A true free market relies on open, fair competition. In order to achieve this, an informed consumer is required. They must be fully aware of the choices they have at their disposal and how much they cost, so they can properly weigh their options.
Continue Reading Below
At that point, the market gets to work determining what is the most efficient, cost-effective solution to any given problem. Once that happens, competitors adjust and companies begin to create better products for consumers. This is the beauty of the free market. There is always a desire to be better.
Unfortunately, in one of the most vital sectors of our economy, such transparency has been severely lacking. The health-care industry often leaves patients and caregivers guessing as to how much procedures will cost, putting Americans in the most vulnerable of situations in a tight bind.
If you drive down any highway in America, you will no doubt see dozens of brightly-colored gas station signs displaying their prices. When it comes to fueling up,consumers know what they’re getting for what price and how it differs from one place to another.
However, the same drugs might have drastically different costs from one pharmacy to another. Or, the same surgery might be far more expensive at one hospital than it is at another. For many patients, they can’t find out until after they are on the hook for these expensive remedies.
The Center for Medicare and Medicaid Services (CMS), a subsidiary of the Department of Health and Human Services (HHS) has, fortunately, offered a solution to this problem. CMS created the Procedure Price Lookup tool, which will allow Medicare recipients to compare prices of procedures and remedies at different facilities.
For example, if a Medicare recipient needs surgery and is given options as to where that surgery can take place, the recipient can then go online to the Procedure Price Lookup and type in the options to see cost ahead of time. No more guessing games.
This rule is a great first step in tackling the warped incentives in our current health-care system.
HHS and CMS are necessarily limited in what they can do in this space. As the Trump administration regularly and rightly points out, regulations promulgated by unelected bureaucrats harm the economy. Article I of the Constitution also delegates primary lawmaking authority to Congress. There is a boundary to what these agencies can accomplish.
For example, there is a reason HHS can only create such a price lookup tool for Medicare recipients. Any such law impacting the private market would have to come out of Congress. In this area, HHS is limited to public programs. In order to really increase price sensitivity in the market and decrease national health expenditures, we need to see such a change go beyond just Medicare. That is incumbent on Congress.
HHS and CMS should be commended for their work on fighting for transparency. This is an excellent first step towards cutting health-care costs for patients in a free market, pro-competitive manner. Hopefully, this action will not be the last in this effort.
Adam Brandon is president of FreedomWorks.