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Lack of Transparent Pricing in Healthcare is Killing US

In response to a request for an assessment of the roof on your home, imagine a roofer saying, "Yes, there is some damage, and this roof needs to be replaced." For most people, their next question would be, "How much will it cost and when will you be available to do the work?"


What if the roofer said, "I'll do the work next Wednesday and send you a bill after I am finished. Don't worry, it probably won't cost you much because you have insurance. But I can't tell you our cost now because it will vary based on the type of insurance you have, as well anything out of the ordinary we uncover while performing the work."


How many of you would hire this roofer?


Imagine you do hire this roofer, they perform the work, and four weeks later you receive a bill for significantly more than you expected that contains itemized costs for the following:


  1. General planning time

  2. Time to measure the roof

  3. Tape measure usage

  4. Time to determine the number of shingles needed

  5. Transportation of plywood, shingles, nails, and roofing felt to your home

  6. Unloading the plywood, shingles, nails and felt fee

  7. Plywood cost

  8. Shingles cost

  9. Felt cost

  10. Nails cost

  11. Hammer usage time

  12. Ladder usage time

  13. Truck usage time

  14. Gas for the work trucks

  15. Workers travel time to and from your home

  16. Extra cost to take the felt and shingles up to the roof (this is difficult work, hence an extra charge)

  17. Roofers' fees

  18. Roofer assistants' fees

  19. Worker suntan lotion fee (spring, summer, and fall only)

  20. Cost to take off the old roof

  21. Overtime cost for work after 5:00 pm

  22. Cost to clean up your yard after the roofing is completed

  23. Cost to haul old shingles to the landfill

  24. Bill preparation time

  25. ...and so forth

The bill's level of detail is absurd, the cost is a shocker, and when you ask why it was so expensive, you find out (after the third call) it is because some of the workers hired were outside of the insurance coverage plan. This alone would be bad enough, but then you find out a neighbor down the street had a similar job completed by the same roofer for 40% less cost than yours. The former is irritating, but the latter is just infuriating.


How would you feel? How long do you think this roofer would be able to stay in business? Could any company or any industry survive with such unknown pricing?


The answer is no -- except for healthcare. In healthcare, this happens thousands of times a day.


And the healthcare industry gets away with it because consumers allow it. And we’ve allowed it for years because we’ve heard, "Oh don't worry about it, insurance (or Medicare for those over 65) will pay for it. It won't cost you anything."


This lack of price transparency, along with healthcare being insulated from normal market forces, has allowed healthcare costs to skyrocket 250 percent over the last 20 years, while inflation has only risen 50 percent (which is bad enough).


This needs to stop. The nation cannot afford healthcare costs to go up another 250 percent over the next 20 years.


In our book, Healthcare is Killing US: The Power of Disruptive Innovation to Create a System that Cares More and Costs Less, we show how a lack of price transparency is hurting all of US and how the healthcare industry can improve.

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