When a Catholic hospital chain purchases an independent hospital, it tells its newly acquired hospital to stop providing abortions. Swedish Medical Center in Seattle had been performing elective abortions for years before it was purchased by Catholic Providence Health in 2011.
60
Why does it come a surprise to anyone that as competition decreases prices increase? What is the real surprise is that the regulatory agencies believed this nonsense.
45
One of the key memes among a lot of health reform wonks at least 5 decades back was that independent physicians were the problem and must be broken and brought to heel, cut out of any ownership position, and controlled as salaries employees of institutions that they do not own. Pete “ Congress can do anything it wants” Stark was the key action man.
The second part common beliefs among experts was that after breaking medicine as an independent self regulating profession, teaching physicians to take orders and do as they are told, the number of institutions needed to be reduced so that regulators would have fewer entities to deal with in imposing centralized government control.
They got what they wanted but the result they expected. Medicine was broken and is no longer a profession. This was proven when the Electronic Medical Record was forced on them against their will. A profession sets and controls its own work conditions. The conglomerates were created and the doctors sucked up into them. What happened next, the massive powerful conglomerates overwhelming any effort by regulators to use them as agents of control but rather becoming the master was entirely predictable. It is what has happened in other indusries and had they read Milton Friedman or just been a bit more humble they would have expected it.
Unfortunately there is much more lost here than money due to predatory pricing.
30
Two areas not mentioned in the article:
1) Decreased wages for staff. In the Albany NY area the hospitals that joined Trinity Health were found guilty of collusion over pay rates for RN's several years ago. Now they will have the “management skills” to do the same thing, and get away with it. A private practice that joined the mega-group is now offering starting wages 35% - 40% lower than they did six years ago.
2) Pressure on physicians to refer within the system. Each month MDs receive a “report card” that measures the “leakage” ie services ordered by the MD that are done by a non-affiliated provider. If a patient chooses to have a CT/MRI, or a cardiac consultation, done at an independent facility, the staff in the physicians office must document why the service was not directed to an affiliated provider.
61
Family doc here, 29 years in the game. I remember not too many years ago we heard the business blather that consolidation among hospital groups would improve efficiency and lower overall costs. A single medical record at our fingertips, better care as people can specialize more, and so on.
We all new it was absurd at the time, but, apparently. the government regulators did not.
Sure, there are some efficiencies to be gained (not in electronic medical records, which have been a total disaster), but its tendencies to lower costs has been swamped by the monopoly power gained by the health systems, power which of course raises costs to patients.
I shook my head and smiled at the lunacy of it all. We all shook our heads and smiled.
How is the cost of getting your colonoscopy at the hospital instead of at the freestanding surgical center working out for you?
Same analysis goes for pharma consolidation, health insurance company consolidation, medical groups consolidating, cable companies, retailers, you name it.
Monopoly bad, very bad.
66
The new research confirms growing skepticism among consumer health groups and lawmakers about the enormous clout of the hospital groups.
"Growing" skepticism? Who on earth contracts these people, and, more to the point, how much do they pay these 'researchers' to tell us what we've already known for- what- nearly ten years now about the rash of hospitals mergers, swallowing up any and every thing they think they can pay a penny on the dollar for, up to and including once well-run independent physician clinics, now simply turned into money mills run by 500K salaried MBA administrators and no longer accepting walk ins or people who don't have 'right' insurance.
Where has everybody been, purposely asleep at the wheel? or just enjoying the ride until it all goes bankrupt.
Our government used to (remember?) regulate these hospital corporations and they used to (remember?) do it very well. Until the early- mid 1990's.
Now? This is what Americans voted for in their politicians. Free-market health care. This is how it works. Don't like it? Too darned bad. Get used to it.
26
This problem would be completely solved by"Medicare for all" or some variant of single payer health care. The government would tell hospitals what it would pay, and after some negotiation, the hospitals would learn to live within the limits imposed.
