Aside from my forays into politics, I've spent the past two decades as a pediatric neurosurgeon in Portland, Oregon. My patients' families often ask me how much their procedures -- from the serious to routine -- cost. Even I have no idea. That's why healthcare price transparency, which President Trump highlighted during his acceptance speech at the Republican National Convention, is such a vital reform.
The Covid-19 pandemic has illuminated this problem of healthcare price opacity once again. When Americans don't know how much Covid testing and treatment will cost, they are less likely to seek care for fear of unmanageable medical bills.
According to a Gallup poll, one in six respondents will avoid Covid medical care, even if symptomatic, due to cost concerns. Given how early diagnosis is vital to reducing the spread and severity of this disease, skipping testing and treatment is unacceptable (though understandable).
Nationwide, about one-half of Americans avoid care for fear of crippling cost, according to a recent McLaughlin Group survey. Unknown healthcare prices have become both a financial and a public health threat.
Price transparency is the solution. Last November, the Trump administration issued new rules to provide all healthcare consumers with price certainty by requiring hospitals and health insurers to disclose their discounted cash prices and secret negotiated rates. And earlier this summer, U.S. Sen. Mike Braun (R-IN) introduced the Healthcare PRICE Transparency Act, co-sponsored by a group of Senators, including Senate Finance Chair Chuck Grassley (R-IN), that would codify these rules legislatively and restore trust in the U.S. healthcare system.
Sen. Jeff Merkley (D-OR), who defeated me in Oregon's U.S. Senate race in 2014, and his colleagues should include this bill's provisions in the Covid-19 stimulus legislation that Congress is currently debating. Healthcare price transparency is supported by an overwhelming bipartisan majority of about90 percentof Americans. Nearly three-quarters say they'd be more likely to vote for candidates who back this measure.
The confusion over healthcare prices is one of the biggest contributors to rising healthcare costs, which have grown by more than 250 percent since the year 2000, adjusted for inflation, and cost the country about $4 trillion annually.
When healthcare consumers don't know real prices before care, they are vulnerable to the types of price gouging and overbilling that I've witnessed first-hand as a physician.
Price transparency is necessary to reduce healthcare costs that disproportionately burden the working poor. When prices are widely available, patients can shop for less expensive care and coverage. And employers, who provide healthcare coverage for more than half of Americans, can identify higher-value healthcare options for their businesses and employees.
Clear prices expose providers and insurers that charge inflated rates, allowing healthcare consumers to steer clear. After California's largest pension fund provided enrollees with real pricing information for orthopedic procedures, prices at expensive surgical centers in the state fell by nearly 20 percent.
With nationwide price transparency, such a competitive healthcare market will emerge across the country, controlling costs like functioning markets do in every other economic sector, from tech to groceries.
Economic and empirical evidence suggest that healthcare price transparency can reduce healthcare costs by 30 to 50 percent. A study published last year by economists Art Laffer and Larry Van Horn finds that cash prices for care are, on average, nearly 40 percent less expensive than the rates that insurers pay. Significant anecdotal evidence backs up this cash advantage, with patients across the country reporting paying far less for their procedures with cash than filing insurance claims.
Lower healthcare costs will boost the economy at a time when it's needed most. With less money devoured by the healthcare tapeworm, patients will have more funds to spend locally. Employers will have higher net earnings to raise wages, rehire the American workforce, and restart the American economy. And state and local governments can devote more of their budgets to productive services. With cost certainty, Covid patients can get tested and treated immediately without fears of four-figure bills showing up in the mail weeks and months later.
Due to these economic benefits, healthcare price transparency is a natural fit for Congress' forthcoming stimulus package. This reform can finally fix American healthcare and turbocharge the economic recovery to the point where the nation will emerge stronger than before.
Monica Wehby, M.D. is a pediatric neurosurgeon in Portland and was the Republican nominee for the U.S. Senate in 2014.