SEARCH
Current Location:
>
> This Story


Log in or Register to rate this News Story
Forward Printable StoryPrint Send us your Comments

Never Miss a Story

Sign up for email alerts

 

More Industry Headlines

Ultrasound may become initial imaging test for kidney stones Equivalent to CT and adds no radiation

Siemens' new CT gets FDA nod New opportunity for freestanding ERs

Cerner clears hurdle in acquisition of Siemens Health Services The latest on the the $1.3 billion deal

ASTRO 2014 - resounding success The 2014 show and conference brought a lot to the table

ASTRO and AANS team-up on SRS patient registry The stereotactic radiosurgery patient registry will utilize 30 participating facilities

Single fraction is just as good at multiple fraction radiation therapy ASTRO presents breakthrough study

Varian rolls out InSightive Analytics at ASTRO, an interactive visualization solution The tool gives users of the ARIA information system powerful data analysis capabilities

Siemens shows MR & CT solutions at ASTRO optimized for radiation oncology The company innovates advances in the practice of radiation therapy (RT)

Accuray puts technology on display at ASTRO The company showcased the latest in TomoTherapy and CyberKnife technology

Varian's software support for Siemens' Modulated Arc (mARC) highlighted at ASTRO Varian treatment planning software now available to oncology facilities using Siemens LINACs

Price disclosure doesn't
always work, researchers find

Will Mandatory Medical Technology Price Disclosure Actually Increase Prices?

by Barbara Kram , Editor
A new study found that pending congressional legislation seeking the mandatory disclosure of prices for certain medical technologies would likely result in increased prices and "provide no tangible benefits to patients."

The study by Robert W. Hahn, senior fellow at the American Enterprise Institute, and Hal J. Singer, president of Criterion Economics, examines the potential economic impact of the Transparency in Medical Device Pricing Act of 2007 (S. 2221), recently introduced in the U.S. Senate.

Story Continues Below Advertisement

Learn more about McKesson's solutions for radiology

McKesson Enterprise Medical Imaging Solutions Help Enhance Your Financial, Clinical & Operational Effectiveness. Learn more about McKesson solutions for radiology at McKesson.com/medicalimaging



In the report, the researchers review previous attempts by governments to impose price disclosure rules in a number of other industries including cell phones, groceries, cement, barges, railroads and long-distance telephone services. The authors use evidence from case studies and other sources to identify four conditions that, if satisfied, imply that mandatory price disclosure would provide large benefits to consumers or other purchasers.

"We found that mandatory price disclosure, as proposed in S.2221 is unlikely to benefit patients or hospitals and worse, will likely increase costs," said Hahn.

The authors write that in order for price disclosure to have a favorable effect, there must be large search costs that are reduced substantially, and that the pricing information disclosed be current. The industry-specific market conditions essential for lower prices to occur would require that any savings be passed on to end users, and that there is a large variation in the price paid by purchasers and consumers.

The report finds that the conditions that would likely result in large cost increases as the result of pricing disclosure are met.

Specifically, the report finds that:

* The medical device industry is concentrated among a few firms.
* There are few, if any, economical substitutes for many medical devices.
* Competitors repeatedly interact in the marketplace.
* Some medical devices are standardized whereas other devices are differentiated.
* Firms do not already know their rivals' prices.

The report's findings conclude that:

* Significant search costs for hospitals and patients would remain.
* Disclosure would not provide current price information since the data would be at least three months old.
* The structure of the healthcare industry would not ensure that hospitals pass cost savings on to consumers.

"Applying these conditions to the medical device industry, we conclude that mandatory price disclosure policy would likely increase prices hospitals pay for these products and provide no tangible benefit to patients," said the authors.

The study was supported by the Advanced Medical Technology Association.

More information and the full report are available at: www.criterioneconomics.com.





Related:


Interested in Medical Industry News? Subscribe to DOTmed's weekly news email and always be informed. Click here, it takes just 30 seconds.
Access and use of this site is subject to the terms and conditions of our LEGAL NOTICE & PRIVACY NOTICE
Property of and Proprietary to DOTmed.com, Inc. Copyright ©2001-2014 DOTmed.com, Inc.
ALL RIGHTS RESERVED