One reason that rates are so high is that Medicare pays hospitals less than private insurance does (usually about 10%), and hospitals make it up on charges they negotiate with private insurance companies for patients with insurance. Woe to those who are self-pay, because they pay the most - rates that are higher than the negotiated rates that insurance companies pay for their insured.
19
@Charley Darwin
Medicare for all is better than the current system but it will do little to restrain physician fees in part because AMA physicians comprise the Medicare committee that sets Medicare prices. Here is a some info supporting my assertion from the Times itself. It is very informative. It even gives the old formula, althiough I think it has been tweaked in the meantime. https://economix.blogs.nytimes.com/2010/12/10/the-little-known-decision-makers-for-medicare-physicans-fees/
5
This is news? Anyone who's followed the career of Rick Scott has known this for a long time.
40
Shocking. Hospitals are merging so that their monopoly power can raise prices? Who knew?
47
US politics lacks weapons against exploitive monopolies as a norm.
In America, citizens can be stranded without a hospital. They can also lack a place to vote within many miles and no transportation.
Monopolies lead to America's 1st priority---profit. It's shared with our lawmakers, since monopolies also fund our politicians' run for office.
The US has the most expensive and profitable health care system in the world--- with big donations to elections.
Our elections are also the world's most expensive, and profitable for the big donors, who call the shots on policy.
Our media has become monopolized too. News must be profitable now. Fox News was allowed to expand into a huge monopoly across the nation after Gop/Dem Clinton repealed long standing anti monopoly laws for media in the 1990s.
Can some journalist compare to other countries where their health care for the benefit of their citizens is a norm, instead of profits?
Same with elections financed more with public funds.
And crucially, the TV pharma ads direct to consumer that flood our media are actually banned in many countries.
Also banned are the privately funded campaign ads that flood our media and manipulate US voters.
Huge ripple effects. Why isn't this publicized here?
8
As with any monopolies or oligopolies..
7
The dirty secret of it all is that the big profitable systems raised prices, but Medicaid and Obamacare patients are out of network, so they have substantially less cost shifting.
5
In Arroyo Grande, CA,
Catholic Health Care giant, Dignity Health owns all the nearest three Hospitals, and in addition has purchased the local walk-in clinics, the local surgery and various radiology centers and to make sure it's not missing out on the results, also acquired the local mortuary and provides its hospice service.
Needless to say, costs at all have suddenly rocketed. And massive building expansion is taking place, with new multiple subsidiary institutions being created focusing solely on various costly specialized chronic diseases that have costly, life long treatment systems for such as cancer, cardiac and pulmonary issues
20
Not to mention secular institutions merging with Catholic systems are forced to cut back women’s care to that supported by the Catholic Church.
And that employees are often negatively impacted, as is happening in the merger I’m caught in now. Hundreds of layoffs. So they charge patients more for less care.
36
You learn the answer to the question, “Why are mergers allowed?”, by looking at the acquired units. Most are failing hospitals. State authorities either allow the merger, let the facility collapse or create subsidies that will likely never end. The acquiring group will get the patients, one way or the other. If the state starts complaining, the acquirer simply backs away until the state authorities come back to reality.
I notice the focus here is on Connecticut and California, two states that have Medicaid expansion. The NY Times hypothesized connection of no Medicaid expansion to closing and merged hospitals is now even weaker. Forces driving closures and mergers predate the Affordable Care Act. Hospitals are capital intensive businesses with each new technology exacerbating the capital intensity. Cash flow deficiencies quickly appear if you do not keep your beds filled just as in a steel mill where production volumes drop. You can complain that healthcare is not a business, but that attitude will not keep accounts in the black.
7
It is pointless to discuss cost divorced from health outcomes or quality.
Monopolies charge more could have sufficed instead of such a long article.
7
Really, the NY Times just discovered this?
