Why we pay $1000 for a $20 medical test

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  1. wither

    The problem is that few patients understand the concept of what things cost- the prices are all over the map, there is no transparency to costs vs pricing, and there is no communication of efficacy or cost/benefit ratios. Few patients could really understand this information in the first place (lots of studies on this subject). The system fails the "free market" test on nearly every front. That aside, I believe a few things would improve the situation (and probably destroy a large portion of the current, broken system in the process:

    1. Transparent pricing. People need to know, up front, what things will cost them.

    2. People need to know if the costs are competitive. This can be done with pricing indexes, both on a regional/national scale, and on an international scale. The pap smears in this article still cost $10-$40 outside of the US borders. Same efficacy. Same outcomes.

    3. Standards of care need to cease to be governed by sales teams at pharma and test labs. They need to be governed by ongoing efficacy and outcome studies. The studies will not only save or improve lives, they will cost a lot less than the savings realized by their results. When the "cost to treat" (the additional amount that needs to be invested before a single positive outcome is realized) exceeds alternative approaches for generating positive outcomes, the choices for standards of care will become obvious and informed.

    This last suggestion has the potential to put a large portion of the ineffective health care sector out of work. It is unfortunate, but it is these kinds of changes that allow an economy to be more productive.

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