“A lack of transparency results in distrust and a deep sense of insecurity.” Dalai Lama   Last week Time magazine dedicated it's entire feature to the high cost of medical care, the causes, and what can be done about it.  The journalist, Steve Brill, picked apart bills to better understand why health care costs so much.  It really is an interesting and thought provoking piece and I recommend it to you all.  You do need to be a Time subscriber to read the entire piece; however, there is an interesting side bar on transparency in costs that you can: Read here

Two aspects of this stood out to me: undecipherable bills leaving patients with no ability to make cost choices, and lack of transparency of costs to physicians making it hard to make cost effective choices.  I was in residency when the $4 generic list was launched by Wal-Mart and subsequently adopted by all of the major pharmacy chains and it changed my practice.  The marketing was great because my patients began asking me for less expensive options and felt that they could handle a $4 prescription when I felt it was right for them.  If I knew that a more expensive drug was the right solution for a patient, I went with it, but when $4 generic options were just as good, I offered them and patients jumped at the chance to save money and manage their medical conditions.  Since then, I haven't seen any other price transparency game changers and I wonder if increasing transparency in price and cost may lead to more savings.  In addition to the positive impact of lower health care costs, potential downsides surely exist and raise some key questions.


  • As individual physicians, what should our role be in cost containment?
  • What policies should be in place to balance cost containment and patient protection? 
  • What should be the role of NHMS on this issue?


The House Health committee has retained two bills dealing with price transparency so the issue will be looked at legislatively in the months ahead.  I'd love to hear what you think so that we can proactively move on this issue.  Drop me a line with your thoughts. Once I get a sense of your feelings, I'll bring the issue to NHMS leadership and work on policy development; reporting back to you when completed.


Please email any questions or comments to president@nhms.org or post a comment below.



I have always been an advocate for patient participation in healthcare purchases. Health Savings Accounts have sparked great interest from patients in learning how much things cost because they are now directly on the hook for the dollars coming out of their HSA. Providers such as Derry Imaging actually advertise lower prices for this very reason. see link: http://www.derryimaging.com/for-you/cost-savings/ High medical costs will always be with us if the buyer has no idea what a particular test or med costs. And there will never be market force competition between providers of services, meds, & medical equipment to stabilize or reduce prices because they know the 3rd party payer will be there to pick up the tab. And the consumer will not "walk" to an alternate lower cost source because it will not matter to them. There is no compelling reason to "shop around."

While I haven't read the Time article, I heard an interview with the writer. My impression is that he is absolutely right about the problem, but absolutely wrong about the solution. I need only point out that the lack of price transparency has grown institutionally and culturally in America as a direct result of the fact that patients do not pay directly for their health care (for the most part). The vast majority of payments (and ALL the high ticket payments) are made on patients' behalf by third parties ("insurance" providers including CMS). If I am right as to the root cause of this lack of transparency, it doesn't take a genius to see that increasing the involvement of any "third party" including CMS (the root cause) would never solve the problem, but only exacerbate it in the long run. Notice that those medical products that are and have always been paid for directly by patients feature total cost transparency, just like any other "normal" product. Unfortunately, this ammounts to only OTC pharmacy products and "black market" items such as Canadian pharmaceuticals. As soon as a medical product or service is "paid for" by any third party, the lack of transparency, cost shifting and confusion creeps in. This is despite the obvious fact that patients are indeed paying for everything. It is endlessley fascinating to me how profoundly the purchasing of products changes, just as a result of the mechanism of payment. Make everyone pay into a pot ahead of time, and everyone is very demanding of expensive products with questionable efficacy. Pay as you go, and everyone becomes a very discriminating cost conscious consumer. (As we all know, just having a credit card profoundly changes consumers' buying decisions). If patients really controlled the dollars they spend on health care (rather than their mandated third party "advocates"), we would see immediate and dramatic changes in what health products and services get bought. This would be catastrophic for most of the health care industry, but obviously a good thing for society in the long run. (For example, I doubt even one tenth of the mammograms and PSA's done now would be purchased if patients really understood the "number needed to screen" concept and calculated the "value" of those services to them based on cost vs. benefit). Mandating some form of transparency state wide would certainly be a step in the right direction, and a way of ushering in healthy changes in health care in a gradual way that would not catastrophically "pull the rug out" from under much of our bloated health care infrastructure. It should be noted that the ridiculously bloated and opaque system we now suffer under is supported by decades of social relationships, educational standards and systems, and legal requirements. Nothing can change in the cost arena without simultaneous parallel changes in the educational system, legal system, and cultural "system" of expectations and responsibilities. Underestimating the magnitude of the resistance to cost transparency from multiple cultural directions will make any attempts at improving the problem not only futile, but actually counterproductive. Trying to move a mountain with a spoon not only fails, but gives you a sore hand and destroys future motivation to try again with the appropriate dynamite and bulldozers. I would agree with the TIME article writer that Obamacare misses the point, and will ultimately fail to control costs (or improve health care). Allowing cost transparency and consumer involvement in health care purchases would cause dramatic cost reduction, dramatic change in our industry, and ultimately better health. I strongly support any NHMS initiative that is consistent with these principles.

