When Doctors Compete, Everyone Wins

Apr 30, 2013, 9:00 AM, Posted by

Touré McCluskey is the founder of OkCopay, a search engine for medical procedures whose mission is to provide consumers with objective information so they can make better choices about their health care. He is also a PopTech Social Innovation Fellow, a program that Pioneer co-sponsored. Touré’s opinions are not necessarily those of the Robert Wood Johnson Foundation.

When you want to buy something at the store, you check the price tag. Why can’t it be this easy to figure out the cost of medical care?

It should be.

Consider, for a moment, the story of Tracy, an uninsured waitress trying to find out how much a dental procedure would cost before making an appointment. Calling providers didn’t help her, because they themselves didn’t know the prices; dealing with multiple insurance companies often makes it difficult for providers to know how much a procedure will actually cost a patient. As a result, Tracy was left with a surprisingly high bill she did not expect—and could not afford.

Employers, consumer advocates, and health insurance companies all agree that we need more upfront price disclosures for medical care. Without this increased transparency, both the quality and the sustainability of our health system are at stake.

While it may seem self-evident, the reason why the United States spends more than other countries on medical care is because our prices are higher; our prices  also vary wildly. Numerous studies and articles—such as a recent University of California, San Francisco (UCSF) study— have explored this problem; the UCSF study found that routine appendectomies can cost as little as $1,529 or as much as $183,000! In addition, a recent study published in the Journal of the American Medical Association found it difficult to obtain price information for a common elective surgical procedure, total hip arthroplasty, and observed wide variation in the prices that were quoted. 

Patients today bear greater responsibility for a larger share of our health costs, from higher deductibles and co-pays to a growing list of non-covered services. As this trend continues, we will increasingly demand tools that can help us make sense of our options. And when we find out that an identical MRI center across the street is 80 percent cheaper, you can guess which provider we’ll choose.

This means that increasingly, doctors will need to “chase” cost-conscious customers. A $500 eye exam will get the same eyebrow-raising reaction as a $50 hamburger.

Through the efforts of organizations like Costs of Care, more doctors are recognizing that providing the best care for their patients includes knowing the costs and the economic burdens they face. Many doctors with whom I’ve spoken see transparency as a way to improve their performance and stand out.

Stabilizing health care prices is ground zero for a sustainable health system. For the last 50 years health care has been dominated by government-sponsored care, archaic reimbursement committees, and private insurance companies. They have been unsuccessful in keeping prices down. Now it’s the consumer’s turn. In the coming era of health care, information, choice, and competition will help guide decisions, improve outcomes and lower costs.

You can reach the author on Twitter at @OkCopay.

This commentary originally appeared on the RWJF Pioneering Ideas blog.