Cost Plus in Medicine

In nearby Seattle Swedish Hospital, the largest private hospital system in the area is in a dispute with Regence Blue Cross. Without getting into who’s right or wrong consider the magnitude of rate increases:

  • “According to Regence, Swedish is seeking rate increases totaling 32 percent (Medicynical emphasis) over three years. That’s nearly double the rate increases that it has received in recent years and more than the rate of health-care inflation, said Rachelle Cunningham, a spokeswoman for Regence.”

Medicynical Note: In near depression times health care cost increases march on. Note that while Swedish’s increases are excessive, health care costs are increasing across the board in the range of 10%/year.

Providers are unwilling to become efficient; insurers lack leverage and motivation to control costs; and suppliers (PhARMA and other patent holders) continue to overcharge for their advances. In the end we all pay.

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