The April 15 cover story on hospital pricing (“Prices? Ask them,”) focuses on “hospital prices” but neglects the prices paid by 60% of the hospital patients, i.e., Medicare, Medicaid and “self-pay.” The true price a business receives for a service is based on the blended rate for all customers receiving that service. For example, even though the average commercial price for an MRI is $1,119, a hospital’s average price for all patients may be closer to $600 when taking into account Medicare, Medicaid, insured-bad debt and the uninsured.
But this article only talks about commercial prices and does not mention the below-cost prices from government payers. The overly simplistic analysis of hospital pricing replete with “bumper sticker” phrases, referencing a CMS study of questionable validity from 2011, marginalizes the complexities that health systems currently face.
Kaufman Strategic Advisors