Sunday, August 17, 2014

Study: Healthcare prices 'irrational'

Here's yet more evidence to prove what I've been saying all along: healthcare does not, and cannot, operate like a business.  "The charging system and payment system are irrational," i.e. not based on any known criteria, concluded a recent study:

One California hospital charged $10 for a blood cholesterol test, while another hospital that ran the same test charged $10,169 — over 1,000 times more.

For another common blood test called a basic metabolic panel, the average hospital charge was $371, but prices ranged from a low of $35 to a high of $7,303, more than 200 times more.

[...] Earlier studies by [Dr. Renee] Hsia [the study's leading author] identified variations in listed charges for labor and deliveries and for appendectomies in California, with labor and delivery charges varying eight to 11-fold between hospitals, and charges for a routine appendectomy ranging from $1,500 to $182,955.

So what does the healthcare industry have to say for itself?

Officials with the California Hospital Association dismissed the report as irrelevant, saying that the vast majority of patients pay discounted rates that have been negotiated by their insurance plans.

"Charges are meaningless data — virtually no one pays charges," said Jan Emerson-Shea, the association's vice president for external affairs.

That's right, my free market-loving, Tea Partying friends: prices are meaningless.  That's the way it was before Obamacare, and that's the way it is now.

But if the hospitals aren't the problem, then private health insurance must be. What's the answer? Make private health insurance unnecessary, (or an added luxury for those who want it), by introducing a single-payer insurance system, aka "Medicare for everybody."  

Medicare already negotiates the best prices on health care and prescription drugs, better prices than you or I can get, or our insurance providers. That's why this year the Obama Administration was the first ever to publicize the prices that Medicare pays for all kinds of health services, in the vain, (let's say misguided) hope that it would spur health "consumers" to ask tough questions of their providers and insurers and *shop around.

(*Just to illustrate the absurdity of "shopping" for healthcare, let's take the above-mentioned example of an appendectomy that could cost anywhere from $1,500 to $183,000. Nobody in the world researches prices on an appendectomy when they are healthy and able to choose where they get medical care; it is almost always an emergency procedure performed amid searing abdominal pain and the life-threatening risk of organ rupture. Anyway, the local EMT decides what hospital to go to, not the patient!)  

By Roni Caryn Rabin 
August 15, 2014 | NPR

No comments: