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Information technologies could remove the 'shroud of secrecy' draped across private health care cost
Date:12/2/2013

PRINCETON, NJThe "shroud of secrecy" once draped across private health care service costs could be lifted with innovative information technologies, Princeton University professor Uwe Reinhardt wrote in a review published by the Journal of the American Medical Association (JAMA).

Until recently, private health care costs have been hidden within a "health care fortress," and increasing amounts of money have vanished behind its walls, Reinhardt writes. This has made it difficult for consumers to understand the actual cost of health care. Reinhardt cites reference pricing the cost consumers anticipate paying or consider reasonable to pay as a possible solution for cost-containment.

"The idea that American patients should 'shop around for cost-effective health care' so far has been about as sensible as blindfolding shoppers entering a department store in the hope that inside they can and will shop smartly for the merchandise they seek," said Reinhardt, James Madison Professor of Political Economy and professor of economics and public affairs at Princeton's Woodrow Wilson School. "In practice, this idea has been as silly as it has been cruel."

But electronic informational technologies are now providing a better means of transparency. One example is an independent website called Healthcare Blue Book, which boasts a search function of "fair prices" by zip code for hospital and physician services, laboratory tests and imaging services. Similarly, a start-up company on the West Coast has developed software that provides employees covered under group insurance both the prices and quality of care by individual clinicians and health care organizations. That group is looking to introduce reference pricing the cost consumers anticipate paying, or consider reasonable to pay, for a particular good or service.

Reference pricing was first introduced in Germany during the 1990s to control the price of pharmaceuticals. But the
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Contact: B. Rose Huber
brhuber@princeton.edu
609-258-0157
Princeton University, Woodrow Wilson School of Public and International Affairs
Source:Eurekalert  

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