In today’s paper, Dr. James Tryon questions our own Dr. Deane Waldman for his critique of the Think New Mexico proposal to mandate one form of health care prices transparency.
The thing Tryon doesn’t get and the reason we have serious concerns about Think New Mexico’s proposal is that meaningful prices don’t result from government mandates. They come from market processes. The importance of prices as a too for transmitting information was an important contribution of Nobel Prize-Winning economist FA Hayek.
Health care prices aren’t so mysterious by accident. We don’t need a government agency to mandate that restaurants, retail outlets, gas stations, or even car dealers publish their prices because ultimately those prices are driving by market forces. If government or insurance companies are paying for patient care, those patients aren’t going to care how much it costs. The only way to change this incentive is to restore the doctor/patient relationship which includes getting government bureaucrats and insurance companies out of the middle of our health care system.
As seen in the chart below, only about 12% of US health care spending paid out-of-pocket by consumers, it is no surprise that prices paid by consumers are not particularly relevant. There is a way to solve it, but it involves eliminating the tax advantage employers have over individuals in purchasing health care, repealing much of ObamaCare, and dramatically-reforming Medicare and Medicaid.
One Reply to “RGF actually supports REAL transparency in medical prices”
You are spot on with this insightful commentary Paul. Unfortunately such simple solutions are not easy, especially when politics, special interests, and big money are at stake.