Healthcare is one of the only markets where consumers buy services without seeing the price ahead of time. Patients are routinely expected to agree to tests, scans, and procedures with no idea of the price—only to find out weeks later, if they ever do, that the same service could have been provided for thousands of dollars cheaper down the street. This is a failure of basic market information. When prices are hidden from patients, competition breaks down, and providers face little pressure to keep costs low. Restoring price transparency is the first step to making the healthcare market that work for patients again.
Patients are shielded from prices through copays and deductibles. Transparency only works if patients have both price visibility and financial incentives to act on it. Paired with high-deductible plans and health savings accounts (HSAs), patients would have both the information and the incentive avoid over-paying. These plans cost less in premiums while allowing patients to save pre-tax income, including the savings on the insurance premiums, to cover their medical expenses. By giving patients upfront prices and control over their own medical finances patients are incentivized to find low-cost and high-quality care, reintroducing competition into the healthcare market.
Justin Leventhal is a Senior Policy Analyst for the American Consumer Institute, a nonprofit education and research organization that advocates for consumers through evidence-based analysis and data. Follow Justin on X @JustinLeventhal.