In an opinion piece for the Financial Times, a surgeon, Nisarg Patel, argues that hospital prices are the big problem with our health care system. Hospital prices demand government attention.
Hospitals spend crazy amounts on new glamorous buildings, fancy lobbies with luxurious stone finishes and all types of vegetation, PR, and executive compensation, driving up their prices. He’s right that “it is the prices stupid,” (as well as the administrative costs,) that are responsible for astronomical health care costs. But, Patel fails to acknowledge that Medicare for all is the only solution.
Patel writes that hospitals have become big businesses. At the same time, they have been huge beneficiaries of federal dollars, our taxpayer dollars. During the coronavirus pandemic, they received literally billions of dollars in aid.
Much like Wall Street after the great recession in 2008, which had become too big to fail, Patel argues that our healthcare system has become so large that it cannot serve patients’ needs any longer. It’s “too big to heal.” Hospitals have extraordinary influence in Congress. Many also have monopoly pricing power.
Hospital prices have more than doubled in 20 years, writes Patel. Inflation has averaged 60 percent over that same time period, less than half hospital price growth. These prices account for more than three times what the US spends on prescription drugs. And, collection agencies now hold $140 billion in medical debt.
Unless hospital prices come down, more people are going to be pushed into medical debt and poverty when they develop complex and costly conditions, even if they have insurance. Premiums are rising, as are deductibles and copays.
The biggest hospitals are cutting deals with the big insurers. These big hospitals, in turn, are crowding out the smaller ones. And, there’s little evidence that consolidation in the hospital industry improves health outcomes or benefits our health in any material way.
Patel offers three ways to protect against growing hospital power and address these challenges:
- Medicare should discourage, rather than encourage, hospital consolidation; Independent physicians should not be burdened with so much paperwork; Data on health care quality and cost should be available for public scrutiny.
- Government should promote investments in independent primary care and specialist care, as well as community clinics and other non-hospital based care.
- Government should block hospital mergers.
Patel’s proposals are all band-aids. They will not begin to fix out-of-control health care costs in the short or long-run. They are also not more likely to become law than Medicare for all. One incremental step on the hospital side that would make a difference is all-payer rate-setting. Much like drug price negotiation, it would rein in costs.
The only real solution to crazy high health care costs, if we care as a country about guaranteeing access to health care for everyone, keeping people from medical debt and improving health outcomes, is Medicare for all.
Here’s more from Just Care:
