In the new Cato Institute book Overcharged: Why Americans Pay Too Much for Health Care, Cato adjunct scholars David A. Hyman and Charles Silver share stories of Americans who have been gouged by hospitals and other health care providers—Americans like Eric Ferguson:
After being bitten on the foot by a snake while taking out the garbage, Eric Ferguson went to the Lake Norman Regional Medical Center, where he was given anti-venom and monitored. The hospital’s list price for the medication was $81,000. The discounted price his insurer negotiated was about $20,000. The retail price of anti-venom online? $750.
Overcharged explains that hospitals and pharmaceutical companies can charge such outrageous markups solely because government grants them anti-competitive monopoly powers and encourages widespread third-party payment, where nobody has an incentive to curb excessive prices.
Today at 2 p.m., Ferguson will tell his story in person to President Trump and members of his cabinet at a White House roundtable on “Fair and Honest Pricing in Health Care.”
While the Trump administration has admirably required hospitals that participate in Medicare to post prices, simply posting “chargemaster” prices won’t make a difference. Chargemaster prices are so complicated, patients wouldn’t use them even if they were spending their own money. And when it’s someone else’s money on the line, forget it.
Overcharged shows price transparency and price competition won’t happen until we let consumers—rather than politicians and employers—control the $3.9 trillion Americans spend on health care each year.
To watch Eric Ferguson tell his story to Cato last June, click here or see the video below: