Health Pricing Transparency in Imperial Germany
By Bryan Caplan
Last November, Tyler Cowen enumerated fourteen things to do instead of Obamacare. Number six:
Make an all-out attempt, comparable to the moon landing effort if need be, to introduce price transparency for medical services. This can be done.
The hours are a torture; we do not know what to talk about, so we speak of my mother’s illness. It is now definitely cancer, she is already in the hospital and will be operated on shortly. The doctors hope she will recover, but we have never heard of cancer being cured.
“Where is she then?” I ask.
“In the Luisa Hospital,” says my father.
“In which class?”
“Third. We must wait till we know what the operation costs. She wanted to be in the third herself. She said that then she would have some company. And besides it is cheaper.”
… My mother has always been sickly; and though she has only gone to the hospital when she has been compelled to, it has cost a great deal of money, and my father’s life has been practically given up to it.
“If only I knew how much the operation costs,” says he.
“Have you not asked?”
“Not directly, I cannot do that – the surgeon might take it amiss and that would not do, he must operate on Mother.”
Yes, I think bitterly, that’s how it is with us, and with all poor people. They don’t dare to ask the price, but worry themselves dreadfully beforehand about it; but the others, for whom it is not important, they settle the price first as a matter of course. And the doctors does not take it amiss from them.
Assuming Remarque’s narrator has his facts straight, what’s going on? It sounds like a counter-signaling equilibrium: To ask about prices sends a bad signal if you look poor, but a neutral or positive signal if you look rich. But a bad signal about what? The most obvious candidate is your probability of paying the bill, but could it just be an issue of status? (We’re talking about the Second Reich, after all).
In any case, Remarque describes more price transparency than Americans have today. Did transparency fall over time, has German health pricing always been relatively transparent, or what?
Comments from readers with first-hand knowledge of the German health sector would be especially useful.
P.S. I’ll be at FEE’s Applying Liberty seminar in Atlanta the rest of the week. If you’re attending, please introduce yourself. 🙂