The New York Times’ health and science blog, Well, recently published a post discussing the results of an informal quest to find the price of a hip transplant. The post received widespread attention and commentary because of its unfortunate results: it was nearly impossible to get a price quote, and the price quotes that were obtained varied by a factor of 10 and bore no relationship to either the reputational quality of the healthcare provider or the quality of the surgical services to be provided. Some of the most well-regarded hospitals quoted some of the most reasonable prices, while some less highly regarded hospitals quoted very high prices. The bottom line: there is currently little price transparency or rationality in the healthcare system. As a result, there is no 'market' in healthcare, yet.
Fortunately there are startups that are seeking to address this lack of transparency. Castlight Health, a Fenwick & West client, is a leader in this emerging space. Some insurers, moreover, are also trying to cut through the pricing opacity. The Arizona Republic recently reported that some insurers, as well as the federal government, are beginning to provide pricing information through web-based tools.
Irrespective of how we get there, price transparency—leading to price rationality—has the potential to jumpstart the transformation of healthcare. Price transparency, in addition to potentially lowering cost, also has the potential to spur behavioral change. Once individual consumers understand the true cost of healthcare, and that they are—one way or another—paying for it, they may become more active in their pursuit of wellness.
And it is becoming easier to pursue active wellness today than ever before. Hundreds of new devices and apps allow individuals to monitor various aspects of their health condition, which has in turn powered the quantified self movement. For now, quantified self is mostly about understanding one's activity level (or lack thereof) and basic biosigns such as heart rate, blood pressure, blood glucose and so forth. But eventually it has the potential to lead to individual empowerment on a molecular level. Spotting a dangerous biomarker before physical symptoms manifest could potentially lead to early detection of serious illnesses, and consequently early intervention. Early detection and intervention leads to better outcomes, which further reduces cost—a beneficial loop for individuals and healthcare as a whole.