In NYC the health care market has consolidated with 3 behemoths; Mt. Sinai in Manhattan (controls hospitals like St. Lukes, Roosevelt, Beth Israel), Montefiore in the Bronx/ Westchester (controls Weiler, St. Barnabas, Wakefield, New Rochelle) and Northwell in Long Island/Queens (controls too many hospitals to count), taking over an enormous portion of the overall market. Patients and staff have consistently lost out in the process.
This has been evolving for many years.
Where have you been?
32
It doesn't matter who's doing the gouging. All I know is that Americans pay billions for healthcare and we're no more healthy than any other industrialized country. So where is all the money going? To line the pockets of all the healthcare executives. Shame on commoditizing what should be a basic right.
15
@Jennifer i seem to hear this phrase quite often lately: healthcare is "a basic [human] right."
what does this mean, exactly? as long as healthcare -- whether in the form of drug prices, hospital stays or medical exams/procedures -- is provided by human, financial and intellectual capital which are scarce resources, i don't understand how this could be a basic right. and this is without introducing the moral hazard issue, which complexifies the situation even further.
7
Regardless of what the merging parties say about streamlining care and greater efficiencies, when healthcare entities merge, costs only go one way: up, way up. Ask those trying to convince you of the benefits to point to one study that shows costs go down after a merger, or that quality goes up. They can’t.The only parties who benefit when healthcare entities merge are the executives at the top. As I wrote recently in Medical Economics, http://www.medicaleconomics.com/health-law-and-policy/dont-drink-healthcare-consolidation-kool-aid, as long as special interests pour millions into lawmakers' pockets, educated consumers and brave doctors who resist selling out are our best hope. That is what we at the Association of Independent Doctors are fighting for. www.aid-us.org.
Marni Jameson Carey, executive director, AID
20
I rarely, if ever have any complaints about articles or published pictures in the print edition of the NYT which we have delivered 7 days a week for to many years to count.
I do however, take exception to the lead picture in your article by Reed Abelson and taken by Christopher Capozziello. Wether staged for this article or a real OR case, anyone sitting at what appears to be an active anesthesia consol would in this case have a mask on. The uneducated individual looking at this picture would wonder if this technician, CRNA, Dr or other was properly attired in performing her duties.
I think this picture while trying to make a point is misleading and to me as a consumer and someone who spent years in hospital operating rooms - frankly offensive and should be explained in a subsequent article.
3
This is the nature of the beast. Someone has to pay for these mergers and always it's the consumer, not the share holders. It's not just with hospitals, more notorious are the telecoms, (cable companies, phone companies). Comcast and Charter are prime examples. Yet, these mergers for the sake of saving a dime or two, continue on with blessings from all gov't agencies. More proof that corporations own the U.S. government. It's not a government for the people, by the people, instead it's a government for profit , run by profit seeking individuals at the expense of everybody else. Want change? Change the structure of the government and the people who are elected to run it. So far, the democratic socialists are mistakenly looked upon as the bad guys and the
"Real" bad guys are getting elected, re-elected and praised. "Garbage in; garbage out"- George Carlin.
10
“The puzzling part for many of us in the state is why anyone would allow these oligopolies to form,”
Really?
How about, "because the regulators work for the big companies, the big money, not for the people."
There, that wasn't so hard.
43
My doctor recently sold(merged) his practice to NYU-Winthrop. Starting next year the ONLY insurance accepted will be employer sponsored plans. All individual policies (A.C.A.) available on the NY exchanges will NOT be accepted.
18
@Steve
Sounds like doctors who are now not accepting Medicare, especially Medicare Advantage. Many hospitals and doctor's offices do not accept Medicare Advantage.
3
We always hear that Kaiser does it right or as right as possible within this country's chaotic non-system. Having helped a California friend during her bout with cancer, I saw that she got excellent and well coordinated care at Kaiser in the Bay Area. Why isn't their model replicated elsewhere and especially here in the equally populated northeast?
12
@jerseyjazz
Your question is excellent. The Kaiser model, if properly executed, should work everywhere.
