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Hegemonic Hospitals
Hospitals Rip off the Uninsured

Surprise, surprise: a new study finds that fifty predominantly for-profit hospitals are charging uninsured patients ten times what it costs them to provide care. WaPo has more:

“They are price-gouging because they can,” said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, co-author of the study in Health Affairs. “They are marking up the prices because no one is telling them they can’t.”

He added: “These are the hospitals that have the highest markup of all 5,000 hospitals in the United States. This means, when it costs the hospital $100, they are going to charge you, on average, $1,000.”

The story emphasizes that the uninsured are the main victims of these mark-ups, since those insured privately or through government programs get discounted rates negotiated for them. However, the bigger hospitals get, the less market leverage even insurers have to bring down prices—and hospitals have been getting big indeed, in part due to the ACA. Though the uninsured have it worst in our hospital-dominated system, we all suffer from the increasing power hospitals have to control prices, and the arbitrary and expensive patchwork system that results. A radical shift away from Big Hospital will have to be part of any sustainable solution to our health care cost crisis.

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  • Boritz

    “A radical shift away from Big Hospital will have to be part of any sustainable solution to our health care cost crisis.”

    The sustainable solution, when it comes, will be rationing, end of life counseling, and whatever they want to call unlife panels in bureaucrat speak. Unless advances in IT forestall all of that, of course.

  • Andrew Allison

    The solution to this problem is simple: insure everybody!

    • CapitalHawk

      That would solve this problem, yes. It wouldn’t solve a lot of other problems, but it would solve this one.

  • Fat_Man

    “A radical shift away from Big Hospital will have to be part of any sustainable solution to our health care cost crisis.”

    Another possibility is regulating Hospitals as public utilities. I am not advocating that solution, it is clearly second best. But, if we continue down the path of government payment for all health care, regulation and price controls must follow.

  • Josephbleau

    Did we not solve this problem 100 years ago when Rockefeller was charging different freight rates to different people? We can have common carrier laws enacted to specifically target this inequity, but since we can no longer let a crisis go to waste we have to inact our new favorite agenda to solve this problem by changing everything.

  • Arkeygeezer

    I can never understand hospital bills. I am holding one in my hand where the hospital charged $569 for an outpatient hospital visit, Medicare paid $119, I paid $40, and the hospital “adjusted” $437. If that study is based on what hospitals charge, it is bogus. They should look at what hospitals actually collect.

    • Andy Mc

      That’s exactly the problem: the uninsured, as well as those on less populated plans, don’t receive an “adjustment” on their invoice, they’re responsible for the full amount. DAMHIK.

  • Kevin

    The ACA showed how unmoored “Progressives” have become from American traditions. Over a century ago the response to big business exploiting its size to extract monopoly rents farm society was the Sherman Antitrust Act and following legislation, along with its enforcement by the executive and judiciary to promote competition and through it fairness to the rest of society. In a similar manner when big business captured state legislatures it used federal interstate commerce regulatory authority to bypass captive state legislature’s anti-competitive regulations.

    However, the New Deal’s NRA and similar programs broke with this – instead importing fascist notions of big government coordinating big business and big labor in a technocratic vision. This has always and everywhere led to collusion of big business, labor and government technocrats against society.

    The ACA went with this latter flawed vision trying to coordinate insurance companies, health care corporations and the bureaucracy. Part of this had to include crushing small independent healthcare providers (private practice doctors and small offices) as central planning requires having only a few big producers to coordinate. Planners can coordinate and oversee a thousand hospitals but not a million doctors and big health corporations can lobby effectively for regulations to sustain themselves and hobble their smaller competitors. Unsurprisingly this leads to rising costs and greater profits, power and prestige for big business and the regulators who move back and forth from government to industry.

    Imagine instead if they had looked back to American history on how to solve these problems through increasing competition and avoiding privileges for insiders. Vigorous enforcement of antitrust law against monopolistic health care providers could have reversed local hospital monopolies. Interstate markets for insurance could have overcome regulatory capture by producers of state insurance regulations. But none of this was appealing because it left no room for the wise mandarin directing everything from his perch in DC – doling out favors and benefits to his friends and gratifying his ego as the omnipotent health care czar.

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