News | February 19, 2008

Mandatory Price Disclosure for Medical Technolgy Would Increase Prices, Report Finds

February 20, 2008 - A new study has 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, released at the National Press Club by its authors Robert W. Hahn, executive director, Reg-Markets Center and 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.

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," Hahn said.

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 health care industry would not ensure that hospitals pass cost savings on to consumers

The study was supported by the Advanced Medical Technology Association.

For more information: visit www.criterioneconomics.com

Related Content

MRI Metal Artifact Reduction Poses Minimal Thermal Risk to Hip Arthroplasty Implants
News | Magnetic Resonance Imaging (MRI) | May 23, 2019
Clinical metal artifact reduction sequence (MARS) magnetic resonance imaging (MRI) protocols at 3 Tesla (3T) on hip...
Henry Ford Hospital's ViewRay MRIdian linear accelerator system allows real-time MRI-guided radiotherapy. Shown is the support staff for this system. In the center of the photo is Benjamin Movsas, M.D., chair of radiation oncology at Henry Ford Cancer Institute. Second from the right is Carrie Glide-Hurst, Ph.D., director of translational research, radiation oncology.

Henry Ford Hospital's ViewRay MRIdian linear accelerator system allows real-time MRI-guided radiotherapy. Shown is the support staff for this system. In the center of the photo is Benjamin Movsas, M.D., chair of radiation oncology at Henry Ford Cancer Institute. Second from the right is Carri Glide-Hurst, Ph.D., director of translational research, radiation oncology.

Feature | Henry Ford Hospital | May 21, 2019 | Dave Fornell, Editor
Henry Ford Hospital thought leaders regularly speak at the radiation oncology and radiology conferences about new res
Videos | Radiation Therapy | May 21, 2019
This is a walk through of the ViewRay MRIdian MRI-guided radiotherapy system installed at ...
360 Photos | Magnetic Resonance Imaging (MRI) | May 17, 2019
This is a dedicated cardiac Siemens 1.5T MRI system installed at the Baylor Scott White Heart Hospital in Dallas.
Miami Cardiac and Vascular Institute Implements Philips Ingenia Ambition X 1.5T MRI
News | Magnetic Resonance Imaging (MRI) | May 17, 2019
Miami Cardiac & Vascular Institute announced the implementation of Philips’ Ingenia Ambition X 1.5T MR, the world’s...
Managing Architectural Distortion on Mammography Based on MR Enhancement
News | Mammography | May 15, 2019
High negative predictive values (NPV) in mammography architectural distortion (AD) without ultrasonographic (US)...
Netherlands Hospital to Install State-of-the-Art MRI Ablation Center
News | Magnetic Resonance Imaging (MRI) | May 13, 2019
Imricor announced the signing of a commercial agreement with the Haga Hospital in The Hague, Netherlands to outfit a...
Screening MRI Detects BI-RADS 3 Breast Cancer in High-risk Patients
News | MRI Breast | May 09, 2019
When appropriate, short-interval follow-up magnetic resonance imaging (MRI) can be used to identify early-stage breast...
Clinical Trial Explores Opening Blood-Brain Barrier in Fight Against Alzheimer's

Vibhor Krishna, M.D., (right) fits David Shorr with a helmet-like device used in a new clinical trial for Alzheimer’s disease at The Ohio State University Wexner Medical Center. The device uses MRI-guided imaging to deliver focused ultrasound to specific areas of the brain to open the blood-brain barrier. Image courtesy of Ohio State University Wexner Medical Center.

News | Focused Ultrasound Therapy | May 09, 2019
May 9, 2019 — A new clinical trial at The Ohio State University Wexner Medical Center and two other sites is testing