Health Care Costs Decline With Consumer Control

No one thought that New Jersey would be able to get is debt under control but Chris Cristy is doing just that despite the unions. In fact I believe some of the unions are not fighting him on these issues.

Consumers taking control of their own health care costs works. I have done it and I know now how much I am paying for everything that the clinic is doing to me and for me, as well as how much the hospital is charging for every service they perform. Believe me it is staggering.

Look at this way, what if there was only one store in town and no matter what you wanted to buy, you had to pay that price and buy that item. The store tells you what you will buy and how much. But maybe you would want to look around to find a better price and or maybe even a different brand? The way our third party system is set up your real health care costs are hidden but show up as increased premiums. hmmmmm

Having control, at least partial control of costs, will indeed bring down the cost of health care.

PRICE TRANSPARENCY IN HEALTH CARE: WILL IT BEND THE COST CURVE?
Source: Kathryn Nix, "Price Transparency in Health Care: Will it Bend the Cost Curve?" Heritage Foundation, June 28, 2010.

Lack of transparency regarding pricing of medical services has often been attributed as one of the factors contributing to skyrocketing spending in the health care system. However, the bigger problem is that patients are completely disconnected from the cost of their medical bills because of the growing role of third party payers, says Kathryn Nix, a research assistant for the Heritage Foundation's Center for Health Policy Studies and the Roe Institute for Economic Policy Studies.


According to Heritage experts Robert Book and Jason Fodeman:

A major source of these spending increases is a third-party payment system that often leaves the physician and patient insulated from and even unaware of the costs of the various treatment options.

Often, the patient faces the same copayment regardless of which treatment is chosen, and the extra costs are passed along to the insurance company, Medicare or Medicaid.

These payers may appear to have an incentive to encourage efficient use of resources, but ultimately they do not pay the price for inefficiency. Insurance companies offer "generous" benefits and pass on the increased spending to patients (and often their coworkers) through increased insurance premiums, and government programs pass on the spending increases to taxpayers.

Since price transparency is only part of the reason for the broken link between patients and the spending on their medical care, it can only be part of the solution. To be effective, transparent prices must be accompanied by allowing consumers to own and control their health care choices, including type of plan, says Nix.

Consumer-driven care is the key to making transparent pricing work.

This is currently available to a growing number of Americans through the combination of high-deductible health plans with health savings accounts, giving individuals greater control over the flow of their health dollars, says Nix.