Letters: When discussing prices, let’s talk about the true prices

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.

Nathan Kaufman
Managing director
Kaufman Strategic Advisors

“Senate passes health homes bill for chronically ill kids” painted the bipartisan ACE Kids Act as controversial despite the bill twice passing the House by overwhelming majorities and unanimously passing the Senate. While the article cites opposition from unnamed groups, it completely leaves out the 30 national health organizations that supported this bill. What’s more, in the time since the article ran, the ACE Kids Act was signed into law. 

The ACE Kids Act attracted strong leadership and bipartisan support in both chambers for a simple reason: It’s a smart solution to identified problems. The legislation fixes issues raised by states and the CMS; while today states can use the existing health home model to improve coordinated care for Medicaid patients, they cannot focus this coordination on children specifically. The new law addresses this problem, identified as an “operational challenge” by states. 

In doing so, the ACE Kids Act enables care closest to patients’ homes, reduces unnecessary hospitalizations, and provides more coordinated access to specialized services a child may need across state lines. What’s more, while the article raises questions about cost, it overlooks the potential of real savings. A national Center for Medicare and Medicaid Innovation-funded three-year pilot of a coordinated-care model enrolled 8,000 children with medical complexity and resulted in reductions in Medicaid spending while improving family satisfaction.

Mark Wietecha
President and CEO
Children’s Hospital Association

The article “Urgent need for new revenue streams will shape providers’ strategies” stated that “90% of hospital and health system executives surveyed indicated that new revenue streams were an urgent priority expected to yield a return in the next three years.”

An urgent need for new revenue streams in healthcare? Are you kidding me? There is an urgent need for leadership accountability, innovation, standardization and quality to lower costs and increase access. Yet another rabbit hole to avoid solving the real problem as “the study looked at more than 1,400 novel revenue streams—defined as any revenue that is not based on traditional reimbursable medical services.” Big shift here away from employee and patient engagement to investor engagement. Sad. 

It is possible to run a business that has a big social purpose and make a profit, but it’s never enough with the rapacious appetite of investors who want ROI, not falling inpatient admissions and length of stays. Healthcare “leadership” is nonexistent if this is the path of preference in today’s environment.

Linda Galindo
Half Moon Bay, Calif.