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To Shop Smart, Patients Need to Know Price of Care

Author: Peter R. Orszag, Adjunct Senior Fellow
January 24, 2012
Bloomberg.com

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Over the past few years, the growth in health-care costs has quietly been slowing down. Naturally, we'd like to make this trend last. That means we'll need to avoid betting big on just one strategy.

Last week, the Congressional Budget Office reported that many Medicare pilot projects that were designed to reduce costs actually haven't done so. But the CBO suggested there may be promise in a "bundled-payment" approach, under which insurers pay a single comprehensive fee for treating a particular disease, rather than many fees for specific doctor visits and therapies. The health-care law includes provisions to expand bundled payments, and they should be aggressively adopted.

This is exactly how health-care reform should work: We try various approaches to generate better value from health care, many of which don't pan out, and pursue the ones that seem to be working.

Another initiative, one that's typically promoted by conservatives, is increased price transparency. For consumers to be able to play their role in keeping costs down, they need to know what those costs are.

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