Hospitals Mock the Free Market


Changing memory
Changing memory

Hospitals Mock the Free Market

Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences

When a patient arrives at Bayonne Hospital Center in New Jersey requiring treatment for the respiratory ailment known as COPD, or chronic obstructive pulmonary disease, she faces an official price tag of $99,690.

Less than 30 miles away in the Bronx, N.Y., the Lincoln Medical and Mental Health Center charges only $7,044 for the same treatment, according to a massive federal database of national health care costs made public on Wednesday.

Americans have long become accustomed to bewilderment and anxiety when confronting health care bills. The new database underscores why, revealing the perplexing assortment of prices for medical care, with the details of bills seemingly untethered to any graspable principle.

Even within the same metropolitan area, hospitals charge prices that differ by staggering degrees for the same procedures. People without health insurance pay vastly higher costs for care when less expensive options are often available nearby. Virtually everyone who seeks health care winds up paying inflated prices in one form or another as these stark disparities in price sow inefficiencies throughout the market.

Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences

Given the opportunity to charge without oversight, hospitals developed a byzantine pricing system that was favorable to them in every way. I am shocked. I want the free market fundamentalists to come here and take a long good look. This is reality. Market actors misusing the system to cruelly abuse their customers and our only hope of salvation, the much maligned government. That is, unless, you want to wait for the hospitals to wake up and realize that the free market is better for everybody? Maybe their profits blind them to the unearthly beauty of your doctrine? What do you think?

James Pilant

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Possibly bogus prediction contest (via Gas station without pumps)

I liked the attitude here, a little anger, a lot of indignation and a skeptical attitude, all the things this country needs more of.

I’d give it a read if I were you.

James Pilant

The Heritage Provider Network (whoever they are) has announced a $3 million prize “to develop a breakthrough algorithm that uses available patient data, including health records and claims data, to predict and prevent unnecessary hospitalizations.”  They claim that they want this to benefit individual patients, but it seems to me that the most obvious use is to deny insurance or charge very high prices to those most at risk of hospitalization. I … Read More

via Gas station without pumps

Sick But Not Going For Treatment

According to a Wall Street Journal article, Americans are foregoing treatment more often than in the past. These are hard numbers based on insurance companies and other health providers.

There are several reasons given for the decline. First, the rise of the ranks of the unemployed. Second, many American businesses and families now buy insurance with extremely high deductibles. If you have to pay the first thousand dollars of hospitalization, you are more likely to stay away from the hospital no matter what you have.

What are the ethical dimensions of this?

Some would argue that increasing costs discourages people from seeking care for minor problems like colds and that it will also encourage people to adopt healthier life styles. I have several problems with this. The most significant is where are your numbers indicating that increasing costs has either of these effects, and if you have such numbers, at what point do people with serious problems stop coming in?

The patients are the stakeholders in this debate. Increasing costs for doctor visits and hospital stay does bring down the costs of health care. But is that the goal of health care – the least possible care for the greatest sum of money?

Health care is not like most products. Let’s say for example that I want to buy a car. I can buy a used one, a new one or seek some kind of specialty model. I have many, many choices as to what I can buy and what characteristics it has. I also can just keep driving my old car or seek public transportation or walk if that’s possible. If you don’t medical care when you need it, you suffer. Sometimes, you die. It’s bad enough if it’s you. It’s worse if it is your child or your spouse.

You can live without some kinds of medical care. You can give up yearly physicals and treatment for high blood pressure and other long term illnesses. You can decide to go to the hospital only if you cannot recover on your own and spend a week or more in pain to see if you can do it (I’ve done that several times). Are encouraging people to do these things wise? What effect does discouraging medical care have on people’s lives and on health care costs over the long term?

What’s are the ethical implications? Is there an inherent problem with private medical care? The disproportionate negotiating power is extreme under these circumstances. Picture this. You are in bed in a hospital. You can’t breath right. Every time you try to take in air, it takes a tremendous effort. You feel yourself gradually, slowly suffocating. How much will you pay to make it stop? How much would you pay for a minute without that pain?

Tell me. Under those kinds of circumstances, are you in a position of equality in negotiating with a hospital over your care?

I didn’t think so. I want a balance between discouraging frivolous hospital visits (if the data indicates that there is such a problem) but not at the costs of people giving up essential health care for themselves and their children.

James Pilant