Affordable Quality Healthcare

Trump administration does it for the children

Don’t we want a properly functioning healthcare system? Hasn’t the time come to make it happen? The Trump administration is moving this month to make healthcare providers disclose their prices. That includes the prices they charge insurers. The new initiative complements several related steps the administration has taken. Efforts to make healthcare costs more transparent are a good start. Transparency is complementary to, but not a substitute for competition. Both are needed.

The Centers for Medicare and Medicaid Services recently launched a website, “Procedure Price Lookup,” enabling Medicare patients to compare total and out of pocket costs for procedures commonly performed at hospital outpatient facilities and ambulatory surgical centers. The agency hopes that by providing information about the costs of various medical procedures, patients will be able to shop more prudently. The goal is discouraging facilities from overcharging.

The administration is hoping to use price transparency to reduce medical costs in other areas too. The American Patients First proposal requires drug providers selling products costing patients more than $35 a month to reveal their prices in television advertisements. If it survives a challenge on First Amendment grounds the rule is likely to be adopted. Many pharmaceutical companies already are preparing for this. Another pending rule calls for hospitals to display their prices online.

We cannot afford $10,000 per person per year for healthcare

These efforts address a critically important issue. Healthcare costs account for nearly 18% of U.S. Gross Domestic Product, or about $10,000 per person annually. Something needs to change and transparency in pricing alone will probably not be enough. Patients are already aware that healthcare is expensive. A Consumer Reports survey found that 1 in 7 prescriptions go unfilled as patients can’t afford the cost. A similar survey found nearly 44% of respondents avoid medical attention when sick or injured for the same reason. Policies to increase transparency are a first step but the regulatory state needs to allow the industry to introduce competition.

The U.S. healthcare system needs increased competition more than transparency. The healthcare sector’s is subject to an overly burdensome regulatory system. This often limits competition through “Certificate of Need” laws and other restrictions on innovation and patient choice. These curbs are not universal. But they are a large and generally present regulatory obstacle.

Alternatives that have a record of results

Alternatives such as GenScripts Pharmacy in Oklahoma exist. GenScripts does not accept health insurance when filling prescriptions. This avoids the complications, overhead, and financial disincentives of the third-party reimbursement system. As a result, GenScripts can offer hundreds of drugs at lower prices than the out of pocket costs patients pay through their insurance.

Surgical procedures offered outside the highly regulated and bureaucratic third-party reimbursement system have shown similar results. Nearly 18 years ago, physicians Keith Smith and Steven Lantier opened the Oklahoma Surgical Center (OSC). The center competes with other surgical facilities by displaying, and guaranteeing, the prices of available procedures and bypassing insurance companies. The OSC offers numerous procedures, from a C-section to a rotator cuff repair, for a fraction of what the same procedure might cost elsewhere. This practice triggered a price war that was good for consumers.


It’s no coincidence both GenScripts and the OSC are in Oklahoma. Oklahoma allows physicians greater freedom to practice medicine and consumers more access to pharmaceuticals than many other states. The result of Oklahoma’s less restrictive regulatory climate is lower prices, more choice and more options for quality care. Isn’t that what consumers should expect, but so rarely receive? Why can’t New Hampshire’s legislature move to improve service and lower cost by getting the regulatory monkey off the industry’s back?

The Lighthouse, Independent Institute By: Raymond March, April 3, 2019

Healthcare Needs Price Competition, Not Just Transparency