Tuesday, September 30, 2014

Kaiser Permanente's Former Chairman Might Not Understand Why Healthcare Prices Are Different

Consumer Reports has published an article demanding that we get "mad about the outrageous cost of health care." Hey, I'm all for that. The article goes through the usual list of suspects, e.g. $37.50 for a single Tylenol, having two or three MRI scans when one will do, et cetera. The article also asserts that "health care works nothing like other market transactions. As a consumer, you are a bystander to the real action..." I could not agree more.

However, I was a taken aback by a statement from George Halvorson, the former Chairman of Kaiser Permanente: "There is no such thing as a legitimate price for anything in health care. Prices are made up depending on who the payer is." That is not unique to health care. It is a characteristic of almost all markets.

Read the entire column at Forbes.

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