Edmund O. Schweitzer III: Sunshine needed on medical pricing

The White House just announced a sweeping plan to shine daylight into the pricing of health care. I believe sunshine will save patients, employers and taxpayers billions of dollars.

We know the price of the things we buy – from a loaf of bread to a laptop, a cellphone or a home, plane tickets, our cars, and a gallon of gas.

However, health care costs remain mysterious. I remember asking a surgeon how much it was going to cost to fix my hand. He answered, “I don’t know, but I know I’ll get $500.” And I never really found out.

We know what our copays are, but we seldom see the real big bucks behind it all.

I believe that America thrives when markets are fair, free, flat and open – it is one of the pillars of our democracy. As Nobel Prize-winning economist Milton Friedman said, economic freedom and political freedom are inseparable.

Yet, every time we visit the doctor – whether for a checkup, an emergency room visit or a lab test – we have no idea what the actual price will be. Prices are negotiated secretly among hospitals, labs, middlemen, other providers and insurance companies. You can ask, but you won’t get the straight scoop.

Under the newly announced plan, the Department of Health and Human Services and the Centers for Medicare and Medicaid Services would sweep away that secrecy. For the first time in generations, patients will be able to see the real prices for medical care – before choosing and spending.

It’s outrageous that one health care provider might charge $500 while neighboring providers charge $1,500 or even $2,500 for the same service. In fact, a recent study of health care transparency conducted by the RAND Corp. found private insurance plans pay hospitals, on average, 241 percent more than what Medicare pays for the same service. It is no wonder the trade association representing hospitals is strongly opposed to this rule! It appears they have been profiting from basic health care services at the expense of their patients for decades. Other studies show these high prices do not correlate with the quality of service.

We want to know how much things cost. Patients often have time to shop around for blood tests, X-rays, ultrasounds, and even surgeries and chemotherapy. Today they can look at reports and websites to determine the quality of care and the rate of successful outcomes. But they cannot see the price.

Health care is now about one-fifth of the U.S. economy. Just think about how individuals and businesses will flourish when opaque pricing is replaced with economic freedom!

Imagine if we were to save 20 percent of the one-fifth … that would be 4 percent of our economy going back into your pocket, to be spent or invested how you see fit.

This translates directly into lower deductibles, lower premiums, and with health care providers truly competing to serve.

People dependent on government-funded care benefit too, as the same tax dollars cover more services.

Free enterprise with fair, free, flat, open markets has propelled the United States to become the greatest economic miracle in human history.

It is high time for hospitals and other providers to welcome the sunshine into the pricing of services. We the People, and they, will benefit.

Dr. Edmund O. Schweitzer III is president, chairman of the board and CTO of Schweitzer Engineering Laboratories.