How to address healthcare's 'pricing failures'

Healthcare is currently experiencing a pricing failure that the country must fix in the coming years.

That's the opinion of Forbes columnist Dave Chase, who writes that the profligate spending on healthcare services prevents some states from funding education and other initiatives. He has suggested a specific fix to the issue.

Much of the burden would fall on employer groups that self-insure their employees. In many instances, such groups would steer patients to providers whose costs are radically lower than in the traditional provider group. He mentions radical providers such as the Surgery Center of Oklahoma, which offers full transparency and complete pricing for each procedure. In exchange for steering employees to radically lower-cost providers, they would waive their co-payments, deductibles and other out-of-pocket costs.

This system--which is being explored by some private companies to assist employee group--could save a minimum of $1,000 per employee per year, according to Chase. In some areas of high-volume care, a colonoscopy would cost $1,200, while a joint replacement would cost less than $20,000.

Chase suggested companies taking this route could not wind up with a significant increase in their earnings, but could improve the overall health of their employees. 

He is not the first prognosticator in recent months to predict that the U.S. healthcare system is out of control. Charles Hugh Smith wrote just last month that the rising prices and lack of transparency is unsustainable in the long run. Indeed, the system is replete with examples, such as the 20-minute eye exam that cost $1,550, or the fact that many states still receive failing grades for price transparency.

To learn more:
- read the Forbes column