Why Price Transparency?
Price transparency is essential to a functioning market. The U.S. healthcare system cannot operate as a healthy market without it. Price transparency ensures a basic economic principle is at work: Price discovery.
Price discovery means that we can learn the price we will pay before choosing to move forward with a transaction. Often confused with cost estimation, price discovery does not suggest that we know how much money we will spend in advance. Just as we order food in a restaurant without knowing what our check will be at the end of the meal, price discovery simply implies that we must be informed of the price of everything that we might purchase.
Healthcare accounts for approximately 18% of U.S. GDP, which is about double what other developed nations spend as a percentage of their GDP (OECD 2015). Without price transparency, the gap is likely to get larger.
Healthcare procedures are among the most expensive services a consumer buys. Costs often exceed the price of a car and can sometimes be costlier than a house. Annual spending on healthcare and health insurance premiums often exceeds today’s mortgage payments. Price transparency will enable consumers, ensure competition and fairness, foster trust, and ultimately lead to a lower overall cost of healthcare.
There is no standard pricing for healthcare; one patient can pay 10 times, or even 1200 times or more than what another pays for the same procedure in the same facility under the same circumstances. No other marketplace would allow this to happen. Price transparency will make sure it not longer can.
Founder and Chairman
Brian Mathwich, MD
Marty Makary, MD
Felix Weitzman, Ph.D.