What’s the damage?

Transparency can work in health care, too

UPTON SINCLAIR once said it is difficult to get a man to understand something when his salary depends on his not understanding it. Which may be why so many officials and apparatchiks in the healthcare industry—and what an industry it is!—are crying bloody murder over new transparency rules. Or at least bloody misdemeanor.

Late last week, the Trump administration issued rules that would compel hospitals to disclose the rates they negotiate with insurers for things like drugs, supplies, fees, doctor availability and, for example, hip replacements or back surgery. After all, you don’t go to the grocery store and fill up a cart without knowing the prices first. You don’t buy a car or house without a price tag. Why buy a service from a hospital without knowing the cost?

(Hospitals are already required to publish prices. But the new rules would require them to post prices they charge to your insurance company, prices for out-of-network care and, oh my, even for cash patients. Are they still around?)

Of course, this being America, the whole idea is all but certain to go to court first. Hospitals and others in the industry have already vowed to sue. So no need to brush up on the costs of an appendectomy just yet.

Of course, the president being the president, he gave a press conference in which he claimed the rules are already in effect. They are not. “We finally have transparency,” he fairly shouted. No, we don’t, Mr. President.

Of course, health providers being health providers, they are coming up with all sorts of excuses about why this won’t work. It’s difficult for them to understand when their salary depends on their not understanding.

This might take a while, so hold fast, America. But transparency should be worth it. As for the statements by hospital groups in the various press reports that transparency would make health care more expensive, don’t believe it. As one administration official put it, show us another place in the American economy where price comparisons make something more expensive.

Several years ago, reporters at this very newspaper published findings on the disparities between hospitals and fees in this state. The stories, written in 2013 by Lisa Hammersly and John Magsam, showed that a joint replacement could cost between $18,000 and $75,000, depending on the hospital. Such variations were found across the land, from sea to sea. And officials shrugged. After all, this is the American health-care system, which isn’t systematic at all. Get used to it.

What this country needs is a healthcare market, instead of a slipshod order, or at least an arrangement, in which people don’t pay for health care directly. Instead, they pay third parties, such as hospitals or insurance companies, or even the government through taxes. And few people know what they’re getting for their money. And may not know until the bill comes due. Or, in many instances, may not even care even after the bill comes due.

And now, well, let the Associated Press describe it: “Under one rule resisted for months by a broad swath of the health-care industry, hospitals must for the first time reveal in a consumer-friendly format the discounted rates they negotiate privately with insurers for a list of 300 services patients can schedule in advance, including X-rays and cesarean deliveries . . .”

A consumer-friendly format. Which might mean a website that can explain—to laymen—what Hospital A will charge as compared to Hospital B. And prices can be compared, just as you might compare prices at Auto Dealership A and Auto Dealership B, or maybe Kroger and Whole Foods.

But what if one hospital has more overhead and capital costs? And what if another has more expensive, perhaps even better, doctors? And what if one specializes? And is more efficient with better front offices?

The answer in the form of another question: Then how would that be different from any other business?

It’s been said before, even here: A marketplace takes into account many, maybe millions, of decisions that We the People make for ourselves, or for our families, every day. And we know our needs best. Certainly a free market is a better way to do (most) things than by having one of our betters determine the cost of something—or everything.

Or worse, having important businesses hide costs by confusing everything with a menu that only a CPA could understand.

Imagine the uproar if car dealerships tried to pull this off. Imagine some charging for floor mats, some not. Some charging sales commissions, some not. Some charging you more if you work at a certain company, some less. And you found out the true cost of your new car only when you got the first payment booklet a month later. Americans would be marching in the streets.

The American people have been complaining about health-care costs for years, but are wary of getting the government even more involved than it is. One solution: the free market. So let’s give it a try. Or, in the alternative, let’s give it a helping hand.