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Posted: 12:00 a.m. Monday, Aug. 6, 2007

Medical price-gouging hurts the uninsured

50 million Americans have no health insurance and are getting price-gouged by hospitals. One of the medical journals did a study that compares the prices for service paid by the insured vs. the uninsured. Those with coverage might get a bill that's $5,000 for a certain service. Typically they'll also have 20 percent co-pay, so that's an additional $1,000, for a combined $6,000 price tag. However, if you don't have coverage you will be billed $12,500 for the same procedure -- that's more than twice the price! What happens is that the big insurance companies cut deals with hospitals to reduce the amount they have to pay. Then they pass some of those saving on to their customers. But people without insurance don't have the same negotiating power and get stuck with the bill that's twice as large.

It's nuts that our system is upside down and backwards, especially if the goal is to move toward consumer-driven healthcare based on quality of service and price. Clark thinks there's no excuse not to have price lists at your medical provider. Medicine suffers from lack of financial transparency -- you can't comparison shop because you don't know the price of any of the services you're going to receive. One insurance company is tackling this problem by ranking hospitals and doctors with green, yellow and red colors to tell you how much out-of-pocket expense you'll have. But we really need to be able to shop for medical care by price. Medical care accounts for 15 percent of our total national wealth each year. Of course, people are getting better health care, but Clark still has the feeling that we're squandering that 15 percent. After all, we spend more on health costs per person than any other country, yet we have shorter life-spans and are not as healthy as citizens in other nations. We're spending so much, but getting so little back. The reason is because medicine is largely not run like a business; Dentistry and Lasik eye surgery are two areas of the medical profession that are run like a business. The experiences in those offices are great because the services are driven by modern technology and the marketplace sets the price. They're great with customer service too, providing prompt appointments because they have to compete in a real marketplace.