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Healthcare pricing mandates are no substitute for shopping around

1 7 0
07.01.2019

It's easy to pay without thinking twice. On trips to the supermarket, consumers can see the price of any product and decide whether or not to buy accordingly, forcing sellers to keep costs as low as possible. A consumer who wouldn’t think much of a $2 price tag for a dozen eggs wouldn’t buy the same product for $20.

But if that same customer had someone else’s credit card, and no credit limit, then what does it matter if eggs are $2 or $20 a dozen? Sadly, that’s how markets work right now in the medical sector, where the government and third-party insurers are the primary payers and individuals have no incentive to shop around.

In response to healthcare price absurdities such as $629 Band-Aids and simple scans at the emergency room costing patients thousands of dollars, policymakers are actively looking for ways to stop the bleeding … figuratively and literally. Unfortunately, the Department of Health and Human Services subscribes to magic-wand thinking: simply require price disclosures on the part of hospital services and pharmaceuticals and watch the prices suddenly drop.

But this is to miss the true driver of healthcare expenses: third-party payment. The only way to save consumers and taxpayers from runaway expenses is to make them shop around for the best options with at least some of their own money at stake.

On Jan. 1, HHS (via the Centers for Medicare and Medicaid Services) officially........

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