A couple of weeks ago I posted on the problem of price transparency–or lack thereof–as one of the major problems in the health care market (here). The other major problem I referred to in that post was “the fact that consumers of health care typically don’t pay the bills directly, so they generally don’t take cost into account when deciding whether to consumer health care services”.
My colleague, Thom Lambert, has a great post over at Truth on the Market illustrating the problem very poignantly with his own health care saga. When consumers don’t take price into account, health care service providers don’t worry about competing on price, which means higher prices for everyone. Thom goes on to explain how tax policies and the Affordable Care Act make the problem even worse. Excellent read!