“Market Power of Hospital Chains” making healthcare expensive

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Jan 29, 2015 No Comments ›› admin

LOGIC MINUTE
by Lynn Woolley

The “affordable “ part of the President’s “Affordable Healthcare Act” is cruel joke on the American people. With the exception of college tuition, nothing seems to be rising in cost as fast as medical care. parkland-hospital

The headline in the Dallas Morning News: DALLAS HOSPITALS PRICEY is telling. Writer Jim Landers reports that Dallas has some of the most expensive hospitals in the nation.

An example is hip replacement.

The cheapest is in Youngstown, Ohio at $19-thousand dollars. In Dallas, it will cost you $41-thousand. Of course, hospitals charge a lot more than they get due to the vagaries of our insurance system. But the driver of these high prices, according to the Institute of Medicine, is the strong market power of hospital chains. Translation: The bigger the chain, the more it can get away with charging. This is why healthcare systems are merging.

If your hospital is controlled out of Dallas, you might be seeing higher costs.

If it’s NOT, you’re likely seeing higher costs. Landers’ article does not go into the intricacies of Obamacare, but that, too, is a driver. Government interference in what should be a private industry creates new regulations and mandates. That means accountants and attorneys to ensure compliance. Compliance costs a lot of money and that is transferred to healthcare consumers. So is the cost of indigent care.

Then, there is insurance.

According to Landers, hospitals and specialists charge much more for services than they get paid. It’s an interesting game that hospitals play – and it’s because of insurance and how reimbursement works. The hospital has to charge a lot more than it expects to get so that when the insurance company negotiates, the hospital still receives what it should have charged in the first place. This means that if you pay cash for your surgery, you are probably nailed with that higher cost. That’s outrageous – but that’s the system, and Obama has exacerbated it.

In any case, more than 90 percent of the difference in healthcare costs are due to hospital charges. Hospitals now tack on extras like “facility charges” to pad a bill. Often, they will drop those charges, but you have to demand it – and you have to get to a decision maker. The larger the hospital, the harder that becomes. Sometimes, your only recourse is to refuse to pay it. A hospital must see that you are serious about challenging their fees before they will work with you. They prefer that you pay out a large bill over time rather than give you a break for quick payment so that they have receivables on their books.

What is a “charge master?”

A charge master is the initial price the hospital comes up with. For example, the average price for that hip replacement in Dallas County is $63,000 – but few people end up paying that much. The final payment is what you actually spend. Steve Love, president of the Dallas-Fort Worth Hospital council wants you to know that. He says these new hospital statistics are confusing.

Mr. Love, with all due respect, the confusion is not caused by healthcare consumers. It is caused by all the games you play with insurance companies, and by government meddling. When someone enters a hamburger restaurant, he knows what a basic burger costs. If he wants double meat, or cheese, or a side dish, the costs are clearly marked.

Try finding out what your surgery will cost.

You’ll likely have better luck online than by calling your hospital. If you are about to have a hernia repaired, you can do a web search for average prices in your area. But if you call the hospital, you may get the runaround. However, before you go to surgery, you may be asked how you intend to take care of the costs. That’s fair. A hospital performs a service and it should get paid.

The continuing mergers of hospital chains means they will get paid a lot more.

Remember that a lot of hospitals and insurance companies got behind Obamacare to prevent being left behind. They wanted 30-million new customers and they wanted a seat at the table. They all got that seat, but the average healthcare consumer did not. The continuing trend of government regulations, the new taxes embedded inside Obamacare, and the mergers will keep costs going up. Enjoy your next operation! You will pay dearly for it.

lynn@BeLogical.com

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