The case for market concentration driving higher health care prices, which could be predicted by virtually any economist, is being proven over and over. It happens in the UK. It happens in the US.
A story in Modern Healthcare.com sets forth the latest study, by the Center for Studying Health System Change, documenting the phenomenon. The lede:
Bargaining leverage, not the cost of providing complex care, is the main reason why some hospitals can demand prices twice as high as their competitors' and still get contracts to treat privately insured patients, according to a new study.
The analysis by the Center for Studying Health System Change of actual payments to hospitals and physicians by private insurers in 13 U.S. cities found that the most expensive hospitals got rates as much as 60% more than the lowest-priced competitor for inpatient care, and prices that were double the competition for outpatient care.
And here's a familiar argument (one that our friends at Partners Healthcare habitually made about the Eastern Massachusetts market):
Expensive hospitals have long argued that providing medical education and the best equipment available drives their costs. But the study authors cast doubt on that because their research was based on how much each hospital's rates exceeded Medicare payments for the same services. Since Medicare rates are adjusted to reflect patient case-mix complexity and the cost of capital equipment, those factors shouldn't explain why some hospitals get more than others relative to Medicare's rates.
A story in Modern Healthcare.com sets forth the latest study, by the Center for Studying Health System Change, documenting the phenomenon. The lede:
Bargaining leverage, not the cost of providing complex care, is the main reason why some hospitals can demand prices twice as high as their competitors' and still get contracts to treat privately insured patients, according to a new study.
The analysis by the Center for Studying Health System Change of actual payments to hospitals and physicians by private insurers in 13 U.S. cities found that the most expensive hospitals got rates as much as 60% more than the lowest-priced competitor for inpatient care, and prices that were double the competition for outpatient care.
And here's a familiar argument (one that our friends at Partners Healthcare habitually made about the Eastern Massachusetts market):
Expensive hospitals have long argued that providing medical education and the best equipment available drives their costs. But the study authors cast doubt on that because their research was based on how much each hospital's rates exceeded Medicare payments for the same services. Since Medicare rates are adjusted to reflect patient case-mix complexity and the cost of capital equipment, those factors shouldn't explain why some hospitals get more than others relative to Medicare's rates.
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