Since the Congress passed Romneycare, it’s worth looking at the major driver in Massachusetts of medical inflation–price gouging by hospitals and physicians groups that are able to set prices due to de facto monopoly power. From the MA Attorney General’s office (italics mine; underscore original):
In a presentation at the hearing, Attorney General Coakley, with the assistance of staff from her Health Care Division and two expert witnesses, outlined seven key findings that have powerful implications for the health care marketplace in Massachusetts…
2) Price variations for hospitals and physicians offering similar services are not explained by
- quality of care,
- the complexity of services or the sickness of the population being served,
- the extent to which a hospital cares for a large portion of patients on Medicare or Medicaid , or
- whether the hospital is an academic teaching or research facility;
3) 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;
4) Variations in providers’ per member per month expenses are not correlated to the methodology used to pay for health care, with expenses sometimes higher for globally paid providers than for providers paid on a fee-for-service basis;
5) Price increases, not increases in utilization, caused most of the increases in health care costs during the past few years in Massachusetts;
6) Higher priced hospitals are gaining market share at the expense of lower priced hospitals that are losing volume;
7) The commercial health care marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.
This is old-fashioned monopoly power. Maybe it requires old-fashioned trust-busting? Admittedly, most of the tamed, house progressive pundits wouldn’t dare mention something so uncouth, so liberal, especially since this report contradicts the following ‘progressive’* dogmas:
1) Healthcare is geographically variable, which reflects inefficiencies in the type of medical treatment (never mind the problems with the data used to support this position).
2) Fee-for-service leads to unnecessary procedures.
3) There are clever technological/informatics fixes to pricing problems (as opposed to doing the hard, confrontational work of stopping price-gouging).
I haven’t heard anything about how the proposed healthcare legislation will do anything to stop this. Anybody know? Because as long as there’s high cost inflation, healthcare, even Romneycare, will be unaffordable.
*I’m not a progressive (whatever that is), but a liberal.