Our role in cost containment should be to minimize costs to our patients while delivering quality evidence based care. Since we have no power, we have to point out obvious price raisers such as the "facility fee", the unnecessary cardiac testing in asymptomatic patients, the ridiculous charges we have for vaccines, and we have to advocate for full transparency as you point out. When patients ask about the price of anything I haven't got a clue. And I am often stunned by the absurd bills patients bring to my office for question and review. Another good example is the dual charge in men for abdominal and pelvic CT's (one CT for the price of two!) - where is that line? Perhaps when we have ACO's and are responsible for the payouts for these bills, enough of us will scream NO. WE should have a single payer system with hospitals paid globally for their costs and physicians paid a salary so there is no incentive to do more and more stuff. The NHMS should advocate for full transparency - eliminate the mishmash of billing that Brill points out. A not for profit should be just that. Any extra money taken in should go to reducing prices so they break even and nothing more. Every bill from any provider of health care service should be fully outlined, just like the grocery receipt you get at Market Basket. The NHMS should survey the membership on their ideas about cost containment. Almost never do you see doctors discussing what could be done, always uninformed bureaucrats making decisions they know nothing about. Put these ideas online for us all to see.

The price transparancy piece falls mostly in the lap of the hospital institutions and the "chargemaster" billing system of a la carte hospital care. We are so little of the financial concern that we pale in comparison. Be that as it may, I cannot tell what my fee will come out to be before I see a patient because I don't know what it is that I will be dealing with, what tests and interventions will be needed etc. As physicians, we cannot bill a la carte for services other than testing and surgeries which by all metrics, are distorted by the contracts for providing the services...and the global period that follows. We do need to be as transparent as possible because it goes a long way in trust building and simply because it is inherently the right thing to do in all dealings with people. Cost containment cannot be addressed at the "down to the metal" level because to do so meaningfully would require rationing of care and stagnation of innovation...two things that I do not see happening in our culture nor in any of the current payment systems. Medicaid comes the closest. Add to this that there are no provisions guarding providers against torts (safe harbors or reasonable care as defensible care) and the great reducer of payments, the uninsured and the growing population of state sponsered underinsured (expansion of the Medicaid Program that does not cover costs) and the cost containment issue cannot be solved. Policies on cost containment and patient protection are a farce. Patients will either purchase a card or be given a card stating that they are now insured...but may not be covered. As the expectations of the US population increase in demand for immediacy, quality (the favorite word of healthcare policy wonks everywhere)and low cost (pick any two) this will not be met as there is not adequate funds to keep the machine living and runs now mostly over providers scrambling for dimishing resources and fear of torts. When one cannot afford the fear of torts, shortcuts will be made in order to stay solvent as providers. Standard of care is maleable and will need to be reduced in order for the machine to work at all. In general the quality of the system on a grand scale is subject to limitations from decreased funding and increased work load. Think of it this way. The amount of energy it takes to "pass" gross anatomy is formidable. The amount of energy needed to "honor" gross anatomy is substantially more than that required to "pass." If passable medical care is the goal, we can do it on the cheap, otherwise, I see no other way. The role of the NHMS should be to advocate for its members to ensure that physicians are not the financial and legal scapegoats for a crumbling healthcare system and that if patients want a level of service that they feel they are either entitled to or have purchased by buying a policy from a company that sells insurance, not health care, then they must be prepared to pay up.