Kaiser is successful because they are vertically integrated - they own the hospitals AND have a contract with Permanente Medical Group (which employs the doctors) that is exclusive in both directions, so they effectively control the doctors.
As I understand it, Kaiser tried to succeed in the Northeast (Baltimore) but without owning the hospitals they couldn't generate the efficiencies of vertical integration.
4
Which is exactly why the model doesn’t work everywhere. Kaiser is an integrated provider, meaning they are both the insurer and the hospital/outpatient provider. You have to have sufficient infrastructure to do that. It is a model that works well, but there is a reason you only see integrates systems in pockets across the country.
1
@jerseyjazz
Kaiser has done it right; but realize they are successful because of their narrow group of insured enrollees - the employed, governmental, or educators. They don't do Medicaid, uninsured, etc. - the lowest-paying, which forces most other hospital systems (and their medical providers) to negotiate higher rates. Systems of hospital/physicians, or even small, still independent physicians, must "manage the payor mix", that means negotiate for higher rates with insurance companies, so you can afford to also care for the less-well-, or un-insured.
4
Anyone who believes that nonprofit status somehow removes the profit motive should look again. More than half a century ago, most hospitals were considered community enterprises with altruistic motives and goals. They were there to "serve" the community and had boards made up of local citizenry acting towards such ends. A lot has changed.
The goal of our contemporary health care corporations is to make money-- as much money as possible. Delivery of health care is the incidental means to this end.
Capitalism and health care actually don't mix very well. Who knows whether health care is a "right? But it is a need. And too important to be at the mercy of profit driven enterprises.
33
Hospital mergers are effected primarily because greater size leads to (1) greater leverage in pricing/negotiated rates and (2) greater power in the community and political bodies to preserve and protect the status quo. Period. The publicly claimed benefits of greater efficiency (lower prices) and better quality for the community are a chimera. Community benefit and benefits for individual patients have never been anywhere near the top of the "real" list of objectives.
Most of the mergers involve (tax exempt) community-based nonprofits (religious and secular) who have no shareholders, save the communities which they serve. Yet rarely do those communities see benefits nor are they even prioritized. The evidence is clear, yet the mergers continue without accountability or consequences.
10
I am glad the article points out the huge increases in health care are not due only to problems with lack of competition in pharmaceuticals. It would be even a better piece if it mentioned the lack of competition among many healthcare providers, such as extraordinary barriers to entry for physicians, and how this inflates costs. All of this is basic health care economics. Sadly, our elected officials all too often use economics the way a drunk uses a light post, not for light, but for support. The great vampire squid that is health care cannot be corralled as the ACA would have us believe, nor can it be reasoned with one tentacle at a time. We need single payer, universal insurance and the sooner the better. And not Medicare for all, since Medicare allows a committee of representatives from the AMA to set fees.
4
@Keitr
The deal worked by the AMA for their support of Obamacare is that the number of residencies financed by the federal government would not be increased, despite the demographic shift underway with baby boomer physicians retiring in large numbers. Mo money.
Single payer is no solution.
1
@ebmem
"The deal worked by the AMA for their support of Obamacare is that the number of residencies financed by the federal government would not be increased..."
The number of residency slots has increased every year for the last 16 years. The number of residencies that Medicare would fund was capped back in 1998, which was long before the ACA so that has nothing to with Obamacare.
10
@Keitr
The government sets the fees for Medicare. Not the AMA.
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/
6
Beyond the fact that having a for-profit healthcare system incentivizes all the wrong behaviors. Why do antitrust agencies continue to believe the lie, "that consolidation benefits consumers with cheaper prices from coordinated services and other savings.". This has never been the case. This is literally Econ101!
Think beyond Healthcare, has the mega mergers of Airlines reduced prices? Most people have one, or if they are lucky, two choices for a cable/internet provider. How do those prices look? I could go on and on...but in a capitalist system competition reduces prices and increases innovation.
