Why are hospital prices crazy?

Sarah Kliff of Vox has an interesting article looking at hospital pricing.  She provides examples of $629 for a Band-Aid in an emergency department to over $3,000 to look at a bruised finger. Part of these high costs are not just physician time and treatment materials but a facility fee.  The facility fee is basically the…

End the Gag Rule

As Time Magazine reports, health care prices are fucked up.  Castlight is one company that is trying to shed some light on health care prices to improve transparency.  Their CEO, Giovanni Colella, write the following in Forbes: To start, health insurance companies should refuse to agree to “gag clauses” with hospitals who do not want their…

The Effect of Hospital Consolidation on Prices and Quality

An interesting report from the Robert Wood Johnson Foundation summarizes the literature describing the effect of hospital concentration in a market on prices and quality.  The general consensus from the literature is the following: Increases in hospital market concentration lead to increases in the price of hospital care Hospital mergers in concentrated markets generally lead…

What does drug ‘price’ mean anyway?

How much do drugs cost?  The answer to this question depends who you are and how you want to measure cost.  For instance, MediSpan‘s Master Drug Data Base (MDDB) defines drugs prices as follows: Wholesaler Acquisition Cost (WAC) – the cost reported to Medi-Span by a manufacturer at which wholesalers purchase drug products from that…

Uwe Reinhardt on Hospital Prices

Health Economist Uwe Reinhardt supports expanding the DRG system to all payers.   “Under Medicare’s approach, hospitals are paid one price for an entire inpatient episode, rather than piece-rate (fee-for-service) for every single supply and service delivered in that episode…To eliminate the rampant price-discrimination inherent in current hospital pricing, all hospitals under this system would…