C2T2: Consumerism, competition, transparency, and trust can build back medicine better
The United States Senate recently held a hearing on how American patients can shop for medical services offered at lower cost and better quality.
I know. That sounds like a land where unicorns frolic among rainbows. But it’s not. It’s a simple vision of empowered consumerism and competition.
The power of choice and competition in health care will be unleashed for American patients when we have achieved transparency in pricing. When that happens, trust can begin to take root again in American medicine.
Mark Cuban was one of the witnesses at the Senate hearing.
He described his transparent business model serving the pharmaceutical needs of outpatients. (I plan to prepare another piece soon on this very subject.)
G. Keith Smith, an anesthesiologist and the founder of the Oklahoma Surgery Center (OSC), was another key witness at the hearing.
In his opening statement, Smith said that the OSC “recently performed a tonsillectomy on a child for $3,875 after the family had been quoted $72,000 by a Dallas-area hospital. [The OSC’s] prices are generally half of what Medicare pays hospitals, and less than Medicaid payments to hospitals for the same procedure.”
How does the OSC do it? With publicly posted, transparent prices and without conventional insurance. When employers steer their employees in the direction of the OSC, they save tens of thousands of dollars by flying their employees to Oklahoma and paying directly for the procedures performed there.
During questioning, Smith said that there are hundreds of similar facilities around the country. (In my next article, I plan to identify the barriers to building even more of these independent medical centers.) To learn about them and the facts about saving mind-boggling amounts of money, visit the Free Market Medical Society website.
Senator Roger Marshall (R-Kansas) spoke about a concept developed in his Patients Deserve Price Tags Act, bipartisan legislation he and Senator John Hickenlooper (D-Colorado) have introduced. The bill requires hospitals, surgery centers, imaging centers, and labs to report their negotiated rates and cash prices publicly. More than that, the bill would prohibit third-party insurers from concealing from insured employers the prices they are paying. Transparency for employers would be a huge boon to the 60% of Americans under 65 who have insurance provided through employers. The bill would also require that patients receive an itemized bill for services rendered.
Smith and Cuban both seemed excited to hear about the bill, with Smith saying that transparent pricing would induce more companies to insure themselves. Hospitals facing the requirement to compete would be forced to bring prices down.
Cuban observed that the legislation “would crush the big insurers, too.”
That’s a remarkable thing — Senators working together across the aisle to do something about the outrageous cost of American health care. Can a rainbow and unicorn be far behind?
Why isn’t this story being reported through the megaphones of news outlets everywhere? (Maybe we’ll write about that someday.)
The Marshall-Hickenlooper “Patients Deserve Price Tags Act” would enshrine in law an executive order from the first Trump administration on the public posting of prices.
The Biden administration, although excusing Medicare Advantage plans from the requirement, even increased the penalties for other entities that ignored the order.
It’s shocking, but only 21% of hospitals are fully compliant. The resistance is based squarely on the dread of competition and the public’s discovery of the horrifying way it has been ripped off through the years by the hyperinflation in the cost of health care in this country. It’s worse even than the increase in the cost of tuition for college (see the graphic below). It’s beyond appalling. According to Bureau of Labor statistics, the cost of the toys keeping us entertained has fallen over the years. The cost of meeting desperate human needs has gone up, up, and up.
President Donald Trump has announced on Truth Social that he is urging Republicans in the Senate to create law requiring that the “billions of dollars currently being sent to money-sucking insurance companies… to save the bad healthcare provided by Obamacare be sent directly to the people so they can purchase their own much better healthcare and have money left over.”
That idea, especially when tied to the transparency measures mentioned above, could empower a movement in consumerism and competition, in turn driving prices down. Of course, we must pay attention to the details, should this idea morph into a bill.
And what of trust?
Will you trust physicians, hospitals, and labs that have a history of concealing what they charge for services to comply in the absence of a law with teeth?
Will you trust politicians to enact and enforce laws requiring transparency, despite their history of directing your tax dollars into the coffers of big insurance companies that have a history of concealing rising prices?
Or will you pay attention, think, and push for more power to control your own health care destiny?
Consumerism, competition, transparency, and trust (C2T2) can build back medicine better. (C2T2…. It sounds almost like that helpful, but cheeky, little robot-droid in Star Wars.)
Marion Mass, M.D., is a practicing pediatrician in Bucks County and a leading member of the Free2Care movement.
