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I suspect a lot of this is caused indirectly by the government.
Because of tax laws, a large number of people don't directly pay for their medical expenses, but instead get tax free medical insurance from their employeer. While it may be called "free medical insurance", it is neither "free" nor "insurance". While it is billed as "insurance" it is effectively prepaid medical expenses. And it certainly isn't free. A reasonable health plan often costs the employer $1,000 or more a month, which means the employee ends up getting a smaller pay check. Editorial: Hospital sticker shock May 18, 2013 Most people entering the hospital can't get a straight answer to an obvious question: How much will this procedure or treatment cost? Nor can people easily compare prices among hospitals in their area. Now that is changing. The federal Centers for Medicare and Medicaid recently released 2011 list prices for procedures at more than 3,300 hospitals, including 126 in Illinois. Result: An astonishingly wide spectrum of prices for the same procedures such as stent insertions, joint replacements or asthma treatments at hospitals just miles apart: Charges for implanting a permanent pacemaker at Centegra Hospital in McHenry: $36,000. At Vista Medical Center East in Waukegan — less than 30 miles away — the charge is more than $165,000 for the same procedure. John H. Stroger Jr. Hospital of Cook County charged $7,674 to treat a simple case of pneumonia. Loyola Gottlieb Memorial Hospital in Melrose Park kicked out a bill more than four times that amount, just over $32,000. Hospitals point out that most patients don't pay full list prices, which are akin to automobile sticker prices. Instead, insurance companies negotiate lower prices with hospitals. Medicare and Medicaid pay hospitals a set rate for treating specific conditions, usually at a deep discount from list prices. So is all this information irrelevant? Not at all. The uninsured can still be billed full-boat prices. Underinsured people might also find themselves on the hook for massively inflated charges, even though most hospitals offer charity care or other assistance to those who cannot pay. Bigger picture: Consumers need this kind of information to make better choices about hospitals and health care. Economists say that the health care cost growth rate leveled off at 3.9 percent a year from 2009 to 2011, the lowest annual pace in five decades. Why? Yes, people who lost wages in the recession had less money to spend on health care. But two major studies say there's more to it than that—there's mounting evidence that many people are spending less because companies are requiring insured employees to dig deeper into their pockets for higher co-pays and deductibles. That encourages people to make health care choices just like other pocketbook decisions, by seeking the best value for their money. The more information about doctor and hospital prices and quality of care, the better the choice. No, people won't visit or shun a hospital only because of its price list. But the pressure is on hospitals. They need to explain to potential patients why they're charging double or triple for the same procedure as the hospital down the street. The massive health care overhaul known as Obamacare sets in next year. More people will be covered by health insurance and that likely means more hospital visits. Hospitals can expect more scrutiny on how they set their prices ... and on the quality of care they deliver. Medicare now posts hospital readmission rates and other quality measures on its Hospital Compare website at hospitalcompare.hhs.gov. And don't forget, Illinois has an extensive hospital report card that helps consumers gauge quality of care: healthcarereportcard.illinois.gov has been online since 2009. All of this means hospitals will have to compete even harder, on price and quality, to attract customers. One day, hospitals may even produce the one thing that has eluded them all: A bill that patients can readily understand. Copyright © 2013 Chicago Tribune Company, LLC |