36
@Jeffrey
Those huge consolidated health systems are non-profit, so they can avoid property and income taxes. And yet their fees are rarely lower than their for-profit competitors.
8
Check out the salaries of top executives in these mega hospitals. Base can be 10 million with unpublicized perks and other arrangements.
The justification for a free market system is it fosters competition. This is conceptually impossible for surgical emergencies or even long term care. Of course we are experiencing revolutionary new procedures and treatments, yet there are webs of physician's groups that have their own contractual relationships with these mega-hospitals.
Recent articles have described the deficiencies in computer based record keeping, that now takes a quarter of a physicians time that had been doctor patient interactions.
We many all live longer, but what kind of a life will it be. Medical care doesn't meet the criteria for the free market, something that Ian Rand and Karl Marx might agree on.
13
keep in mind a crucial distinction -- almost all hospitals are non-profits and they are fighting to survive, not making lots of money; conversely most insurance companies are for profit and will do whatever they can to increase their income. the culprits are the insurance companies who do nothing but push papers and generate income, not the hospitals who provide the actual medical care and whose goal is to break even, not please their shareholders.
4
@poins Wrong. They ARE making lots of money. They just plow it back into their operations by spending on things like, oh, elevators of cherrywood paneling and marble flooring, two large TV sets in every patient room, landscaping, grandiose atria, ad time during the Super Bowl, naming rights to baseball stadiums, parks and entrances to concert venues, etc. All while cutting employee benefits and laying off hospital nursing staff for "cost reduction." Yeah, right.
69
@MidwesternReader
You forgot large salaries for the executives — after all they brought in the money.
13
@poins
Non profit insurers charge the same premiums as for profit insurers.
The mega hospital systems are almost exclusively non-profit, but do not charge lower fees than for-profit hospitals, despite being exempt from income and property taxes. And Medicaid and Obamacare patients are out of net work, so its not as if they have much in the way of cost shifting to do.
Hospitals have group purchasing organizations that negotiate huge discounts on drugs and operating supplies, but those savings are not passed along to the consumers or government payors.
The favored hospitals are making big money and paying big executive salaries.
Hospitals, drug companies, insurance companies are all taking an extra slice of revenue that the taxpayer and consumers are contributing.
Obama knew he way lying when he said the average household would pay $2,500 less per year if everyone were insured. Instead, their premiums increased 50% and their deductibles increased fourfold.
Find out the non-profit that owns your nearest hospital and then look up the salaries being paid to the executives. It will make your head spin.
9
As someone who has been involved in numerous mergers and acquisitions over the last 30 years, I can tell you without hesitation that I have never seen one where a goal has been to lower prices to consumers. The most common rationale is market share, funded by cost reduction
86
Nothing will change as long as profit is the motive. There are groups doing it right. Kaiser has maintained high quality and contained costs for decades. Doctors are salaried. There is no incentive tied to their utilization. They are one of several non- profits. That means no layers and layers of administrative costs , monstrous CEO salaries, or decisions made solely on the basis of shareholder concerns. Kaiser is not included because they are a non profit but based on gross revenue they would be # 37 in the list of Fortune 500 companies. ahead of Johnson and Johnson.
The point is not to laud Kaiser it’s to point out that some groups including geisinger, Mayo, and kaiser are doing it right. Unfortunately, no one in government knows what they are doing or bothers to listen. For example, Tom Price, was only interested in one thing. Pumping up reimbursement for private practice.
No one out there who controls money is really looking out for you. As much as many love to hate google and amazon, that’s likely where the health cost solution will be found. Not in private practice reimbursement schemes which is the bulk of the justification for hospital mergers; not total care.
23
@Intrepid
Kaiser Permanente is a huge conglomerate of for-profit and non-profit entities. Hospitals, medical practices, imaging centers, insurance companies. They are reputed to provide high quality care, but it is more expensive than other systems and Medicaid an Obamacare patients are out-of-network for their centers of excellence, even if they live a mile away. Their sister organization, the Kaiser Foundation, is their lobbying arm, and had a hand in designing the regulations to the benefit of their buddies.
