NCPA - National Center for Policy Analysis

The United States Could Learn from Britain's Cash Market for Medical Care

March 6, 2015

Britain has long had an active cash market for medical care provided by private hospitals, which helps people get around the long waits in the National Health Service, and also serves people from abroad.

Nuffield Hospitals advertises firm, fixed, all-inclusive prices good for 60 days after an initial consultation. For more complex procedures, one pays for the initial consultation and the hospital develops the price from that. The Nuffield price generally includes post-operative care, rehab, and required readmissions.

Like Walmart, Nuffield will match competitor prices under reasonable conditions — "If you find an alternative private hospital in your local area offering a better price for the same surgical intervention, sold with the same service conditions, we'll lower our price to equal it." The conditions require the other private hospital be within 15 miles of the Nuffield hospital, exclude NHS private patient prices and require a written quote.

The international healthcare group, Bupa, offers private insurance, elder care, and private hospitalization. Beneficiaries of its Health Cash Plan pay providers, send Bupa the bill and receive the Bupa contract amount in cash. Bupa advertises no pre-authorizations to see specialists and 24/7 phone consultation with nurses and GPs.

In the US, Obamacare, Medicare and Medicaid set arbitrary prices. Medicare outlaws price negotiation, short-circuiting the pricing mechanism that transmits vital information about what customers want and what suppliers can provide. Without that information, even the most well intentioned regulators will fail in their quest for price transparency and efficient service bundles.

Source: Linda Gorman, "Guess Where Fair and Transparent Hospital Prices Exist?" National Center for Policy Analysis, March 2, 2015. 


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