Let’s say that i have advertised the price of an anterior cruciate ligament reconstruction (all-inclusive) at $6990.  Let’s say that the implants (screws, fixation devices, etc) are included in that price (I don’t mark up implant costs).  Let’s say that 1 of the 10 surgeons at my facility that does this operation insists on using an extremely expensive implant, one coming from a manufacturer with which he has a “relationship”….no such partner exists here…this is just for illustration.  I can either send him  patients (business) which means we lose money at the surgery center, or I can charge a whole lot more if he does the surgery, which prices him out of range, or at least begs the question of why is he so much more?

This is the market at work.  While central planners would work to institute price controls in the market place, the unfettered market would place the outlier physician’s price under the microscope.  Transparent pricing would quickly reveal that something didn’t smell right.  While legislators would outlaw physician owned distributorships, transparent pricing would empty the waiting rooms of physicians who play these games.  

Who benefits from non-transparent pricing?  All of the folks who would suffer if their shenanigans were discovered, that’s who.  The only way that unethical physicians, pharmacies, hospitals, physical therapy clinics, etc. can thrive is for pricing to be veiled to some degree.  Otherwise, comparison shopping would create value questions, none of which would have satisfactory answers in the case of the gougers.

The answer to “implant” profits is not a tax on implant makers any more than the answer to fraud in medicine is government goons.  The answer is price honesty and a movement away from third party payment, government payment for healthcare, in particular.  What is Obamacare?  If you guessed “just the opposite,” you go to the head of the class.  

G. Keith Smith, M.D.