Trump Has A Big Problem To Face: Healthcare Pricing

(REUTERS/Kevin Lamarque)

Steven Weissman Former Hospital President
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The President is surrounded by people who have taken a vow of silence on healthcare pricing.

Any politician who mentions the pricing of medical services will incur the wrath of an industry that spends more on lobbying than the defense, aerospace, and the oil and gas industries combined. Healthcare has become the largest employer in the U.S.

Partisans on each side of the aisle tout their respective ideologically driven insurance reforms. Where the rubber hits the road, however, lefties and righties take the same approach, which is to assure payment to hospitals, labs, big pharma and physicians no matter how insane the pricing. A full year after taking office, Trump has followed the 535 members of Congress and past administrations in maintaining dead silence on the pricing of medical services.

Every consumer understands that there are no prices for medical services at all. Ask any hospital, lab or physician the price of anything and all you get is a question: “What insurance do you have?” If you are uninsured or out of network you may be charged 12X more than your neighbor for the exact same service. Obtaining a legit price is incredibly difficult.

Health providers are the only sellers of consumer goods and services permitted to charge every customer a different price for the same item. It is a system designed to take unfair advantage of you, often at your most vulnerable point in life.

Industry apologists claim everyone is “charged” the exact same thing – it’s just that we all get a different discount. By amply greasing the political wheels, this nonsensical rhetoric has won the day, shielding health providers from price competition. Consumer protections applied to all other businesses in the USA, don’t apply to healthcare. Skyrocketing prices for medical services are no mystery. The industry is structurally built to assure prices go berserk.

The lack of legitimate pricing for healthcare services is the reason the U.S. has the highest priced medical care on earth by a margin of at least 50% per-capita. In 2016 we spent 3.3 trillion dollars ($10,348 per person) on healthcare. Based on costs in nations with better rated care and longer life expectancies, we were overcharged by 1.1 trillion dollars.

As a businessman, Trump was involved in numerous lawsuits contesting the bills of suppliers and contractors. He is a self-proclaimed expert on the concept of paying fair value for services rendered. But, when consumers must preserve their health, obtaining medical services for fair value has been rendered virtually impossible.

Many Americans felt deceived by the ultimate healthcare promise of the last administration – lower costs. Skyrocketing insurance premiums helped propel Trump to the presidency. But insurance is merely a means to finance and pay medical bills. We have been suffering from the cost of medical services – high premiums were always just a symptom.

The New York Times summarized significant research establishing that the reason healthcare is so expensive is because of unjustified rapidly rising prices for medical services.

Medical providers should be free to set their own rates, but patients must be empowered with legitimate pricing information – meaning everyone pays the same price for the same service by the same provider. Making medical providers operate under the same rules that apply to all other businesses would slash prices 33% overnight and we would still have about the most expensive healthcare on earth. A Google search would allow consumers to shop for any medical service.

The industry designed our system to assure that there is no price competition. The result is that we’re all trapped in the deepest, darkest “sh**hole” of all.  As the Times stated, “. . . lowering prices would upset a lot of people in the health industry.”

Let’s pray our businessman President comes to understand that healthcare is the business problem he was born to solve.

Steven Weissman is a former hospital president.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.