Whoa! If you didn't think we needed serious Medicare reform, check this out.

[Lemon Drop]

DeusxMac wrote:
[quote=Lemon Drop]

Newly released data about what hospitals around the country are billing for identical procedures. In some cases, hospitals in the same city have a price difference of $100K, for the same procedure.

I believe the appropriate term is, charging "what the traffic will bear."

Barron's Business Dictionary:
A policy of charging to the limit that customers will pay. Discussed in connection with products that seem to be overpriced.
but not really for hospitals, because they've never been subjected to normal market conditions regarding pricing of their services.

[DeusxMac]

Lemon Drop wrote:
[quote=DeusxMac]
[quote=Lemon Drop]

Newly released data about what hospitals around the country are billing for identical procedures. In some cases, hospitals in the same city have a price difference of $100K, for the same procedure.

I believe the appropriate term is, charging "what the traffic will bear."

Barron's Business Dictionary:
A policy of charging to the limit that customers will pay. Discussed in connection with products that seem to be overpriced.
but not really for hospitals, because they've never been subjected to normal market conditions regarding pricing of their services.
In this case, "what the traffic will bear" is what the local community can pay; not what they should pay.

"...prices ranged from a low of $5,304 in Ada, Okla., to $223,373 in Monterey, Calif."

I've never been to Ada, OK, but I suspect it's not as affluent as Monterey, CA.

[Lemon Drop]

I see your point and there's no doubt that local real estate prices and other cost of living issues would drive the pricing in some cases.

But that does not explain hospitals across the street from one another or in the same general area with wildly different prices for the same procedure. I think that's the point the authors are trying to make.

[cbelt3]

Lemon-
I assume (as I attempted to note above) that the Medicare reimbursement rates and costs are calculated kind of the same way that defense contracts are calculated. EACH vendor negotiates independently, and provides separate financial information and cost models. Regardless of proximity or level of bling.

We may think of hospitals as a vanilla service provider, but the Medicare system probably does not.

If I'm right (and I think I am), then tearing that sort of system down will involve a lot of complexity and rewriting of the laws and rules that make Medicare work.

Americans tend to think of the services we receive as some sort of monolithic faceless organization that provides a common structure everywhere. It's not the case.

[Lemon Drop]

We don't need to tear Medicare down and I don't think that's been suggested (except by Paul Ryan and Grover Norquist) , but there is waste and inefficiency in the system now that needs to be addressed, so that this program, one of the things that makes our country truly great, remains sustainable.

The problem specifically here isn't so much Medicare reimbursement rates, which are similar across hospitals, it's what everybody else is paying and whether that is fair and reasonable.

[cbelt3]

I listened to NPR discuss this... Apparently there are standard rates. They did also discuss that these rates are pretty much irrelevant.