Friday, October 25th 2013

Transparency And Volume Can Help Healthcare

Competition can be good for driving down the costs of healthcare. A lack of transparency is one obstacle to legitimate competition. Prices are negotiated between payers and providers without a sense from the actual consumer or a sense of what payers have negotiated with other providers. Providers keep their numbers lower to upwardly influence their negotiations with payers.

I’ve written before about Devi Shetty and his ambitions in India and the Cayman Islands. What I largely took away from him is efficiency and volume and how regulations increase costs. But a big part of his effort is also transparency in costs.

And while I don’t know if it will stick, such transparency is coming in small pieces to the U.S.

Here’s a profile of the Surgery Center of Oklahoma which is publishing its prices, taking cash or direct payments only and negotiating directly with businesses as a matter of course.

Of course, one thing the Affordable Care Act does very limit for is transparency. The hopes for this as a true trend and as a disruptive force in American health care seem muted at best.

But here’s to hoping.

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