Why we pay more for health care!?

Pricing of health care in Massachusetts was analyzed by the Attorney General of that state. She found:

A. Prices paid by health insurers to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.

B. Price variations are not correlated to (1) quality of care, (2) the sickness of the population served or complexity of the services provided, (3) the extent to which a provider cares for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.

C. Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers.

D. Variation in total medical expenses on a per member per month basis is not correlated to the methodology used to pay for health care, with total medical expenses sometimes higher for risk-sharing providers than for providers paid on a fee-for-service basis.

E. Price increases, not increases in utilization, caused most of the increases in health care costs during the past few years in Massachusetts.

F. Higher priced hospitals are gaining market share at the expense of lower priced hospitals, which are losing volume.

G. The commercial health care marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.

Medicynical Note: Why do we pay more? Because our health care system is not a system. It’s a mechanism for manipulation and wealth accumulation not health care.


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