Price Transparency and Incomplete Contracts in Health Care

Market-based health care reform solutions, which have grown in popularity and possibility, suggest when patients act more like consumers, health care prices will decrease and unnecessary medical procedures will occur less frequently. This Article argues that these benefits of a market-based health care system cannot occur without price transparency in health care contracts. Through synthesizing theories of law and economics and behavioral science, this Article proposes that contract theory provides the most desirable solution: courts enforcing a penalty default of $0 when health care contracts do not provide a price and it would be reasonable to do so.