NCPA - National Center for Policy Analysis


March 29, 2006

If health insurance worked like the insurance people purchase for their homes and automobiles, reimbursements would cover the expected cost of care for most providers; but patients would be free to negotiate prices with individual providers and pay more for better service. However, patients must be able to access price and quality information. Some assume that we need a new government program to kick-start needed technological changes. Yet the private sector already has developed many of the tools to solve these problems, says John C. Goodman, president of the National Center for Policy Analysis.

For example:

  • The Web site allows patients to discover therapeutic and generic substitutes for brand-name drugs, and over-the-counter alternatives. allows patients to compare prices nationwide.
  • HealthMarket has developed a model that allows insurees to compare the price they would pay for any of 20,000 procedures performed by 400,000 doctors around the country.
  • A product developed by Subimo allows patients to compare data on the quality of performance among most hospitals in the country.
  • A product developed by eMedicalfiles creates needed transparency for doctors -- it allows medical records to travel electronically as patients go from doctor to doctor and hospital to hospital.

New government policies can help in two ways, explains Goodman.

  • In markets where government is the primary third-party payer (for example, Medicare or Medicaid), policymakers can use existing technology to let enrollees access price and quality information. (Some modest steps in the right direction are already underway.)
  • We need to change the tax law to make it easier for people to self-insure for medical expenses instead of over-relying on third-party insurance. A step in the right direction is the creation of Health Savings Accounts (HSAs).

Source: John C. Goodman, "Transparency in Health Care," National Center for Policy Analysis, Brief Analysis No. 548, March 29, 2006.

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