I think much of the reason health care is expensive is lack of true competition. Much of this is the result of opaque pricing and preferred or exclusive agreements.

My approach would be to mandate that all providers and insurance companies charge the same rate for the same product, however they want to define that product. Walking into a hospital should be as simple as walking into a fast food joint. (I would like one appendectomy and two nights in the hospital please. Of course more complex procedures would be like calling a mechanic with ifs, ands and buts, but I should be able to get an estimate for a heart transplant) If I call the hospital and ask how much an MRI for my arm costs they must tell. If it depends on how long my arm is, that's fine, but everybody with an arm of the same length gets the same price. If the doc wants a contrast agent added the same thing applies. The rate for all insurance companies, Medicare and self pay would all be the same.

All insurance companies and providers must use the same medical codes. When an insurance company gets a bill or sends a check both sides know exactly what it is for. "Reasonable and customary" would be easy to find out, anybody charging more than that would be pressured to lower prices. If R&C is defined as, say, a 60 percentile price then as the formerly high cost places would reduce prices, the value of R&C drops and forces others to reduce prices. With my transparent pricing I don't doubt that this would occur. Heck, we can mandate price lists be posted on the internet.

Similarly for insurance. There would be no group rate or veteran rate or any other preferred pricing. A company can price on age, weight, tobacco use, etc, but two people with the same characteristics always pay the same. They would be free to offer coverage for whatever they wanted, whatever deductible and copays, etc.

Employers would be free to purchase insurance for employees but with no more group pricing this would be nothing more than a paperwork convenience, or employees could take a check for the subsidy amount and shop around for their own.

I would even be ok with government defining a limited number of plans as long as there was a truly broad range. This way there is no argument about what is covered or not, what is experimental procedure, etc. But if I want a plan that covers only major medical and no office visits, no physical, no OB/GYN care, and has a $50,000 deductible I should be able to buy it. Make me show I have 50k in liquid assets, but let me buy the plan I want.

Edited to add: I just had the thought... what happens to pricing of procedures by providers if insurance companies pay no more than reasonable and customary but will send the patient a check for half of the savings if they have a procedure done at less than reasonable and customary? That incentive can only be up to the deductible amount to avoid any perverse incentives but I imagine a system of transparent pricing and real incentives to consumers to save insurance company dollars would show up in big price drops.


[Post edited by 81_Hokie at 05/09/2017 07:36AM]