Childbirth in a hospital is an incredibly common procedure in America. Around 4 million women will give birth in a hospital this year, and most of those births will be relatively uncomplicated. Even so, there is huge price variation around how much birth costs. One study shows it could be anywhere from $1,189 to $11,986 just for the hospital facilities (hospital room and supplies). When my wife was pregnant this year, I decided to try something: to see if I could find out how much my son's birth would cost before it took place. This video is the story of what happened:
A few things stood out to me as I explored this pricing question. The first is how off-limits my questioning seemed to be among the hospital staff I talked to. In the 10-plus hours I spent on the phone with billing offices at several different hospitals, I felt like I was constantly treading into unauthorized territory. Most seemed taken aback that I would even ask these questions.
But my questions were important; the answers could really affect what I ended up paying. The hospital down the street might be a relatively cheap one, or it might be extremely expensive — there's no way to know unless a hospital will release its prices.
What struck me the most about my quest to learn about hospital prices was the fact that consumers have no way of knowing where a hospital stands on the vast pricing spectrum. Consumers have few options to interact with pricing until after they have received treatment. It's significantly easier to find out how much it costs to park at a hospital than how much it will cost to get treatment.
All of this results in a system where consumers are totally divorced from prices. This is dangerous because prices are a key ingredient to a healthy market. We rely on prices in every industry to communicate value and drive competition. A lack of transparency can lead to an artificial inflation of prices, making consumers pay more for treatment that is of no better quality.
At the end of my unsuccessful journey to uncover the prices associated with labor and delivery, we had the pleasure of meeting our new son, Oliver. I became markedly less bitter about the opaque health care system we live in. After all, my baby was much more important a focus.
But this journey left a mark on me. I will no longer be able to enter a hospital without thinking about prices. Even though those prices are currently buried beneath layers of bureaucracy, maybe someday, as consumers demand more transparency, we will be empowered with the information needed to make the best decision for both our health and our wallets.