A Better Way Forward: Enable Transparency in Prices and Outcomes


 Our health-care system makes it extremely difficult for consumers to make informed decisions about how to spend their health-care dollar, and therefore makes genuine competition—which is essential for keeping quality high and prices low—nearly impossible.

The nature of our insurance system, in which third-parties (like employers or the government) make most insurance decisions and insurance generally covers nearly all health-care costs, means that consumers know very little about what their care costs, or which providers achieve the best results. Very few hospitals report price information for particular procedures, and doctors generally do not make their per-service prices available to their patients. Quality information for institutional providers, particularly hospitals, is slowly becoming available, but most Americans still do not know how to access it, and information about the quality and outcomes of particular physicians and practices is very rare.

Our health-care system should not keep prices and outcomes secret from the people who ultimately pay the bills and receive the care. A better system would allow Americans to know what their health care costs and how well or poorly their hospitals and doctors perform, enabling them to function as informed consumers and so to drive better quality and lower prices.

Key reforms for achieving that goal include:

• Providing an incentive for medical providers that work with the federal government to make price and quality information (including per-service prices for simple services, all inclusive prices for more complex procedures, and comprehensive quality and outcome information) readily available to consumers.

Reforms like these would begin to enable genuine consumer decision-making in health care. The lack of information about prices and outcomes has made it virtually impossible to be an informed consumer of coverage and care, which has contributed greatly to the inefficiency and excess costs of our system.

Only real consumer pressure, not fiats from Washington, can restrain costs and improve quality in American health care.