The perils of transparent pricing: the time for speculation is over: transparent pricing is becoming a reality for hospitals.

Two years ago, transparent pricing was the subject of speculation more than certainty. Recent events and emerging trends, however, have caused this phenomenon--in essence, the publication of a hospital's retail prices--to become more of an imminent reality, bringing a potential sea change for

These recent events and emerging trends should provide a sharp and sudden wake-up call for healthcare executives who don't want to lose competitive market advantage by being unprepared for this dramatic shift.

Physician, Steel Thyself

Somewhat surprisingly, the movement may start with the physicians. In August, Aetna, one of America's largest insurance companies, announced that it would start publishing the rates it negotiates with physicians in the Cincinnati area. This unprecedented maneuver was expected to initiate a cascade of similar practices by other insurance companies in multiple markets throughout the country.

Under the proposed Aetna arrangement, consumers could log on to the insurance company's web site and compare prices on 600 common services for every Cincinnati-area primary care physician and specialist in Aetna's network. The media coverage of the announcement included examples of variances in prices among cardiologists of up to $50 for relatively simple office procedures. As would be expected, the medical community in Cincinnati expressed concern about the practice. However, the president of Aetna was quoted in the Wall Street Journal as saying, "To create a more functional healthcare market, we need more transparency."

On the surface, Aetna's decision may not appear to be all that significant, especially given its narrow geographic scope. Nonetheless, this dramatic proposal, coupled with other concurrent trends and market forces, may just prove to be the crack in the dyke that opens the way for a sweeping tide of related moves and market maneuvers throughout the healthcare industry.

A growing number of organizations--ranging from employers to consumer groups--want to see rising costs in healthcare begin to stabilize, if not abate. Many observers and pundits believe that increased awareness of pricing will heighten accountability on the part of both providers and consumers. Consequently, although Aetna's announcement was greeted with a measure of skepticism and chagrin by the medical community, it was roundly applauded by prominent groups and organizations trying to rein in healthcare costs.