Why we are Pawns in the Hands of the Health Care Industry

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msrp

Imagine shopping for a car and while you are at the car dealership, kicking the tires, test driving the car you like, you have no idea what the value of the car is. In fact, there is no official pricing information about the car on the window. Sounds like a far-stretched idea, but in the early 1950s, such a pricing sticker didn’t exist. It wasn’t until US Senator Mike Monroney shepherded a bill through Congress requiring that official pricing information be glued to the window of every new automobile sold in the US. It was a very effective means of disclosing the manufacturer’s suggested retail price, and a way to show other important information to the consumer such as facts about the fuel economy, its environmental rating, and more.

The sticker price has made buying a car easier, rational, and understandable. Knowing the base price of something allows us what to expect, and if the price is higher than normal, then we will expect more value. Gone are the days of irrational and inexplicable pricing – at least for the car industry.

Price appendectomy

Today, there is another industry in desperately need of a ‘sticker price’. It is the Health Care industry. Playing a game of blind man’s bluff, the Health Care industry routinely charges outrageous amounts of money for services that are actually inexpensive. For example, in a recent study of the costs of routine appendectomies performed throughout California, though the procedures were largely identical, the charges varied anywhere from $1,529 to $182,955. Why was there such a huge difference? Good question, but efforts to discover the answer have turned out to be futile. Costs are like trade secrets. We need more than an MSRP sticker, we need a medical Freedom of Information Act wouldn’t you agree?

bandaid

The Health Care industry is about patients, but the patient population has been largely powerless. Over time, the patient has been reduced to merely another raw material while members of the medical community – hospital chains, nationwide insurers, and large employers have become much more powerful. This should not be the case. In time, patients will likely demand to know more what their dollars are being spent on. That is how American consumerism has always operated, but what we need is transparency in treatment, cost, and institutions – in other words, a digital price sticker.

Original story “Sticker Shock” by Andy Grove, featured in Wired, November 2012.

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