The high costs are often related to trauma and emergency care/hospitalizations.” This is where he is wrong. The vast majority of hospital charge events are elective and very predictable. The vast majority of surgeries and diagnostic procedures performed in hospitals are elective procedures. He is also apparently not aware of the priceline-like websites that are showing cost comparisons for various medical procedures. He is obviously not aware of our site.
Here is where I think he is disingenuous. ”It is simply not practical to ask which hospital in the area offers the best rates on cardiac catheterization while you are being rushed to the hospital in the midst of an MI.” Here he is using a twisting of the element of time to make his case. It is possible, you see, to know which hospital offers the best rates on cardiac catheterization prior to being stuffed in an ambulance and rushed to the hospital. Just as it is possible for the naive shopper to be ripped to shreds by an shrewd salesman, the same is true in health care. The knowledgeable shopper, one who has done their homework, will know exactly which hospital they should be taken to before the ambulance arrives.
This brings up another point. I used to think there was no relationship between quality and price in health care. I now know that their is. It is inverse. The cheaper the care, the better the care, by and large. How is this? It makes sense when you think about it. In order to compete, a newcomer, more aggressively competitive, must compete not only on price but quality, as well. Also, the lower the price, the greater the suspicion the buyer has that the service is of lower quality and the harder the medical facility must work to show that the converse is the case. Jeff Rice, M.D., J.D., founder of HealthCare Blue Book has also found this to be true in the development of his price and quality comparison website.
One of the hashtags attached to Mr. Halasey’s blog is “free market fetishism.” On what will he base his arguments against the free market when medical price transparency (now flourishing all over the country) is the rule rather than the exception? I’m sure he will find something.
G. Keith Smith, M.D.