Mayo, the Cleveland Clinic, Kaiser are all out-of-network for Medicaid and Obamacare. Despite not providing unreimbursed or under reimbursed care, they still raised prices.
You have not looked up the executive salaries for any of the "non-profits" you seem to think are operated as charities with no thought of profit. You have no clue as to what incentives are paid to doctors to send patients to Kaiser owned labs and imaging centers instead of referring them to outsiders who are less expensive.
A Kaiser press release is not reality.
9
@ebmem
You are wrong on one count....a Kaiser plan is available to me on the state Obamacare exchange here in the Bay Area of California. The premiums, however, are about the same as for the two "non-profit" insurers also available.
5
Healthcare industrial complex hospitals are not about healthcare anymore but big business monopolies. CEO's and administrators rake in huge pay and bonuses which patients are expected to pay for.
48
An exceedingly late piece, but true nonetheless. Another critical factor that isn't mentioned in the article is that hospital consolidation is used by insurers as an argument for mergers of insurance providers, making sure that customers must deal with monopolies along the entire chain of healthcare services. Ditto for the consolidation across pharmacy benefit providers and the dwindling options for pharmacy chains. Why antitrust has turned a blind eye to all of this needs deeper investigation.
34
I suspect people would generally be better served if the concept of "percentage" were used as little as possible when it comes to the matter of human life.
0% of preventable deaths is only actually zero if there is nothing beyond the 'Dedekind cut'; which there always is.
Mergers, akin to monopolies in certain regions, do take away the healthy competition to attract customers by virtue of it's quality and price. unless there is a superlative reason, they ought not be allowed to occur. Remember the Banks too big to fail?And taxpayers left holding the bag. Profit motive is understandable, but gpoging the public in the name of greed? This seems particularly odious when it concerns health care, a necessity we all will come down with, if not today then tomorrow.
5
@manfred marcus
Democrats passed legislation to address the too-big-to-fail bank system. Almost a decade later, we have fewer tbtf banks but the remaining ones are even bigger, which concentrated the risk. You can't make this stuff up.
5
As long as the US has for profit health care, the costs will continue to rise. The profit is not in cures - the profit is in treatment and procedures. If some one is cured they are no longer a customer. The US needs "Socialized Medicine" just like all the other enlightened and developed nations.
89
@DILLON
" .. The US needs "Socialized Medicine" just like all the other enlightened and developed nations .."
You want poor quality and giant financial problems?
https://www.nytimes.com/2018/01/03/world/europe/uk-national-health-service.html
Be my guest. Most will not buy into poor quality.
The problem is that there is not universal list of procedure and medication charges, allowing monopolies and profiteering.
Healthcare should not be for-profit, period.
53
There should be two tracks for health care
- one for all Americans
- additional private insurance for those who want/can afford it
This is the way almost every other first world country manages health care
10
@Kai
" .. Healthcare should not be for-profit, period."
When the longest U.S. Senate advocate for "single payer," who self-identifies as a "democratic socialist" has a $600,000 summer house -- most figure he's got a pretty good "for-profit" schema.
https://www.npr.org/2016/08/12/489787309/the-internet-can-turn-quickly-even-on-bernie-sanders
“The nation’s hospitals have been merging at a rapid pace for a decade, forming powerful organizations that influence nearly every health care decision consumers make.
The hospitals have argued that consolidation benefits consumers with cheaper prices from coordinated services and other savings.
But an analysis conducted for The New York Times shows the opposite to be true in many cases. The mergers have essentially banished competition and raised prices for hospital admissions in most cases, according to an examination of 25 metropolitan areas with the highest rate of consolidation from 2010 through 2013, a peak period for mergers.”
Well, no, it’s more like 20+ years and the problems listed here were obvious to anyone who cared to look by the year 2000.
So yet again, the NY Times has had its head in the sand regards medical care in the USA for a long time.
