I thank Saikat Kundu for bringing to my attention the following NYT article. I pasted two short excerpts below.
July 31, 2013, 10:20 am
Revealing a Health Care Secret: The Price
By TINA ROSENBERG
“The Surgery Center of Oklahoma is an ambulatory surgical center in Oklahoma City owned by its roughly 40 surgeons and anesthesiologists. What makes it different from every other such facility in America is this: If you need an anterior cruciate ligament reconstruction, you will know beforehand — because it’s on their Web site — that it costs $6,990 if you self-pay in advance. If you need a tonsillectomy, that’s $3,600. Repair of a simple closed nasal fracture: $1,900. These prices are all-inclusive.”
“Why are health care costs so high? It’s not because of quality; numerous studies have failed to find any correlation between price and quality. Nor is price a function of hospital costs — not when one facility in Oklahoma City can charge 7.5 times what another charges for the same procedure.
One of the most important reasons has to do with the political and market power of health care providers, who are essentially able to name their charges. The foundation of that system is the fact that only sellers, and not buyers, know the price. If prices are secret, patients can’t comparison shop. There is no way to push prices down, or force providers to compete on price. Price secrecy hides the need for reform. “Getting prices out in the open is crucial to bringing prices down,” said Katherine Hempstead, senior program officer at the Robert Wood Johnson Foundation.”