Current Events Medicaid/Medicare Public Policy Supply of Medical Services

‘Price Check, Neurology Wing’

“People generally don’t have a clue about what the health care they are consuming costs,” Michael O. Leavitt, the Secretary of Health and Human Services told reporters in a WebMD article (“Gov’t releases hospital prices“).  With a new initiative in hand, Mr. Leavitt hopes that consumer ignorance will soon dissipate.

Yesterday, officials at the Centers for Medicare and Medicaid Services (CMS) opened a new website (Health Care Consumer Initiatives) which lists prices hospitals typically charge for 30 popular medical services.  It also lists the prices Medicare pays for each service.  WebMd claims that the impetus for this change came directly from the executive office:

The release is part of a broader administration strategy for slowing rising health care costs. President Bush favors broader use of personal health savings accounts as a way to spur consumers to spend more of their own money on health expenses. He has pushed greater price and quality transparency as a way to foster competition among health providers for consumers’ dollars.

Those who have read this blog before know that the Healthcare Economist is always in favor of more information being released to the public.  Although I doubt providing the initiative will drive major changes in the medical services industry, it may force hospitals to reconsider their pricing policies and give consumers more bargaining power with their providers.