Where is price transparency in healthcare?: Mark Galvin (Opinion) | cleveland.com

In almost every industry in the United States, consumers are able to easily access price information to shop. The first requirement to bring buyers and sellers together in a market is to agree on what will be paid for goods or services.

For those of us who have studied even the most basic economic theory — or those who have casually observed dealings between the masses of buyers and sellers — we know that when the price of a product or service is lowered, normal consumer behavior increases the number of people who are willing to make that purchase. This is called “price elasticity.”

There is one glaring exception to this rule:the sale of goods and services in our nation’s healthcare system. Why do we accept the concept that it’s OK that we have no idea what the costs will be until afterwe have received the service? As a result, there is no price elasticity that would normally reward vendors who don’t overcharge and reward innovators that reduce costs while improving quality.

Many believe there’s no fix without healthcare price legislation, and recently we have seen some regulations passed and additional measures discussed by our political leaders. But Americans already get consumer-based pricing models in nearly every other industry, and shopping comes naturally to most of us.

So why would anyone wait for the passage of special price transparency regulations before requiring their medical suppliers to support a normal shopping experience? It’s the ongoing rhetoric between suppliers, legislators and payers — created by the combination of the quasi-regulated environment of healthcare with a third-party, indirect, payer system — that continues to interfere with normal market dynamics.

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Where is price transparency in healthcare?: Mark Galvin (Opinion) | cleveland.com.