Week 11 One Question Response - Healthcare

This response is answering the prompt "Few people, if any, would agree to purchase a smart phone without first knowing the price; however, in the United States very few health care providers provide up-front pricing for their services. How could this problem be fixed and how would price transparency improve our health care system and how would consumers of health care services benefit."

I, just recently, went through a scenario where the accurate display of the price would've affected my decision. I was presented with a procedure that was estimated by my doctor's to be around $500. I weighed the options and the various outcomes and decided that I was going to go through with it. I get the procedure done and two months later I open a bill from my insurance for $1300. That was nothing like $500 and I was terrified. As a new college student I don't have enough money to just drop $1300. This procedure that I had decided was reasonable and something I felt was worth doing now turned into a procedure that took a quarter of my savings. Had the prices been accurately presented to me, my decision absolutely would've been different.

This problem could absolutely be fixed by cutting out third party insurance and turning the healthcare industry into a customer to business interaction. What I mean by this is to open the healthcare system to the public in a way that the consumers will directly pay the business for the service. This would immediately create competition among various healthcare services. This competition would push each individual company to lower their prices and produce better quality. How the patients are treated and the quality of the care will be a crucial part of whether or not customers return and will be reflected in the ratings they receive.

Everyone's immediate concern to this proposal would be the effect on people with government funded healthcare. As stated in the lecture, there are different avenues to solving this issue. One specifically, that grants $2000 per person to cover medical bills and procedures, is especially enticing to me because it also creates a desire for the consumer to shop for good prices. In this deal, any money not spent on medical bills would be cash in hand for the consumer to keep. Just like anyone, most people would try to save as much of this money as possible and would therefore cause the consumers to encourage competition by looking for better prices. One example specifically would be whether you would choose to go to the ER or to an urgent care with cold symptoms. If it were saving them money, they would go to Urgent Care.

This strategy for our healthcare system is one that I think should be largely explored. I would love to hear some of the criticisms of this plan to better understand why it hasn't been considered more seriously.