A More Rational Approach To Hospital Pricing
This past summer I went to the emergency room with a strong stomach pain. I was there for 14 hours transfered to another hospital and essentially never got seen. During triage they took a blood sample, and the results of the test were refused to my primary care doctor. Luckily, my father came by and took me to a nearby city and the next day I received some heath care. Interestingly, enough 3 months later I received a bill in the mail for 500 dollars. I couldn’t help but feel angry to receive a bill for $500 dollars for a 2 minute blood test the results of which I haven’t yet seen.
Here’s an article on hospital prices. If your interested in this topic also check out the book called the Everything For Sale. It’s a wonderful book on extra market sectors and their inefficient pricing mechanisms.
Click Here To Read About Rational Approaches To Hospital Prices
Article Introduction (Economix & NYT)
In last week’s post I described our nation’s chaotic system of pricing hospital services, a system that the Brookings economist Henry J. Aaron has aptly described as “an administrative monstrosity, a truly bizarre mélange of thousands of payers with payment systems that differ for no socially beneficial reason.”
In this week’s post I would like to suggest a constructive alternative to this “monstrosity.”
Health reformers around the globe have long dreamed of a health care system in which one lump sum is paid for the entire treatment of a given medical condition. That treatment would be clinically integrated across the entire spectrum of goods and services used in it and be based on best, evidence-based clinical practices.
Notable Article Excerpts (Economix @ NYT)
“In a nutshell, my proposal calls for applying to all patients the payment method developed by Medicare during the 1960s and 1970s and mandated upon all American hospitals by the Reagan administration in 1983. This approach has been so successful that in the meantime it has been adopted by other industrial countries as well — notably by Australia, France and Germany.”
“First, the government could simply set the monetary conversion factor. Medicare uses that approach, although a number of adjustments are made to account for regional differences in hospital input prices (especially wages) and the type of patients hospitals treat (case mix).”
“To eliminate the rampant price-discrimination inherent in current hospital pricing, all hospitals under this system would be required to charge all patients the same price for a given D.R.G. Ideally, this stricture should apply even to patients covered by Medicare or Medicaid, as is done in the “all payer” system that has long been operating in Maryland and seems to have worked well there.”
Click Here To Read About Rational Approaches To Hospital Prices
