Health Care Pricing and Facility Fees

An Overland Park doctor writes an opinion piece today in the Kansas City Star detailing the excessive costs of two emergency room visits.  The piece misses some key areas of abuse such as hospital facility fees, but his anecdotes show clearly how the doctors at each emergency room made overly expensive choices about how to deliver care.

Can we reduce cost, thus increasing access without affecting the quality of care? The answer is certainly “yes.” — Dr. Stephen Kunz, Overland Park Radiologist

Insurance companies are trying to protect patients, believe it or not, and it’s borne out in these examples.  You’ll see in Dr. Kunz’s piece that the hospital tried to charge $7,000 for an emergency room visit, including an unnecessary CAT scan, but the patient’s insurance company only allowed them to charge around $4,000.  Even that amount would, if we could see the details, include a whopping “hospital facility fee,” which as we have detailed in another postis often charged in outpatient clinics (doctor’s offices owned by hospitals) as well.

Insurance companies can’t fight facility fees because hospital chains are too powerful.  These chains have achieved monopoly or duopoly power in many regions, and they can bully insurance companies into accepting these abusive practices.  Bloomberg News published an excellent investigation into the methods large hospital chains use to inflate medical costs.

Unfortunately, hospital chain power is only growing in Kansas City.  Two major hospitals are up for sale and will undoubtedly be swallowed by large chains.  This follows the purchase last month of a major independent hospital in Kansas City by HCA, the biggest hospital chain in the country.

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