KUNM

Think Tank: Why Can't Patients Compare Prices?

Oct 9, 2014

Credit Bill David Brooks via CC

A nonpartisan think tank in New Mexico released a report on health care costs this week suggesting that providers should be more transparent about the price of procedures up front.

Fred Nathan is the founder and executive director of Think New Mexico. The group’s report says New Mexicans are spending more out of their pockets for health care than ever before, and most of that extra money is going to administrative costs—not to doctors’ salaries or improved care for patients.

KUNM: Why can’t patients shop around and compare prices before they shell out cash for expensive medical procedures?

There really is no reason that that can’t happen. It’s just you know like many things: This is the way we’ve always done it. It’s change, and that’s not always easy to bring about.

In New Mexico in 2014, it’s easier to get information about purchasing a household appliance in terms of price and quality, than it is getting that kind of information about a common surgical procedure.

KUNM: And we’re all used to that, right? We’re all used to being like, Hey, I have to lay out a significant amount of money for something, and so I’m going research what’s the best deal.

Right. And that works in every other part of our economy except for the 18 percent that we spend on health care. And that’s why we think this is a ripe time for change.

KUNM: And not knowing in advance poses sometimes hardship for people as well. You need some medical procedure. You have no idea what it’s going to cost. You just have the sense that it’s going to be a lot. But that could be a pretty broad scale, right?

There’s a very good recent New England Journal of Medicine article that we cited in the report that demonstrated pretty conclusively that stress caused by the uncertainty of knowing how much these procedures costs actually harms patients’ ability to recover from their underlying medical issue.

And so again, if we could bring about at least some predictability, not only would it help people’s pocketbooks and ability to plan and to shop around, it might also help literally in the healing process.

KUNM: Now, in your report, you also pointed out that we’re spending a lot more on health care.

Just as a fraction of state GDP, it’s gone from about 6 percent in 1980 to about 17 percent in 2009, which is the last date that we can get statistics. So it’s taking up a bigger and bigger share of our economy.

KUNM: What’s the solution? What are the ways we can improve health care costs and transparency?

We think the first really big reform that’s needed is something that 14 states already do, which is to create a statewide website where consumers and patients can go to find out information about price and quality for whatever surgical procedure they may need at any one of the 44 hospitals in New Mexico.

Think New Mexico offers other reforms on this topic as well, including the elimination of price discrimination and secrecy about pricing. The full report is not yet available online.