Interesting juxtaposed articles by Ewe Reinhardt and Paul Ginsberg at the Health Affairs site regarding the huge variation in payments by insurers to different hospitals for the same procedure. Imagine what an individual pays!
Here’s an example from Reinhardt’s article:
Medicynical note: These insurers are negotating with providers in a free market to provide the least payment possible for the service provided–so as to maximize the insurer’s profit. The insurers are unable to reach a consistent payment for the same services. The insurers presumably are knowledgeable and have the advantage of reams of information about payments to other providers for the same service and still cannot arrive at a consistent price.
This is the “free and open” market that our conservative friends talk about. They would argue that the consumer would have incentive to shop for the cheapest price and go to that facility, disregarding urgency, locale, quality, ability to understand alternatives, and convernience. This is not reality.
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