Trump Executive Order to Mandate Price Transparency for Providers

As the N.Y. Times reports, more transparency is coming to provider prices. The White House released an executive order Monday afternoon intended to require insurance companies, doctors and hospitals to give patients more information about precisely what their care will cost before they get it. More transparency is generally good and surprise billing for out-of-network costs has been a major…

Competition matters

While the high price of branded drugs often gets a lot of attention in the public, few realize that after patent expiration, prices often plunge dramatically and high quality treatments are available for extremely affordable prices.  Granlund and Bergman (2018) estimate the size of this price reduction using data from Sweden. In the long term,…

Do hospital purchases of physician practices increase or decrease prices?

The effect of health care industry consolidation on prices is a question argued about by many including researchers, economists, anti-trust, lawyers, regulators and more.  There is evidence that health plan consolidation increases premiums, and hospital consolidation increases price. For instance, Dafny et al. 2015 writes: The harsh reality is that it’s difficult to find well-documented…

Why are hospital prices crazy?

Sarah Kliff of Vox has an interesting article looking at hospital pricing.  She provides examples of $629 for a Band-Aid in an emergency department to over $3,000 to look at a bruised finger. Part of these high costs are not just physician time and treatment materials but a facility fee.  The facility fee is basically the…

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…

The Effect of Hospital Consolidation on Prices and Quality

An interesting report from the Robert Wood Johnson Foundation summarizes the literature describing the effect of hospital concentration in a market on prices and quality.  The general consensus from the literature is the following: Increases in hospital market concentration lead to increases in the price of hospital care Hospital mergers in concentrated markets generally lead…