IN 1988, a radiologist opened a free-standing mammography clinic in south Oklahoma City. He not only promoted the service but the price of the procedure. That price, he said then, was “virtually unheard of in this market.”
What was truly unheard of at that time was advertising medical procedures, with or without the price. Only recently had professional association restrictions against advertising been voided by the federal government. This unleashed a flurry of medical-related advertising. The Four P's of Marketing — product, place, price and promotion — became a routine part of health care.
At an April hearing of the House Committee on Oversight & Government Reform, U.S. Rep. James Lankford praised the Surgery Center of Oklahoma to make the point that open competition in health care can drive down prices. Surgery Center posts prices for dozens of procedures on its website. The Oklahoma Council of Public Affairs (OCPA), a free-market think tank, says health care consumers benefit when competing providers disclose prices.
Disclosure is key. Providers have always answered questions about pricing, when asked, but generally didn't go out of their way to reveal them. In most areas of life, goods and services are touted on the basis of price. In health care, the price of services has often gone unspoken because “someone else” is paying for it.
This “someone else” has been private insurance carriers and/or the employers who pay the bulk of insurance premiums. Increasingly, “someone else” will be the federal government. Conservatives have pushed for modest co-pays even for lower-income residents: People need to know how much things really cost and determine if a given procedure is needed or desired.
Lankford, R-Oklahoma City, called attention to Surgery Center's unique transparency. The OCPA's Brandon Dutcher cites the case of a man in Dutcher's hometown of Bartlesville who used the information to leverage a better price for a surgery he needed. He asked a Bartlesville provider to match Surgery Center's posted price, which was less than half of what he'd been asked to pay in Bartlesville. The request was granted.
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