Price is the ultimate signal, unless you are in healthcare!
I came across this article on a study that evaluated the price of common blood tests.
The article explains that, in the study, a common lipid panel blood test was priced anywhere from $10 to $10,000.
“For this research, published in August in the British Medical Journal, Hsia and her colleagues compiled reams of data about how much more than 100 hospitals charged for basic blood work. The prices these facilities charged consumers were all over the map.
The charge for a lipid panel ranged from $10 to $10,169. Hospital prices for a basic metabolic panel (which doctors use to measure the body’s metabolism) were $35 at one facility — and $7,303 at another.”
Now, it doesn’t take a study of this sort to help us know that there are microeconomic issues in the U.S. healthcare system.
What it does do is illuminate an important point: Price information is critical. Price is the signal by which we navigate the world. When prices (or visibility of prices) get messed up, behavior gets…odd.
In the case of U.S. healthcare, the combination of multiple service entities, billing obscurities, and the disconnect between payors, providers, and consumers brings you pricing disparities of the sort the article outlines.
When was the last time you checked the price of medical service before you consumed it? It’s one of the few services we utilize with impunity but without knowing the cost beforehand.
Can you imagine driving a car off the lot without knowing the price (even if you have to haggle)? A car can run about the same transaction size as many medical procedures, yet we wait for the bill.