I blog about free markets in medical care and transparent pricing.
Check this out. $182,000 for an appendectomy in California. Someone told me the other day that having received a bill for $20,000 for their hernia surgery, also done in California, they were going to use our online pricing to leverage a better deal. What is going on in California? The same thing that’s going on everywhere. That the authors of the study never mention the uncompensated care scam or the crime of PPO repricing is telling, I think. The hospital that charged $182,000 for an appendectomy will receive very little of this bill from the insurance company. They will receive quite a bit of it from the taxpayers after they claim that they “lost” that amount they didn’t collect and factor that in to their uncompensated care claim to the feds. The insurance company will claim to the employer who sponsors this insurance plan that they “saved” them, let’s say, $150,000 (assuming they only pay the hospital $32,000!), and will charge the employer a fee for this “savings, ” a percentage of $150,000.
The authors of the study linked to above say that the price for services depends on whether a facility is for profit, not for profit or a teaching facility. On this point, they are correct. The not-for-profits are almost always the most expensive, as they need incredibly large and fictitious write-downs to conceal all the money they are making.
But the authors of the study are incredibly wrong about the most important thing. They suggest that health facilities “get together” and come to a consensus about the price for various services. What part of anti-trust do these people not understand? Why can’t they let this cartel-lust go? What is wrong with letting the market determine prices the way it does for everything else?
Our prices are causing a deflationary price war here locally and there is evidence that this effect has spread outside of our area, particularly if folks in California are using our website fees to leverage better prices. This price transparency will bring prices down. The free market will determine the market clearing price for health services as it does for everything else. Those who advocate (as the authors of the above study) “cooperation” amongst health facilities will get more of the price fixing, cartel-like insanity that produces $182,000 appendectomy bills.
G. Keith Smith, M.D.