Hospital prices hit the roof

Jasmine Hearne

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According to the 2012 census, 46.5 million Americans live below the poverty line. When a single stitch now costs over $500, we risk an increase in untreated serious conditions, illegal purchases of medicines and back alley procedures. Obamacare is not enough, the government needs to lower hospital prices.

In November earlier this year, ABC News covered the story of Tracy Rud of Atlanta, who was rushed to Northside Hospital-Cherokee in Georgia for urgent gall bladder surgery for which she received a seven-page bill that totaled nearly $40,000.

“I wanted to cry,” Rud said to ABC News. “I just thought, ‘This is way too high.’ … I was just flabbergasted at what health care costs in the hospital.”

In an ABC News investigation, Rud’s hospital bill was compared line by line with a catalogue from one of America’s largest hospital suppliers. Rud received five bags of simple IV fluids during her three days in the hospital at a cost of $148.50 a bag.  ABC News found the same bag in the hospital catalogue for $1.17. And sterile water commonly used for irrigation purposes in hospitals, for which Rud was billed $67, could have been bought from the same catalogue for $1.16.

“The charges have no rhyme or reason at all. Why is 30 minutes in the operating room $2,000 and not $1,500? There is absolutely no basis for setting that charge. It is not based upon the cost, and it’s not based upon the market forces, other than the whim of the C.F.O. of the hospital.” said Gerard Anderson, director of the Center for Hospital Finance and Management at Johns Hopkins Bloomberg School of Public Health.

In 2013, the US spent 20 percent of their GDP, approximately $2.8 trillion on health care. This is more than twice the average for any other developed country. This high GDP spending is directly representative of the high hospital prices.

“It is not only that we pay for health care through a third-party reimbursement system, but that the rest of the system consists, in essence, of a vast number of independent, entrepreneurial providers of health care services and marketers of pharmaceuticals and medical supplies who are free to set their fees and prices as they see fit,” said Leonard RodbergResearch Director of the N.Y. Metro chapter of Physicians for a National Health Program.

Many supporters of Obamacare believed that this could solve or at least diminish the problem, however it hasn’t. Obamacare does not control the prices of prescription drugs or medical devices.

 

Time Magazine journalist, Steven Brill said, “If anything it [Obamacare] will increase the profit for the players in the market by making sure that more people have insurance and therefore more people are in the marketplace with the funds from insurance companies to buy all these products.”

Brill suggests we make it illegal for doctors to maintain an internal price list for their goods and services, levy a 75% tax on hospital profits, and impose price controls on pharmaceuticals. By not controlling the prices of prescription drugs we allow companies to create monopolies when a new “cancer wonder drug” is produced, and the company can charge whatever price they want for it.

“The medical billing system is complicated and confusing. Trying to understand all the code words and jargon can turn your brain into oatmeal,” said Rick H. Wade, Senior Vice President of the American Hospital Association.

Another contributing issue to high hospital prices in over service. Hospitals often provide patients with procedures that aren’t even necessary. However, our litigious culture is to blame for this. Hospitals overprice in order to avoid lawsuits if they miss diagnose or do not diagnose an illness. The government needs to dictate treatment protocols to avoid excessive over servicing.

The government needs to regulate more closely what hospitals are charging their patients. These prices are increasing at an average of 6.8 percent each year which is placing many Americans in dangerous situations where they are willing to further risk their health rather than receive treatment.