Forbes 5/27/2012

In Arizona, a state senator named Nancy Barto (R.), who chairs the senate’s Health Care and Medical Liability Reform Committee, sponsored a bill, SB 1384, targeted directly at this problem. The bill would require health care facilities to “make available to the public on request in a single document the direct pay price for at least the fifty most used diagnosis-related group codes…and at least the fifty most used outpatient service codes…for the facility.” Doctors would be similarly required to publish the direct-pay prices for their 25 most common services.

The idea is that patients who have health savings accounts need to know what various doctors and hospitals charge for their services, so that they can shop for value when they need care….

Price transparency seems like the kind of thing that everyone should be able to rally around. But you’d be wrong. Pretty much everyone in the health-care world—other than the patient—has an interest in keeping prices opaque.

Most doctors and hospitals would rather not post their prices, because then patients would shop around, placing pressure on their incomes. Insurers don’t like price transparency, because they view the rates they negotiate with hospitals and doctors as proprietary trade secrets that give them an advantage over their competitors. Suppliers of medical products, of course, also benefit from high prices.

“At the final stakeholder meeting,” says Novack, “it was 50 representatives of the health-care industry against one person: me.” You can guess who won. “One physician that was there, representing the Mayo Clinic, claimed that disclosing prices would confuse patients since they might choose cost over quality,” says Novack. “This got a near-collective head nod from all.”