Will the Bubble Burst?

Brian Klepper

Posted 8/19/12 on Medscape Connect’s Care and Cost Blog

My recent 3-hour outpatient prostate biopsy generated nearly $25,000 in charges. My health plan will probably settle for four to five thousand dollars – this is the real market value – but if we were uninsured we’d be on the hook for the whole thing. All in all, a minor diagnostic procedure – nothing cured or treated – for the cost of a pretty nice car.

The capricious insanity of health care pricing is delivered with straight faces by health care professionals and executives to flabbergasted patients and benefits managers. It is the by-product of a system utterly devoid for decades of transparency, accountability or market pressures.

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Recapping and Handicapping the Massachusetts Health Insurance “Market”

Paul Levy

First published 4/13/11 on [Not] Running a Hospital

The fastest way to raise hackles among Massachusetts hospitals, doctors, insurance companies, and even businesses is to suggest that a state rate-setting body would do a better job in setting payment rates between insurance companies and providers than the marketplace. Well, let’s test the proposition about the efficacy of that “marketplace.” Here is a short synopsis of the experience with the dominant insurance company over the last decade.

First, as documented so clearly by the Attorney General, pay above-market rates to the dominant provider system in Eastern Massachusetts, and also to geographically monopolistic smaller hospitals in the state. Transfer hundreds of millions of dollars in extra revenue to the dominant provider, permitting it to become still more dominant by investing in huge regional ambulatory care centers and acquiring physician groups. In so doing, assure an increase in patient volumes away from lower cost facilities and doctors, helping to fuel the rapid increase in health care costs in the state.

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Insurance Companies Dancing Without Touching

Paul Levy

First published 3/21/11 on [Not] Running A Hospital

A story in the Washington Post talks about health insurance companies seeking new lines of unregulated business as the profitability of health insurance falls and as more and more requirements are placed on that line of business as a result of the federal health reform law. Here’s an excerpt: “Insurers have moved into technology, health-care delivery, physician management, workplace wellness, financial services and overseas ventures in wide-ranging efforts to mitigate the new rules imposed by the law.”

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