Supply of Medical Services

End the Gag Rule

As Time Magazine reports, health care prices are fucked up.  Castlight is one company that is trying to shed some light on health care prices to improve transparency.  Their CEO, Giovanni Colella, write the following in Forbes:

To start, health insurance companies should refuse to agree to “gag clauses” with hospitals who do not want their prices made public. Insurers, along with the thousands of businesses who self-insure, should demand that providers in their networks provide an estimate of costs for non-emergency procedures and of total costs of treatment. If you would demand a good faith estimate from a contractor to fix a leaky roof, it only makes sense to demand the same from a doctor to fix a creaky knee.

Corporate America also should demand that health insurance companies – and Medicare, for that matter – release volume and outcome data so both patients and companies can connect price to quality and determine if higher prices are actually worth it. With this data in hand, a patient can avoid the higher-cost, lower-quality doctor, and employers can go further and either push prices down or push these providers out of their network.

This is how markets are supposed to work. Price and quality data are transparent so that everyone can make informed choices – and it doesn’t take an investigative reporter working six months just to decipher a hospital bill.


Leave a Reply

Your email address will not be published. Required fields are marked *