Price transparency in the healthcare industry has become one of the biggest issues in 2013. A new article in the New York Times has dug further into hospital prices and why they appear to lack rationality.
The article, written by Elisabeth Rosenthal, explains that hospital care represents the biggest portion of the country's $2.7 trillion in annual healthcare expenditures. Ms. Rosenthal interviewed several patients on their healthcare bills, including one who received a bill of more than $3,300 for five stitches.
High hospital prices and chargemasters entered the national conversation this past February in Steven Brill's massive report for TIME, "Bitter Pill: Why Medical Bills Are Killing Us." Ms. Rosenthal's article similarly stated that hospital prices are so expensive because "hospitals are the most powerful players in a healthcare system that has little or no price regulation in the private market." This issue is compounded as hospitals and health systems merge and acquire each other, becoming larger organizations with more negotiation clout with health insurers.
However, hospital executives have defended hospital pricing. Although many have embraced the transparency movement, hospital officials say their prices are justified because they are required to be open 24/7 and have to have enough money to provide essential, expensive services.
"Hospital care is extremely expensive to produce and to have available for everyone in the community," Warren Browner, MD, CEO of California Pacific Medical Center in San Francisco, told the Times. He added that "every penny of the revenue" his organization earns goes back into the organization and community, and they have to offset the care provided to the uninsured and underinsured.
More Articles on Hospitals and Price Transparency:
Strong Healthcare CFO Leadership: What Does It Take Today?
10 Characteristics of Effective Healthcare Price Transparency Tools
Unveiling the Cost of Care: How Transparency Changes the Patient Perspective