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May 6, 2020

A Healthy Dose of Price Transparency in US Health Care Services

Author Affiliations
  • 1Johns Hopkins Medicine, Department of Plastic and Reconstructive Surgery, Baltimore, Maryland
  • 2Office of the General Counsel, Department of Health and Human Services, Washington, DC
JAMA Surg. Published online May 6, 2020. doi:10.1001/jamasurg.2020.0754

Imagine a 52-year-old patient who experiences a ventral hernia. It is reducible but bothersome, and he is seeking elective repair. However, there are 6 surgeons affiliated with 2 in-network hospitals in his town. How does he decide who to see?

Patients use a variety of factors to select their surgeon, including board certification status, reputation, physician recommendation, health grading websites, and even social media. What is missing? Cost is. When considering the health of loved ones or themselves, many patients are quick to say that cost is no issue and the quality of care is all that matters. Comparing the cost of services from competing health care professionals is anathema to many, because US society, while focused on deals and discounts in most industries, is often loath to consider health care decision-making a form of shopping. However, as the price of the nation’s health care steadily marches upward each year, US residents need to adjust their perspective on the importance of facilitating price competition in health care. Without price transparency, hospitals and insurance companies face less pressure to compete on price and negotiate costs, and patients cannot make financially informed health care decisions. Like virtually any other market, health care can greatly benefit from the enhanced competition that greater price transparency can produce.

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