When Art Laffer’s son returned home from Barcelona in March with COVID-19 symptoms, he went to a Nashville hospital to get tested. He never saw a doctor. He never got a coronavirus test. He saw four nurses and was sent home. His bill, which arrived weeks later, was over $15,000.
This tiny example represents a common experience made worse by the pandemic. COVID-19 has put a spotlight on a serious problem that has plagued health care consumers for far too long. Every day Americans go to the hospital and leave with crippling debt because they have no way of knowing the price of their health care beforehand.
Right now, most Americans shop for health care blind. When we shop blind, we get taken advantage of. This has persisted because insurers and hospitals obscure prices. They tell us they have negotiated great discounts for us, but they are discounts from sky-high charges set unilaterally by hospitals that are often multiples of a reasonable price, so both the charges and discounts are absurd.
Shopping blind drives up prices
This complete lack of health care price transparency has allowed hospitals to get away with charging whatever they want. Health care price opacity and the resulting surprise bills are why 64% of Americans surveyed said they avoid or delay needed medical care. And why medical bills play a role in most bankruptcies.
As U.S. lawmakers shape the next COVID-19 economic recovery legislation, they need to make systemwide health care price transparency part of the package. By requiring hospitals to post real cash prices and insurers to disclose secret, negotiated reimbursement rates before care is delivered, policymakers can not only help patients and boost businesses, but also provide an unprecedented economic stimulus.
The move would cost taxpayers nothing.
The Healthcare PRICE Transparency Act, introduced June 30 by Republican Sens. Mike Braun of Indiana and Chuck Grassley of Iowa and co-sponsored by several others, promises to do just that. The bill would allow patients to know the cost of care beforehand and, more important, would allow them to shop and compare prices for both services and coverage.