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The real disease: Price transparency key to saving Medicare and lowering the debt | TheHill

The lethal combination of poor leadership and reckless entitlement spending has put us on the road to disaster. If we don’t take action now, in addition to bankrupt social programs, we’ll soon be faced with even higher interest rates and decreased economic growth — not to mention an impossible political situation when the next generation realizes that the retirement benefits they assumed were coming their way will have been cut by 21 percent. Historically, we would expect a country in our position to be faced with hyperinflation, a marked decrease in the standard of living, and mass emigration. We’re hanging on by a thread. Something must be done.

As I’ve mentioned, one of the easiest ways to extend the life of our entitlement programs is to demand net price transparency in health care. Studies show that up to a third of what we spend on health care in America is wasted. Think about that — if you were a shareholder in a company that wasted a third of what it spent annually, you wouldn’t sit quietly and trust that the problem would resolve itself. You’d demand answers and expect to see results, or else you’d sell your stock. It’s time for Americans to start demanding answers.

The reason we waste a third of what we spend on health care is the same reason Medicare doles out billions of dollars of improper payments annually: there’s no transparency on price or quality. Our health care system is so clouded with insurance, government subsidies, and profit-seeking middlemen, that no one knows the real price of any given health service.

With prices this obscured, there’s no incentive to shop around. And as long as patients aren’t shopping for value, providers will never have an incentive to lower prices. It’s a vicious cycle that keeps patients in the dark and prices high — but we can escape it. By mandating that all health care providers publish their net prices — before any rebates, discounts or adjustments — we can restore real markets to health care. This will shine a light on the shady billing practices that currently define our health care system, and force providers to compete for business, driving down prices across the board.

Mandating price transparency will not singlehandedly solve Medicare’s problems, but it’s a big first step. If transparency eliminates even a third of what Medicare spends on improper payments, our country saves $20 billion. That’s $20 billion that can be put to better use, increasing federal revenues while decreasing federal expenditures.

Principled leaders need to stand up, implement and enforce price transparency, and follow it up with other smart regulation. If they do that, we can save Medicare before it’s too late, and put America’s entitlement programs back on track.

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The real disease: Price transparency key to saving Medicare and lowering the debt | TheHill.