Analysis on hospital pricing

by jerry on September 08, 2019
Kaiser Health News published some analysis trying to explain why hospitals may have been able to increase their prices without being nearly as maligned as others in the healthcare industry, notably pharmaceutical and insurance companies. Central to the analysis is that hospitals are local. For example, the author notes "It's easy to get voters riled up about a drugmaker in Silicon Valley or an insurer in Hartford. It's much riskier to try to direct their venom at the place where their children were born, that employed their parents as nurses, doctors and orderlies..." Additionally, hospitals may have been able to avoid some regulatory scrutiny because of their local political clout (with nearly every politician having a major health system in his or her district).

While hospital prices have increased less than many individual drugs (42% from 2007 to 2014), spending at hospitals is the biggest component of the healthcare industry expenditures. With that in mind, perhaps the American public would benefit from smaller but more numerous hospital systems that compete against each other.