Judith Garber writes for the Lown Institute on out-of-control hospital prices. The Trump administration’s “solution” is to require that hospitals inform patients in advance about standard charges for the care the hospital will provide them. Transparency is a good thing. But, making standard hospital charges public is not likely to lead to lower prices.
Soaring and unchecked hospital prices, combined with soaring and unchecked prescription drug prices, are driving up our health care premiums and out-of-pocket costs dramatically. Large numbers of Americans are skipping needed health care services or skipping their dinners to try to pay for their healthcare because it is so costly, even with insurance. But, there is almost no indication that Congress will do anything to rein in these costs in the coming years.
Of course, the hospitals have lobbied hard to prevent any Congressional action that would shed light on their charges, much less that would regulate the prices they charge. In fact, they have filed lawsuits to block the administration’s rule requiring disclosure of charges. It seems that those efforts have been unsuccessful. The regulation requiring hospitals to disclose their rates goes into effect in January 2021.
Today, about a third of all health care spending each year is for hospital care–$1 trillion. What’s most troubling about hospital charges is that the data suggests that, as with drug prices, there is little relationship between a hospital’s charges and a hospital’s costs. According to National Nurses United, in 2018, on average, hospital charges were four times higher than their costs.
The 100 hospitals with the greatest disparity between costs and charges had charges that were 12 to 18 times higher than their costs. Not surprisingly, 95 of these 100 hospitals were for-profit hospitals. And more than 50 of them were part of the for-profit HCA hospital system.
Among other troubling issues, when patients go out of network for their hospital care, they don’t benefit from the discounted rates insurers negotiate. They are charged a super-inflated rate. This is true for people who are uninsured as well.
Moreover, uninsured patients who should qualify for financial assistance from the hospital, may not benefit from that assistance. The hospital may not even tell them about their eligibility for a lower rate.
Many hospitals also discriminate against people of color. The data reveal that hospitals in communities of color charge higher rates for emergency department care than hospitals in other communities.
The question is whether price transparency will help to drive down prices. Time will tell the answer. It’s not at all clear that either patients or policymakers will be willing to hold hospitals that profiteer accountable. If they don’t, it’s more than likely that more hospitals will raise rates and profiteer. That’s how competition seems to work in the United States.
Here’s more from Just Care:
- Hospital care: Three major inequities
- What to know about Medicare inpatient hospital care
- Plan ahead for a hospital visit: Talk to the people you love about these seven important items
- Coronavirus: What to do before you leave the hospital
- Traditional Medicare offers better home care benefits than Medicare Advantage
