Here’s what consumers would need to know to make health care truly market-based

If health care is going to be “market driven,” prices should be more transparent, Insurance Commissioner Dave Jones told The Sacramento Bee Editorial Board.
If health care is going to be “market driven,” prices should be more transparent, Insurance Commissioner Dave Jones told The Sacramento Bee Editorial Board. rbenton@sacbee.com

Assume for a moment that Americans wanted a “free-market” health care system, as President Donald Trump and congressional Republicans keep insisting. What would that take?

Information, to start. Markets don’t work unless consumers can compare prices. A health care plan built around free-market principles would force hospitals and doctors to disclose – publicly and clearly – their going rates for that heart bypass, knee replacement, IV drip or Caesarian section. That’s how you know House Majority Leader Kevin McCarthy, Speaker Paul Ryan and other pushers of Trumpcare have zero interest in promoting free markets. Nothing in their plan to replace Obamacare does anything remotely like that.

In fact, the House Republican plan, which would slash health insurance coverage for tens of millions to give the rich a “yuge” tax cut and further deregulate insurers, would actually make it harder for Americans to get a square deal or shop intelligently for care.

If the Republicans pushing Trumpcare truly wanted a free market for health care, they stop letting doctors, hospitals and insurers hide the price.

In fairness, though, price transparency in health care has been a distant dream even under the Affordable Care Act. The reason doctors and hospitals don’t post price lists is that prices depend on what each insurer negotiates with each provider. There’s an Anthem price, an Aetna price, a Medicare price, a Medicaid price, even a price for people who have no insurance – and insurers and providers get to treat them as trade secrets. So far, as with efforts to shed light on drug prices, lobbyists for insurers and providers have thwarted most attempts to change that.

The Obama administration tried, but its Medicare and Medicaid price database is all but opaque to laymen. A tool put together by the California Department of Insurance and Consumer Reports is far better, but still can’t compare real-time prices at specific hospitals and providers because the only information it could legally access is aggregated, regional and two years old.

Some states, such as Massachusetts and New Hampshire, have moved to kill trade secret protections for healthcare prices. But they’re small. California isn’t.

If state lawmakers here wanted to take a real practical step toward protecting Californians from Trumpcare, they should require doctor, hospital, lab and drug prices to be public, Insurance Commissioner Dave Jones told The Sacramento Bee editorial board on Wednesday. It also would help to require payers of healthcare services, including large self-insured employers, to report paid claims data to an independent organization, so that consumers in need of hospitalization or outpatient care could comparison shop.

Jones realizes this is a big ask. At least two health care transparency bills were gutted or killed here last legislative session. But he’s right to wonder what kind of free market keeps price tags under wraps.