John Goodman links to a recent (gated) study from the Health Affairs Blog.
We examined both quality and actual medical costs for episodes of care provided by nearly 250,000 U.S. physicians serving commercially insured patients nationwide. Overall, episode costs for a set of major medical procedures varied about 2.5-fold, and for a selected set of common chronic conditions, episode costs varied about 15-fold…there was essentially no correlation between average episode costs and measured quality across markets.
That indicates to me that there is a lot of room for patient's to bargain for healthcare and push for lower prices. If more patients spent their own money, they'd do so. And, in so doing, they'd lower their own healthcare costs and the costs of the overall healthcare system.