Hospital costs vary widely in the US, making life difficult for patients like Jen Villa in Salinas, California. Villa drove 45 minutes to Sutter Maternity and Surgery Center of Santa Cruz for cheaper labor while living near Salinas Valley Health Medical Center. Hospital price concealment has made some regions’ care prohibitively expensive, creating inequities and pushing people to pay more based on geography.
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Hidden Healthcare Costs: Disparities and Secrets Unveiled in U.S. Hospital Pricing
Bloomberg News found that over 350 U.S. hospitals have much lower-cost competitors within 5 miles. Often, cheaper facilities have comparable or better quality ratings. Lack of cost transparency has led to unanticipated effects, with people traveling further for cheaper care.
Villa lives in Monterey County, known for expensive hospital costs. The county has three of the most expensive hospitals in the nation. Villa chose Santa Cruz County to give birth because her health plan costs $10,000 more per year for coverage at these local hospitals.
Many hospitals have been slow to comply with 2021 federal requirements requiring price transparency. A Bloomberg review of Rand Corp. data found that lower-cost institutions received quality ratings equivalent to or better than their more expensive counterparts within a 5-mile radius more than half of the time. Large corporations facing escalating healthcare expenses want more openness and government intervention to fix the broken healthcare market.
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From Quadrupled Medicare Rates to Market Consolidation Challenges
Some regions have worse hospital pricing inequalities. Employers in Indiana found hospital prices virtually quadruple Medicare rates. This revelation challenged the American Hospital Association’s claim that Medicare is an inadequate standard for private costs and prompted congressional action and openness.
Critics say market strength and lack of competition raise prices, while hospitals say staffing and costs affect pricing. Only 4% of hospitals are in competitive markets due to decades of consolidation.
The hospital pricing discussion highlights the need to balance hospital finances with healthcare affordability. Hospital operational profit margins are near record highs, but policymakers must find ways to sustain economic pressure on hospitals to control prices and ensure patient access to care.
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