Better later than not at all I guess.
9
@Yaj
The consolidation accelerated in anticipation of Obamacare, which was specifically structured to enhance the profitability of "charitable" hospitals like the one that paid Michelle Obama $350,000 for a part time job. For the same job, her pay doubled from $175,000 as the wife of an Illinois legislator. They did not find it necessary to replace her when she moved to DC. But it is easy to understand her complaint that FLOTUS was not a paid position
2
@ebmem:
"The consolidation accelerated in anticipation of Obamacare, "
No, it didn't. It's a 25 year continuing trend. You have no idea of what you're writing.
"For the same job, her pay doubled from $175,000 as the wife of an Illinois legislator. They did not find it necessary to replace her when she moved to DC."
Overpaid hospital administrators who have little to do with care have become common in the last 35 years.
You really know nothing of the rise of for profit hospitals, and for profit insurance.
You're blathering anti-Obama conspiracies.
The ACA (or if you like ObamaCare) is RomneyCare from Massachusetts. Both designed to preserve profits and to raise deductibles thereby cutting down on use.
Please post more, you've added so much.
3
Is this really a surprise? Anytime there are mergers in any type of business, competition is reduced and prices rise.
39
The next wave of greed in the health care market is monopolism by hospitals. The health care industry players will continue to extract as much money as they can from the U.S economy until they kill the proverbial "goose that lays the golden eggs." At that point the only solution remaining will be a two-tiered system: one for the very wealthy that can pay exorbitant insurance rates and out-of-pocket expenses and a government run system for everyone else.
11
Why is this not obvious. Monopolies in business through mergers are reviewed by the FTC for reducing competition. Cell phone companies merge, tell you better pricing and services is the intended target, but I never see that - same service, fewer store fronts for service, merged operations, fewer employees due to reduced redundancies. Why do people believe that hospitals will reduce pricing through mergers - just through the excuse of increasing volume leads to pricing efficiencies and discounts? I even doubt the hospital chains in many cases should claim to be non-profit status.
I am in health care and everywhere I have been, mergers happened and patients then had fewer choices and the larger hospital system had more clout to influence insurers and vendors for better pricing, but it never never lead to patients paying less.
My institution negotiates with new vendors to get better deals for hospital supplies, etc - but the per unit pricing doesn't seem to go down. Maybe at some institutional level their are discounts or rebates later applied.
Wake up, these hospitals have administration looking to hedge against government regulations increasing costs. At some point, these hospitals need to pay back, but that day is not now.
18
@David
Follow the money on group purchasing organizations, which control 85% of hospital spending.
Remember the shortage of saline solution bags after the Puerto Rican devastation. One of the few manufacturing locations was brought down by the storm. They were getting $0.25 or less per bag from the group purchasing organizations. No telling what they were "selling" them to the hospitals for, but they show up on the patient billing at $75. Doubtless, the big boy hospitals get a 75% discount from list price and the smaller hospitals get a 5% discount, with rebates flowing through the entities as performance bonuses.
"The hospitals have argued that consolidation benefits consumers with cheaper prices from coordinated services and other savings."
Like everything else in America. First come the lies, then come the profits, then comes the decline in service.
107
@george eliot
Consolidation was also promoted by a generation of health reformers with the idea that one could force all the doctors and other providers into the arms of a few conglomerate which would then be more easily controlled by regulators. It was a key idea underlying Hillary Clinton’s 1990’s health reform plan and has remained an aim of much Heath reform action. I am just saying that the impetus for this has not only been from the industry but from reform policy wonks as well.
2
Healthcare costs continue to go up; we have all seen that happen with our own health plans. It will be interesting to see when and if this issue gets solved. Will a single payer system put things in check, will increased healthcare coverage reign in costs, or will health insurance costs continue to take up a greater percentage of peoples incomes?
It's a little bit scary to speculate what will happen, but right now it does not seem like the endpoint will be good for rank and file healthcare consumers.
2