The cost of health care is different from its price

“Health care costs are sky-rocketing!”

“The percentage of the U.S. GDP devoted to heath care costs is the highest in the world.”

“The cost of Medicare is unsustainable.”

For most of us, the cost of health care (i.e., the dollars required by the system to produce and deliver care) isn’t what brings us the most anxiety.

It’s when we’re patients or helping a loved one find care that so many of us are deeply concerned about the price of our health care: what we – personally, individually pay to acquire the services, drugs and devices we need.

We hear news stories about people who delay needed care, split pills and skip treatments because they just can’t afford them.  We hear that more of us are going to a retail clinic in a Walmart to check out a bad cough because of convenience and lower prices. We watch family members and neighbors slip into bankruptcy because they can’t pay the medical bills from their car accident or their cancer treatment. We see jars of pennies at the corner 7-11 with a sick child’s face and a plea for help with unpaid hospital care.

These experiences hit home even among the well-insured as we watch our health insurance premiums make their annual leap along with our co-pays and as many of us find ourselves unceremoniously switched by our employers to high deductible insurance plans.  Or we find ourselves staring the price of care in the face when we are between jobs or our company quits offering insurance because it’s just too expensive.

There is no doubt that more of us are becoming price-sensitive about our health care. An interesting online survey from Altarum indicates that we have considerable interest in unit pricing and comparison shopping for health care services and products.

You would think that, in response to this surge in interest, hospitals, diagnostic lab companies and clinicians would make it easy for us to find out what we will have to pay for a given procedure or service.

But you would be wrong.  I think this is still true today, a year after a GAO report documented the sorry state of price transparency for the U.S. public. But I don’t know for sure.  And neither do you.

From my own experience and the reports I have read and heard, finding out the price of a colonoscopy or an annual check-up with my kid’s pediatrician or the insertion of a cardiac stent still ranges from moderately simple to simply impossible.

I think it would be great if we could get an assessment of the availability of price information in different markets for different health conditions and for different insurance constellations.  The review should be conducted annually and widely disseminated.  There are a lot of us who really need to know about the actual price of our health care.


Well, of course, we the public have the most to gain – and lose – from not having good price information, even in the absence of meaningful quality information. These days we are exhorted by the media and our employers to act like consumers and “shop” for our health care even when critical information is rarely available.

Knowing that we probably can’t find the information we need or that it is tough to ferret out will a) annoy us so sufficiently that we slam the phone down and take to the blogosphere with our frustration; b) resign ourselves to making potentially huge financial decisions in the dark; or c) spark us to take collective action.  Got a hunch about which you’ll do?

Employers should know about the state of prices too. If, indeed, they are committed to us workers being engaged in our health care, such engagement should extend beyond losing weight and not smoking and encompass making informed choices about the health care services and products we purchase.  Employers can exert pressure on institutions and corporations with a force that individuals (so far, at least) cannot.

Hospitals, clinics, practices, and diagnostic and treatment centers also need to know where they stack up.  If health care is to work efficiently, price transparency for the public is a necessary component of market competition, even when most of us have some kind of insurance coverage.

Whether we think of ourselves as consumers or not, or believe that health care will ever operate as a real marketplace or not – these lofty considerations are immaterial to our immediate need to find out the price of having the tumor removed from our leg, my pack-a-day smoking brother to get a CT scan of his lungs or the antibiotics our friend’s sick baby needs to sleep through the night.

Being able to find out the price of health care services has to move from a rhetorical nicety to a realistic expectation. It’s not likely that any nascent regulation, policy or organizational change in health care will blow away the fog that obscures this information from the public.

But repeated systematic assessment that illuminates the size and scope of the challenge individuals face in finding out this basic information would remove important barriers to our effective engagement in our health care.

Jessie Gruman is the founder and president of the Washington, DC based Center for Advancing Health. She is the author of Aftershock: What to Do When You or Someone you Love is Diagnosed with a Devastating Diagnosis. She blogs regularly on the Prepared Patient Forum.

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  • Mishal Malik

    Your post is nice. keep posting

  • ottomedic51

    I agree….my husband left a job with a big company, where we paid only $50 or so a month for all insurance including dental and life, to go back to a company he had worked for 5 yrs previously and now we pay $1000 a month for all our insurances but the health part comes with a much higher deductible, copay, meds copay, preauthoration for certain pain meds. People LOVE to blame Obomacare BUT then again, they blame him for everything anyway!! It’s the INSURANCE COMPANIES doing this, NOT the Pres. Romney did the same thing that the Pres is trying to do, while he was govenor and I don’t hear crap about that!!! Insurance companies are wanting to get as much money while they can before they get restrictions slapped on their butts. STOP giving CEOs huge bonuses and START giving to your insureds!!!!!

  • Mark ferris

    Problem is, if as a doctor, you accept Medicare, you must follow their labyrinthine rules to determine the “price”, little of which can be determined in advance. Don’t have Medicare you say? Doesn’t matter. It is against the law for us to charge you a different rate than we charge Medicare. Add to that, facility fees are many times greater than the doctor fee, information the doctors office can only estimate for you.

  • petromccrum

    All of these issues are part of the problem. We need tort reform, we need insurance billing reform, we need less paperwork. Medical treatment decisions should not have to be made with the first priority being whether or not the doctor/hospital could be sued. It should not take hours and hours or research to determine which health care plan is the best for you and your family. Both providers and insurance companies should not have to spend money/waste resources on government regulations that accomplish nothing.Until all of these issues are addressed and the entire system overhauled we; patients, families, providers, and insurance companies are going to see a rise in costs and a decline in care.

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