Announcement of Public Workshop, "Examining Health Care Competition" ("Health Care Workshop") Project No. P13-1207 #00089

Submission Number:
00089
Commenter:
Milsom
State:
New York
Initiative Name:
Announcement of Public Workshop, "Examining Health Care Competition" ("Health Care Workshop") Project No. P13-1207
The rising cost of healthcare in the United States has seen a trend towards increased price transparency in the health care system in an effort to encourage physicians and patients to make cost-effective treatment decisions (1). Competition in the market for implantable medical devices is limited by oligopolistic device manufacturers and hospitals with weak bargaining power due to limited price information, and inconsistent hospital-physician objectives. This comment argues that price transparency of medical devices would give hospitals access to comparable pricing information for sharing with increasingly price sensitive physicians to facilitate collaboration on cost-effective device selection decisions. This may improve hospital negotiation leverage and ultimately promote market competition to gain uniformly lower prices. The best initial step towards price transparency for medical devices is encouraging hospital initiatives to refuse to sign price confidentiality clauses in purchasing agreements with device manufacturers as suggested by Robinson & Bridy, 2009. This strategy is proven to be possible despite manufacturer push back, requires little additional political or financial investment, while still creating an environment of price transparency. Further research is needed on the value of price information to improve hospital contract negotiations with manufacturers.