Healthcare and Price Discovery

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Today I had a prescription filled. It costs me $50. When the pharmacist counseled me on the medication, he asked how much I paid. When he heard $50, he walked me out to one of the aisles and showed me my medication was available over the counter for half of what I paid. He helped me get a refund and I left happy that I saved $25. I was fortunate that the pharmacist cared to ask. I’m sure many others have overpaid.

addiction

Photo by kphotographer

That is the problem with medication. Everybody is paying a different price. The people using my health care plan are no doubt subsidizing the medicine costs for those on other plans. Want to solve the health care problems? Have everyone pay the same price for any medicine or health care procedure. Then require those prices be posted. Honest markets require transparent pricing.

For costs to drop in any marketplace, there must be efficient price discovery. Health care is such a mess because there is price obfuscation at every level. As long as you can hide costs as much as possible, the costs will not drop. They may not land on the person receiving treatment, but someone will end up paying.

9 thoughts on “Healthcare and Price Discovery

  1. thomas bondurant

    thanks for the quick reply. I will look out for the term reading about healthcare. Unless they obsfucate it from me!

  2. thomas bondurant

    You know I was thinking about this post and you know know what gets my goat? When you go to the Doctor, and while he gives you a consult he will mention a procedure. Then when you ask how much it costs he will say he doesn’t know but to ask a office person. This has happened to me and my family several times. I don’t get it. If you worked at a car dealership you would know much a car costs roughly. All that info in your head and they dont know how much you make or a procedure costs? Sounds like price hiding to me.

  3. It is because everyone is getting quoted a different price. It is a racket.

    I like the AMAZON model. You know the price they are charging for a new item, plus you have the option of buying used products at different levels of quality. And 3rd parties are free to sel their goods on Amazon at any price they like. It keeps costs very low for the consumer.

  4. TigerAl

    Doctors are there for medical advice and diagnosis, financials are not really their thing and I can see why they would choose not to answer a cost of procedure/medication question. Their offices work within the framework controlled by insurance companies.
    Did you know that the annual malpractice insurance for a doctor that i know is over $100K? If someone should be blamed for this system, I say it is the people who file frivolous lawsuits and the insurance companies who use that information to boost their rates.

  5. Alex Scofield

    I’d like to buy some used health care, please.

    … Come to think of it, I think I’ve bought quite a bit of used health care in recent years.

  6. Jim

    First, it is not even insurance …insurance is supposed to cover you in case of catastrophic loss. Current insurance pays common expenses …and in case of catastrophic loss your employer ends up firing you or the insurance searches for a reason not to pay.

    Second, it is the most distorted market place I know of. Special interest has warped everything thru Washington and there is no buyer and seller like a normal market …instead there is an insured/patient, insurance, employer, doctor, lobbiest, politician, HMO, Hospital, pharma, lawyers, etc. Price discovery as MAS pointed out is impossible.

    Third, if I told you (out of context) that a group wanted 20% of your salary to keep you alive for the next year you would think I was talking about the Mafia or something. It is a national disgrace that we have to pay this much for health care (and we don’t even insure everyone!).

    I blame our corrupt political system. It is another special interest bubble similar to housing, credit and defense that exists due to government favoring their largest political contributors.

  7. Johan Lindén

    And this is why the US is now one of the most socialistic countries in the world. It’s a disgrace!

    And still people around the world think the US stands for capitalism. Pffft!

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