Effective healthcare reform should address the persistent problem of a system that hides prices, shields middlemen like pharmacy benefit managers and insurers from accountability, and leaves patients with little real leverage. Reforms can lower healthcare costs by increasing transparency, expanding competition, and reducing the influence of middlemen whose practices operate largely out of public view.
Markets work poorly when prices are hidden. Healthcare is not a typical market, but it is still shaped by incentives. When patients cannot see prices in advance, providers and intermediaries like pharmacy benefit managers and insurers face less pressure to justify costs. Over time, that dynamic pushes prices higher and weakens accountability throughout the system.
Healthcare has operated this way for decades. Patients rarely know the cost of a procedure, a prescription, or an insurance plan until after they have already committed to it. Bills arrive long after care is delivered, often revised multiple times as insurers and providers negotiate behind the scenes. Transparency alone will not fix healthcare, but keeping prices hidden almost guarantees higher costs and confusion for consumers.
A major contributor to this problem is the growing role of intermediaries. Pharmacy benefit managers, insurers, and other middlemen shape pricing through rebate arrangements, coverage decisions, and administrative rules that patients rarely see. These systems reward complexity and volume rather than clarity or value, and they influence where money flows within the healthcare system. Prices paid by consumers often reflect negotiated incentives that have little to do with the actual cost of care.
Worse, the current broken system is geared to benefit who pays for health care (insurers and PBM middlemen), instead of benefitting patients.
Effective reforms should call for clearer, plain-language disclosures from insurers so consumers can better understand coverage and pricing before enrolling. It should also require insurers to spell out, in easy to understand language, what is covered, what is not, and how often claims are denied. Greater transparency around how premiums are used, including how much insurers spend on patient care versus administrative overhead would also help patients (or their employers) understand how efficiently different insurers operate. Limiting rebate‑driven practices that reward intermediaries for higher list prices rather than lower costs for patients should also be addressed.
The idea is straightforward. When families can see what they are buying before they buy it, they gain leverage. When employers can compare plans for their workers based on real information rather than marketing language, competition has a chance to work. And when intermediaries are forced into the open, it becomes harder to raise prices quietly while shifting blame elsewhere.
None of this assumes healthcare can be treated like an ordinary consumer good. Emergencies exist. Insurance risk pooling matters. Regulations will always play a role. But those realities make clear price signals more important, not less. A system that hides prices and makes it harder to tell who is responsible inevitably shifts power away from patients and toward institutions that face little pressure to change.
Hidden prices have allowed costs to rise while responsibility remains unclear. By forcing more of the system into the open, efficient healthcare reforms can take a meaningful step toward restoring discipline and putting patients back in a position to make informed decisions. Whether any reform ultimately succeeds depends on execution, but targeting the markets’ current opacity, which have gone unaddressed for far too long, is an essential reform.
Anthony Velasquez is a Pacific Research Institute communications associate.
