- The Washington Times - Monday, December 26, 2005

The Medicare Act of 2003 of Congress should be heralded as the central positive legislative act of health care reform during the past decade.

Creation of health savings accounts combined with high deductible insurance compels the patient opting for such insurance to pay directly for most medical care. Empowerment of the patient with financial control for most health-care decisions is crucial to stimulating value-conscious choices and ultimately market-based pricing of medical procedures by providers. This basically shifted control of the health-care dollar away from bureaucrats and third-party payers to patients.

Purchasing decisions alone are not truly empowering, unless accompanied by sufficient knowledge to permit informed decisions. Without a doubt, it is disastrous to shift authority and responsibility to consumers without the requisite information transparency to make these often complex decisions. Moreover, the doctor-patient medical information asymmetry is not the only barrier to informed decisions; medical care pricing is shockingly hidden from consumers.

The transparency of the health-care system must be dramatically altered. We already have seen consumers now get more of their health-care information from the Internet than from their physicians. But more can, and must, be done to ensure informed decisions by our citizens. This is the key next step for government in health care reform.

First, government must mandate that medical procedures pricing is fully available and clearly presented to patients prior to any medical care. The mere presentation of prices will immediately ensure competition among doctors and other providers.

There is absolutely no reason patients should be blinded to costs of hospitalization, diagnostic studies and the long list of procedures that appear suddenly on medical bills only after the care has been administered. Can anyone imagine buying a house, or a car, or in fact anything without being aware what it would cost? It is true that if ‘someone else’ is paying in a low-deductible insurance plan, the patient may have no need or desire to care about prices. In a system where high-deductible insurance shifts direct payment responsibility to patients, they become cost-conscious and obviously must be aware of costs. Ultimately, the bizarre business model based on ‘collection rates’ for essentially inexplicable and impenetrably opaque pricing for medical procedures that the medical system has incorporated would, and should, disappear.

Second, government should mandate specific information be posted about doctors’ qualifications for potential patients. Informed consent for medical procedures has been a mainstay of medical care in free societies. This must extend to providing information about the competence and training of physicians and health-care providers.

Even restaurants must post inspection results of their facilities, and automobile dealers post mileage data. Yet doctors are not required to inform patients if they are even board-certified and deemed qualified in their field.

It is important to understand many government mandates in the U.S. health-care system are inappropriate and have negative consequences. For instance, government mandates for health coverage have resulted grossly distorted health insurance costs. Such misguided meddling has forced insurance policies to cover a broad scope of “therapies” that can be politely termed of questionable medical value — this is scandalous to a still uninformed public. And government has a heavy-handed role in setting artificial prices for the vast majority of medical procedures, thereby preventing market forces from bringing prices down.

A far more limited government stranglehold is needed on our health-care system. Yet government can play a crucial role in transferring the ultimate power to the patient — knowledge. Indeed, this may be the most important government role in the entire health-care debate.

Scott W. Atlas, M.D., is a senior fellow at the Hoover Institution and a professor at the Stanford University School of Medicine.

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