As Democrats and Republicans fight over details of new rules for medical price transparency, the welfare of patients is lost in the fog of partisan war. If you look critically at how healthcare dollars currently flow, it is clear that price transparency won’t work. Moreover, all such rules can be made unnecessary.
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Both and bills preserve and build on current legislation. They both strengthen enforcement controls, increase penalties, and require providers to fill out new forms with terabytes of mostly useless data. The House bill adds ambulatory surgical centers and pharmacy prices. The Senate proposal adds clinical diagnostic labs and imaging centers and requires extensive, detailed itemized bills provided to patients. The differences are small and minor.
By restoring spending control with the necessary funds to the public, all price transparency and BURRDEN become unnecessary.
The ostensible reason for promulgating price transparency rules is to reduce the prices for medical services that have consistently outpaced the rate on inflation over recent decades. The word most commonly seen attached to healthcare in news articles, on radio, and TV is “unaffordable.”
There are five reasons why price transparency cannot achieve its stated goal of reducing healthcare prices. 1) Price (charge) is not the same as payment. 2) Financial — third party payment structure; 3) Unrecognized but very real cost of BURRDEN: bureaucracy, unnecessary rules and regulations, directives, enforcement, noncompliance; 4) Encourages, even facilitates, fraud; and 5) Perverse incentives, such as rewarding insurance with profits for denying payment for patient care.
In the typical, everyday free market, price is what the consumer pays. In healthcare, price has no consistent relationship with payment. Payment amount varies with each contract and this year’s federal Allowable Reimbursement Schedule. Furthermore, a third-party, not the consumer (patient), decides what will be paid, which is proprietary information, confidential, and typically a small fraction of the published charge.
Financial disconnection is the crucial difference between a free market and the third-party-dominated, centrally controlled market that is U.S. healthcare. In a free market, the consumer decides how much he wants to pay, chooses the provider, and pays with his own dollars. In that market, because the consumer pays from personal funds, there is a powerful incentive to spend less, to save money. When a third party pays, the consumer incentive is missing. Thus, making prices transparent to consumers won’t change spending behavior.
Every time Congress passes healthcare legislation, the cost of BURRDEN goes up but is not accounted. Last year, the U.S. expended $5 trillion on healthcare — half (!) was spent on . Those were healthcare dollars that produced no patient care. As new rules and regulations are passed, even more money will be diverted from care to fund bureaucracy.
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Since disconnection — of buyer (patient) from seller (provider ) — is the reason healthcare is failing and why price transparency won’t work, reconnection will permanently fix both problems.
Reconnecting the buyer with the seller means the buyer, not a third-party, pays the seller. The patient “owns” his or her healthcare dollars and is free to choose whom to pay, how much, and what he or she will get, the same way a consumer buys all other services and goods.
Half of the country — families of 84 million workers — are covered by so-called “employer-supported” health insurance. An average of $36,993 were wages last year that each employee earned but did not receive — it was sent to an insurance company. If, instead, that money were paid to the worker and placed in a new , there would be a free market for health care of more than $2 trillion. Similar “give the money to the people” (President Trump, November 2025) plans are possible for Medicare and Medicaid populations.
With consumers in control of healthcare spending, sellers must advertise their prices if they want to have customers. Advertised prices must be what the customer pays and what the seller receives, just like in every free market and unlike the current third-party payment system.
By restoring spending control with the necessary funds to the public, all price transparency and BURRDEN become unnecessary. Prices would very likely plummet due to free market forces. Care would become affordable. Hundreds of billions of taxpayer dollars will no longer be wasted and cannot be fraudulently taken.
READ MORE from Deane Waldman:
The Wrong People Hold Health Care Purse Strings
Why Your Phone Got Cheaper — and Your Health Insurance Didn’t
Empower Patients, Reclaim Healthcare
Deane Waldman, M.D., MBA, is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of the Center for Healthcare Policy at Texas Public Policy Foundation; founding Director of the New Mexico Health Insurance Exchange; and author of award-winning, Become an Empowered Patient. Follow him on X.com@DrDeaneW or visit website www.empowerpatients.info.
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