I think transparency is an idea for health care whose time is long overdue. It refers to publishing charges for specific procedures (including office visits) so that consumers can price compare as they do for virtually everything else. In the "good old days" this was not necessary as insurance companies paid whatever charges doctors submitted and those without insurance had their bills written off or reduced. As insurance companies became more sophisticated (read: greedy), they decided how much a doctor was allowed to charge.
Nowadays as more and more people are uninsured or have a health savings account, the doctor's charges become much more relevant. This matters little to those with an HMO, PPO, Medicare, Medicaid, or many traditional insurances as the price is preset and bears very little resemblance to what is charged. As all insurance companies pay the lesser amount of the doctor's charge or what the insurance company decides the "usual and customary" charge should be, the doctor wants to make sure his charge is not less than that lest he lose out on some money. Some insurance companies automatically deduct a certain percentage (say 20%) from whatever the doctor's charge is thereby encouraging a falsely inflated charge.
The dirty little secret is that the people who can afford the least get charged the most. Most doctor's offices and hospitals do this. Is it ethical? I don't think so, but I'm in the minority.
One of the reasons for this practice is that Medicare and most insurance companies put wording in the contracts with physicians that state the doctor has to give their subscribers the lowest rate for a given procedure. And since the insurance companies, unlike Medicare (score one for them), go to great lengths to keep a secret of the most they are willing to pay for a procedure, the doctor will overcharge knowing that the insurance company will not pay the full amount, nor will they allow the doctor to charge the patient this inflated amount. Guess who's left holding the bag? The poor schmuck who doesn't have insurance.
For example, say a doctor charges $70 for an office visit, Medicare will only allow $39 for that procedure (and yes, the differences are often this large or larger). Another insurance company that has a contract with the doctor may declare that the "usual and customary" charge for that procedure is $42. This means the doctor cannot collect more than $42 from the patient even if the deductible has not been met and the patient has to pay all of the charge himself. The patient with an insurance which is contracted with the doctor has a built in discount. The sap without insurance is expected to pay the full $70.
Say the doctor charged $45 dollars for the procedure. He's still maxing out on most insurance charge limits, but the problem is with those companies that automatically discount his charges. The $45 charge is discounted 20% to $36 while the doctor who charges $70 might get $56 for the same procedure from the same insurance company. One plan may be willing to pay $49 or $50 for that procedure, but the doctor has no way of knowing this ahead of time and so artificially charges an amount that he knows that no insurance company is going to pay in full. If he charges everyone $70, he is guaranteed to get the maximum amount from each insurance company. The naive doctor who charges a reasonable fee is still forced to provide an additional discount from many insurance companies. Instead of making a reasonable amount from an inflated charge, he is making an unfairly low amount from a reasonable charge. The only person who gets hurt by the doctor doing this artificial charge inflation is.... you guessed it, the patient without insurance.
The solution for primary care doctors, is easy. Charge everyone a fair and reasonable price and don't contract with insurance companies that demand a percentage discount. They often demand a discount in return for sending the doctor those patients in their insurance plan. This discount is not necessary if the charge is reasonable already and not artificially raised in anticipation of having to give a discount to insurance companies.
