COMMENTARY | The U.S. Department of Health and Human Services is releasing the “chargemaster” price list of the 100 most common inpatient procedures for all U.S. hospitals, inspired by Time’s March 4 expose on hidden medical billing. Additionally, the HHS Department will also be providing $87 million to the states to create “health-care-data-pricing centers” to help consumers determine hospital health care costs, reports Time. Despite potential grumblings from small-government conservatives, this is excellent news that will benefit consumers, the government, and health care providers.
First of all, everyone wins when health care providers are forced to innovate. By no longer allowing hospitals to pull a bait-and-switch or rely on the desperation of the ill and injured to make big profits, these institutions will be forced to get creative and competitive. If you start to lose patients because a hospital fifteen minutes away has better prices you need to step up your game.
The necessary cost-trimming that occurs may cause grimaces at first, but lower prices will likely draw in more patients, including those who have previously avoided medical care due to cost. I have written before about how many citizens avoid getting medical treatments due to cost, revealing an untapped market. By lowering costs out of competitive necessity, hospitals may actually increase overall revenue by doing more business. In Economics, lowering price levels increases Aggregate Demand.
Society wins when more Americans can afford to seek medical care. Citizens who avoid health care costs in the short run are at increased risk of needing more expensive emergency care later, costing taxpayers a pretty penny. Hospitals lowering the prices of inpatient procedures in the short run could cause a decrease of hefty unpaid bills in the long run, as patients are more likely to pay $1,000 for a reduced-cost procedure today than $10,000 for emergency surgery five years from now, after the minor problem has become a major problem. Therefore, even if short run profits decrease from revenue cuts, long run debts from unpaid bills may decrease even more, bringing about a net benefit.
Getting Americans reinvested in seeking regular medical care is helpful for everyone, from medical professionals to taxpayers to patients themselves. How sad that it took some hard-hitting journalism to generate the necessary jolt to get policymakers taking action. Kudos to you, Time!