Wednesday, June 4, 2014

When Hospitals compete in the marketplace, prices don’t necessarily come down!!

The GOP plan to break health care from its mandated shackles and send it into the free market to lower prices won’t work, and we have proof. 

Check out the price difference between hospitals for joint replacement surgery. Remember, hospitals are competing with each other for patients, and this list wouldn't have been possible without a new requirement in the Affordable Care Act for price transparency. Still want to repeal it?

Same quality of patient care, just a whole lot less expensive. Would it be wrong to bring all the prices down to the lowest level, knowing they reflect the actual cost + profit? This one example alone disproves Paul Ryan's theory about free market competition and lower prices. People who are willing to pay the higher price just end up skewing the going rate upward: 
Yesterday, the Department of Health and Human Services released 2012 data on hospital prices and payments. It shows that depending on where you go, hospital charges vary wildly, in some cases with gaps as large as hundreds of thousands of dollars for a single procedure. 

As documented extensively in Steven Brill’s investigation (paywall) of hospital prices for Time, not only are prices inconsistent and marked up massively over cost, hospitals provide little justification for why that is. Hospitals argue these prices are misleading, because relatively few people pay them. 

But at the very best, the pricing and billing is confusing. At the worst, it can bankrupt people (paywall), and decouples health care spending from outcomes and the procedures true cost.

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