A Gold Standard For Medical Pricingby Lukas Zinnagl on Dec 31, 2012 • 8:25 am
Before you continue reading, look at the graph on the right hand side. It was published by the Archives of Internal Medicine, US Centers for Disease Control and Prevention and I picked it up in a piece in the recent Wired Magazine by Andy Grove, former CEO of Intel.
This graph is ridiculous.
Sure, it only takes costs in the US into account but it beautifully shows how healthcare is still a totally intransparent area. At this point, I would usually come up with a comparison to the airline industry, but here this doesn’t apply since the price tag of a simple round trip ticket is equally irrational and inconsistent, depending on where you try to buy it, which airline, which time of the year and the list goes on.
What the healthcare world needs, Mr. Grove, nicely put at the end of of this guest article
But what they’ll need is transparency in treatment, cost, and institutions—in other words, a digital sticker. Getting that transparency has to be Job One.
Obviously there are many many factors involved that determine the pricing of a medical procecdure or a medical drug and we agree on the point Mr. Grove made, but it’s time to take this thought one step further.
What medicine needs is a gold standard. The Big Mac Index for medical procedures.
The gold standard, as we all know it, should not only be true for medicine as a science, but also for medicine as a business, which honestly, it is in many parts of the world. Such Indexes are surely not liked within an industry if they are linked to money. The gold standard in a scientific sense works because it doesn’t affect the income. Nobody likes over-ruling indeces that set the standard, esepcially when it comes to your salary. But when looking at the graph again, it becomes very very clear that such a gold standard oughts to be set and defined (probably by the WHO).