I blog about free markets in medical care and transparent pricing.
Our price for a cochlear implant procedure is $8800. This price includes the facility, the surgeon and the anesthesia charges but does not include the price of the implant. I pay about $27000 for the implant. We’ll come back to this shortly.
A surgeon recently told me about a meeting where he was informed by a “not show a profit” hospital administrator that while the hospital was showing a “massive” loss on the Medicaid cochlear implants they were doing, the hospital would continue to allow these cases to be done as charity. The hospital, able to purchase the same implant for $23,000, collects $29,000 from Medicaid as payment. This $6000 was simply not enough to cover their overhead and they were suffering a “massive” loss.
Do you see it? Remember that our charge includes the surgeon, facility and anesthesia. If you add the anesthesia and surgeon charges to the hospital’s $6000 profit, you arrive at about $8800. This simply means that the price I selected (and without knowing any of the above!) for a cochlear implantation at our facility is equal to the Medicaid reimbursement. This is a number we are happy with and one we find comfortably profitable.
I thought this would help those of you out there blaming the greedy doctors, particularly those who own their own facilities, for the high price of health care.
G. Keith Smith, M.D.