Insurers Pay Hospitals Twice Rate of Rivals in Some Areas

[xchrom]

http://www.bloomberg.com/news/2013-09-05/insurers-pay-hospitals-twice-rate-of-rivals-in-some-areas.html

Kansas City, Missouri, and Indianapolis residents with private health plans face some of the widest disparities in U.S. hospital costs, often being charged twice as much as nearby facilities, a study found.

The highest-priced hospitals in 13 cities studied are typically paid 60 percent more for inpatient services and almost double for outpatient care than the lowest-priced hospitals in the same communities, according to a study released today by the Center for Studying Health System Change. Hospitals with more market power have greater muscle in negotiations with insurers and can extract higher prices, the group found.

Many patients are unaware of the prices private insurance plans pay to medical providers. Scrutiny of costs is growing as the 2010 Affordable Care Act seeks to expand health coverage nationwide while lowering treatment costs. Health-care spending in the U.S. reached almost $2.6 trillion in 2010, more than 10 times what was spent in 1980, according to the Kaiser Family Foundation.

“Some hospitals are getting paid four times what Medicare would pay,” Chapin White, a senior health researcher at the Washington-based Center for Studying Health System Change and the lead study author, said in an interview. “Those high prices are a major contributor to premiums being as high as they are.”

[Demit]

1. I don't understand what is meant by hospitals with more market power.

Is this study comparing apples to apples? That is, is it comparing identical services offered by high-cost and low-cost hospitals? If so, why would insurers acquiesce to paying more than they have to? What gives these hospitals "greater muscle" in negotiations? This is a frustrating article.

[marmar]

2. Gee, one would begin to think the "Health Care" industry is a racket.

[xchrom]

3. GASP! nooooo -- that couldn't be...