Medical costs

(Scroll down to "Soviet-Style Pricing")

California has a new law on its books requiring hospitals to disclose prices for goods and services. One immediate, eye-opening result is being able to see the Grand Canyon-esque gaps in what hospitals charge for similar treatments and medications. A head/brain CT scan, for instance, can range in price from a little less than $900 to as much as $6,600. In short, the hospitals' pricing seems to have little to do with supply and demand and no real rationale. At some of these institutions consumers must make special appointments in order to see the hospital's price list. Can you imagine, say, a hotel not letting you know how much a room costs?

Forbes likes medical savings accounts as a way of holding the line on medical costs.

Injecting consumerism into health care would give us the best of all worlds: more health care for less money. The most vivid example is laser eye surgery. Today the procedure that enables people to do away with glasses costs about a third of what it did a decade ago. Why? Because it's not covered by insurance; therefore, those performing the laser surgery have every incentive to make the procedure better and more affordable. HSAs will have the same effect: You, the consumer (i.e., the patient), will get full value for your health care dollars precisely because they are your dollars.

It works everywhere else it's tried.