My Big Idea For Healthcare: Pricing Transparency

Last December I wrote about what I thought would be the "Big Idea" for healthcare in 2013. "Show me the fees!" I said. Well, they have - in fact, much more than I would have ever imagined. 2013 has seen an explosion in pricing transparency in healthcare - or maybe better said, charging information in healthcare. More about that later, but for now, let's look take a look at what 2013 has held so far.

In March, Time Magazine printed Steven Brill's article "Bitter Pill: Why Medical Bills Are Killing Us" (paywall), a lengthy and much talked-about exposé on how hospital bills are calculated. The villain of the story is the "chargemaster", an ethereal list of prices that hospitals are wary of discussing. The prices in the chargemaster are very high, and few people are expected to pay them, but they are the basis for negotiations with insurance companies and other payers. Uninsured patients however, are left to pay full price - unless they ask for a discount. In effect then, the people with the least ability to pay are asked to pay the most for hospital services, and without health insurance, medical bankruptcy can be a side effect of catastrophic illness or injury.