Bayonne Medical typically charged $99,689 for treating each case of chronic lung disease, 5.5 times as much as other hospitals and 17.5 times as much as Medicare paid in reimbursement. The hospital also charged on average of $120,040 to treat transient ischemia, a type of small stroke that has no lasting effect. That was 5.6 times the national average and 23.6 times what Medicare paid.
The most surprising thing about these rates becomes clear when you see them in light of two other facts about Bayonne. First, the hospital doesn’t serve some ritzy, star-studded town where you would expect high prices, but a “faded blue-collar town 11 miles from Midtown Manhattan.” Second, these high prices don’t translate into higher quality care. A 2011 report about the quality of care across New Jersey ranked Bayonne only in the 50th percentile of hospitals.Bayonne is one more piece of evidence pointing to a health care system that is fundamentally broken. In few other sectors of the economy can a service provider get away with repeatedly charging significantly higher prices for a service that is no better, and in some cases worse, than those offered by competitors. The system is also profoundly regressive, foisting the highest bills on the communities that can least afford them.The key lesson here is that health care is not, and has not been for a very a long time, a true market. That observation has to be at the heart of any health care reform going forward.[Glove image courtesy of Shutterstock]