Without hospital price regulation, expect gouging

President Biden and Democrats in Congress, unlike Republicans, speak to the value of data and science. But, when it comes to hospital prices, too many of them disregard the data and allow the health care players in the market to engage in price gouging. David Lazarus reports for the LA Times on one typical hospital’s cost markups.

Hundreds of thousands of Americans unnecessarily die or suffer serious health conditions every year because they cannot afford the health care they need. A new Gallup West Health poll finds that three in ten “chose to” skip or forgo necessary care in the last three months because of the cost. Regulating health care prices would easily cut prices in half.

But, instead of reining in health care prices to a reasonable level, as every other developed nation does, our Congress looks the other way. Hospitals, in turn, often hike up prices for their services four, five and six times. Do they really need to or are their outrageous prices paying for a new marble wing and multi-million dollar CEO salaries?

At Scripps Memorial Hospital, price hikes of 675 percent, nearly seven times actual cost, apparently are routine. For a simple suture that costs $19.39, the hospital charges $149.58. And, many hospitals use the same EPIC software Scripps uses to drive up prices.

Hospitals lay blame for these markups with insurers. They say that they need to increase prices a lot or insurers won’t pay them a fair price for services. But, that’s Orwellian. The answer to insurer issues is not price gouging if you care one iota for ensuring patients can afford needed care; it’s advocating for a different payment system.

Of course, hospitals can’t justify the price gouging, and they don’t have to. They simply are trying to make up for the fact that insurers deny coverage for a lot of the services they deliver, often 20 percent of them.  So, prices for services bear no relation to cost.

Of course, there’s a simple solution. Regulated prices for all medical services and treatments. And, government-administered coverage, with the insurer middleman out of the mix or playing the role of claims administrator, not doctor and price-maker.

If . . .

• we stopped allowing corporate health insurers to come between doctors and patients,
• insurers could not decide what care is medically necessary,
• insurers could not profit from denying care,
• government, not insurers, was responsible for setting the prices we pay for health care services and treatments,

the science and data show costs would come way down and quality would improve.  Why are we gambling with people’s health when we know how to reduce the number of unnecessary premature deaths in the US considerably?

Every other wealthy nation follows the science.  It’s not complicated. It’s time we joined with them.

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• Well-kept secrets of Medicare Advantage plans
• For-profit hospitals are causing rising medical debt and personal bankruptcy
• Chain pharmacies found responsible for opioid crisis
• Beware of faulty medical devices
• Risk to older adults of underuse of prescription drugs