Transparency in health costs

A recent issue brief from the Congressional Budget Office (CBO) discusses whether increased transparency in prices for health care services and drugs would curb rapidly rising costs. CBO concludes that the implications of transparency are ambiguous because of a multitude of factors, such as the lack of incentives or feasibility for individuals to change their purchasing behavior, and differences in markets where providers or insurers are concentrated. The brief also cautions about the effectiveness of transparency: on the consumer side, health insurance cushions the full cost of health care; on the provider side, transparency may lead to higher prices but would probably narrow the range of prices.

CBO notes 3 states that provide cost information: Wisconsin's PricePoint System and California's Hospital Chargemaster Program give hospital charges, while New Hampshire's HealthCost is more comprehensive.

Increasing Transparency in the Pricing of Health Care Services and Pharmaceuticals (pdf, 8pp/132kB), June 5, 2008

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