Price transparency could help Americans reduce health care costs

Medical costs can be devastating, but telling families the cost could make a difference.

Approximately 100 million Americans have medical debt. But the financial pain inflicted by the U.S. health care system is especially significant for families like mine with serious health conditions. My daughter, Meg, has a rare genetic disorder, and my son, Simon, had cancer.

Even with health insurance, the costs are devastating. Like a growing number of Americans, our family is on a high-deductible health plan. We owe the first $10,000 of annual health care costs out of pocket before insurance covers additional charges. The share of high-deductible plans has nearly doubled over the past decade as insurers look to shift more costs to patients.

Then there’s our monthly health insurance premiums, which cost nearly $1,000 per month. And that’s just our portion of the premium. My husband’s employer also pays its share from a pool of funds that otherwise could go to increasing wages. The Kaiser Family Foundation estimates that the average annual employer-sponsored family health care premium is $22,463 — nearly one-third of the nation’s median household income.

One uncontroversial policy reform that can help families like ours — and all American struggling with high healthcare costs — is price transparency.

Unlike any other sector of the economy I know of, healthcare doesn’t inform consumers of prices until after services have been rendered. That gives hospitals and health insurers the power to charge essentially whatever they want. It’s no wonder prices are so high.

With hidden prices, patients can’t shop for less expensive care or avoid overcharging. Most American consumers know to avoid getting their car serviced at vehicle manufacturers because prices are much higher than local auto shops. But we have no price protection to avoid certain major hospitals or health insurers. The power imbalance between health care interests and consumers has caused national inflation-adjusted health care expenditures to more than double this century.

If our family could have the price information to choose less expensive treatments for our children, we could extend the pre-deductible period of our health plan and smooth our budget. Under the current model, where we have no price protections, our out-of-pocket costs are stacked at the beginning of the year, leaving us no choice but to put the bills on our credit card and go further into debt.

For example, we were charged $218,590 for a three-week hospital stay for my son. If we had known this astronomical price before care, we would have demanded to be discharged early and conducted any additionally needed tests and treatments in a far less expensive outpatient setting. Yet, under the opaque status quo, it’s nearly impossible to get upfront price information. (Analyzing our bills after care to try to determine less expensive providers is also difficult because the statements are rarely itemized by treatment.)

Even after we reach our annual deductible, we still feel a social responsibility to avoid health care price gouging because insurers pass along post-deductible charges in the form of higher premiums on everyone.

We estimate we’ve spent $4 million on health care for our kids. If we could identify cheaper care, we would. Actual prices are needed to bring market pressures to the health care system that can keep costs in check — just as they do for car servicing or any other economic transaction in today’s economy.

Two federal rules already require hospitals and health insurers to post their actual, upfront prices. Yet compliance has been spotty. A recent report by PatientRightsAdvocate.org finds that only 25% of hospitals are fully complying with the rule. Health insurers have also made their prices very difficult to access.

Robust enforcement of these price transparency rules can allow tech innovators to collect prices in easy-to-use web shopping applications like AirBNB. Ordinary Americans want such bipartisan solutions from their policymakers rather than partisan bickering.

Actual health care prices can give ordinary Americans the information they need to substantially lower their medical costs and avoid debt through choice and competition. This basic economic right can especially help high health care using families like mine who need it most.

Trisha Fullmer, Tooele, supports the Millies Princess Foundation that raises money to fight childhood cancer.