Transparency – including price, quality, and effectiveness of medical services is a vital component to lowering costs and improving outcomes. However, it is imperative transparency go hand-in-hand with financial incentives for patients and consumers; otherwise the quest will be in vain. The single best way of reducing costs while not worsening health outcomes is to redistribute resources from less cost-effective health services to more cost-effective ones. Americans are extremely uncomfortable with the idea of making decisions based on cost but we must become fluent in the language of cost and more comfortable making decisions based on price information for healthcare expenditures to stabilize.
Legislators in more than 30 states have proposed legislation to promote price transparency, with most efforts focused around publishing average or median prices for hospital services. Some states already have price transparency policies in place. California requires hospitals to give patients cost estimates for the 25 most common outpatient procedures. Texas requires providers to disclose price information to patients upon request. Ohio passed price transparency legislation last year; however a lawsuit filed by the Ohio Hospital Association has delayed implementation. The cost of a knee replacement is $15,500 at the Surgery Center of Oklahoma, whereas the national average is $49,500.