The a16z Show 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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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.
Pricing vs. Value
- Julie Yoo raises concerns about value, noting that patient complexity influences costs.
- There is tension between transparent pricing and accounting for individual patient needs.
Airline Analogy
- Dr. Makary uses an airline analogy to criticize healthcare's opaque pricing.
- He advocates for transparent pricing for shoppable services, arguing against hospitals obscuring costs.
