a16z Podcast How Transparent Pricing Drives Healthcare Change
Jul 15, 2020
Dr. Marty Makary, a surgical oncologist and health policy expert from Johns Hopkins, passionately advocates for transparent pricing in healthcare. He argues that clarity on medical costs, rather than just overall expenses, is crucial for evaluating quality and driving change. Makary discusses overcoming traditional methods in medical research and incorporating data-driven insights from real-life cases, especially highlighted during COVID-19. He also underscores the need for ethical practices in a fee-for-service model and how transparency can enhance patient care.
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Price Transparency's Importance
- The healthcare industry doesn't discuss price enough, focusing on "healthcare costs" instead of "medical prices".
- This lack of price transparency contributes to inefficiencies like outsourcing medical supplies and underpreparedness for crises.
Whipple Procedure Cost Mystery
- Dr. Makary, a surgeon, highlights the lack of price transparency even for common procedures like the Whipple.
- He states that even as an expert, he doesn't know its cost, demonstrating systemic opacity.
The Markup-Discount Game
- Hospitals avoid revealing true costs, leading to a "markup-discount game" with insurers.
- This game inflates prices for negotiation and hinders honest competition, increasing administrative overhead.
