Only Part of the Story

New Hampshire publishes on a State Web site the prices charged by hospitals in the State, and President Donald Trump is working up an Executive Order that would, with some differences in breadth (including information on the prices negotiated with insurers), make the practice a nationwide one.

Price transparency is a Critical Item in controlling—bringing down—the cost of health care, but it’s only part of the story.  A measure of cost transparency would be useful, too, not only for the consumer, but for governments as they look for (non-subsidy, non-tax) ways to further price competition.

Most costs are legitimately proprietary, especially in the competitive market environment that’s optimal for constraining prices.  One cost, though, would be useful: how much of the price charged through insurance to a consumer goes to covering the cost to the hospital of treating an uninsured consumer—both the voluntarily cash-paying consumer and the consumer who can’t otherwise afford the prices charged.  Within that cost, too, are useful data on how it is split between the hospital and the insurer(s) with which it has contracted.

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