American medicine – with apologies to Charles Dickens – it is the best of times…it is the worst of times. Great science and bad bureaucracy means that no one has a clear picture of the problems facing health care. Physicians do not get paid enough, patients pay too much, many people do not get any care at all, and everyone claims that someone else needs to change. Before we start changing things, though, it seems prudent to understand the problem more fully.

The American medical system began with individual physicians treating patients within a small area and making their own arrangements for payment. We built on local hospitals and physician groups with a network of health insurance programs. Finally, we added national programs like Medicare and Medicaid. These programs do not integrate naturally, though, and because insurance programs foot most of the bill, few people actually know what they are paying for. Now, we are finally reaching a point where everyone agrees there has to be a better way.

Unlike any other business in America, people walk into a doctor’s office without knowing what the true cost of their visit, and may not get an estimate before they agree to treatment. Patients seem resigned to this because they are waiting to find out what treatment they will need. But this does not mean that you should not be able to know what a routine physical or lab test costs before you agree to have it done.

When physicians go to the doctor, they have the advantage of knowing what questions to ask – Is this test necessary? Will the outcome change my treatment plan? Is a new, more expensive drug going to be that much better than the older, cheaper one? While even doctors may not know exact prices, they have the background to be able to push for a level of transparency that the average patient may not get. Doctors know where to define the line between performance and cost.

You can justify spending through transparency, by paying only for what you want. Once the principal of transparency is translated into action, competition on the free market can begin to control prices. This will require personal responsibility on the part of the individual in making health care decisions. Americans are savvy consumers, though, and I have complete faith in their ability to make these choices. I certainly think they will do a better job than having the government make those decisions for them.

Therefore, I have introduced my own legislation, and in the spirit of transparency, it is very simple. The Health Care Price Transparency Act of 2006, H.R. 6053, calls upon the States to establish and maintain laws requiring disclosure of information on hospital charges. They must also make such information easily available to the public, and provide individuals with information about estimated out-of-pocket costs for health care services.

To clarify, each hospital within a State must provide easily accessible information on the charges for certain inpatient and outpatient hospital services provided at the hospital. Each State will determine which services must be listed, and the bill does not require uniform standards for these State laws. The goal would be for the legislation to be effective October 1, 2007.

As for estimated out-of-pocket costs, State law would require that health insurance companies provide a statement of the dollar amount likely to be incurred by an individual if he/she received particular health care items and services within a specified period of time. It is understood that estimated out-of-pocket charges may exceed the estimated costs, but the point is to move in the direction of having standard pricing. When people know what they are buying, before they enter into financial agreements, they are provided a means of comparison shopping.

Finally, but perhaps most importantly, the Agency for Healthcare Research and Quality (AHRQ) would be called upon to conduct or support research on the types of cost information that individuals find useful in making decisions regarding health care. They are to assess how this useful information varies according to an individual’s health insurance coverage. AHRQ would also be tasked with researching the best method for distributing timely information to consumers.

By allowing the States to determine their own measures, this legislation provides flexibility in accounting for regional differences in health care. It seeks to discover what truly useful information is through research. It makes hospitals and physicians the integral part of transparency that they must be, rather than handing them mandates and dictating punitive measures for noncompliance. I believe it will ultimately benefit both providers and patients by simplifying the financial arrangements and fostering trust between the two.

My bill is only a first step, but I believe it effectively moves us in the right direction without putting undue pressure on any specific area of the health care system. Transparency is part of the solution to bring accessible and affordable health care to all Americans.