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Broken Health Care

How much does a C-Section cost? The answer is complex, but At One Hospital, Anywhere From $6,241 to $60,584.

When a woman gets a caesarean section at the gleaming new Van Ness location of Sutter Health’s California Pacific Medical Center, the price might be $6,241. Or $29,257. Or $38,264. It could even go as high as $60,584.

The rate the hospital charges depends on the insurance plan covering the birth. At the bottom end of the scale is a local health plan that serves largely Medicaid recipients. At the top are prices for women whose plans don’t have the San Francisco hospital in their insurers’ network.

“It is shining a light on the insanity of U.S. healthcare pricing,” said Niall Brennan, chief executive of the Health Care Cost Institute, a nonprofit that analyzes medical costs. “It’s at the center of the affordability crisis in American healthcare.”

Trump Fought Secret Prices

On June 27, 2019, President Trump issued an Executive Order titled “Improving Price and Quality Transparency in American Healthcare to Put Patients First"

Informing Patients About Actual Prices. (a) Within 60 days of the date of this order, the Secretary of Health and Human Services shall propose a regulation, consistent with applicable law, to require hospitals to publicly post standard charge information, including charges and information based on negotiated rates and for common or shoppable items and services, in an easy-to-understand, consumer-friendly, and machine-readable format using consensus-based data standards that will meaningfully inform patients' decision making and allow patients to compare prices across hospitals. The regulation should require the posting of standard charge information for services, supplies, or fees billed by the hospital or provided by employees of the hospital. The regulation should also require hospitals to regularly update the posted information and establish a monitoring mechanism for the Secretary to ensure compliance with the posting requirement, as needed.

The American Hospital Association fought the ruling on first amendment rights.

On December 29, the U.S. Circuit Court of Appeals in the District of Columbia  upheld a district court’s ruling that the transparency requirement was legal.

Hospitals are now required to publish the rates they charge specific insurers for 300 common services considered “shoppable” in a way consumers can easily access. 

Trump fought secret pricing and won. It was one of the best things Trump accomplished in his term. 

Shocking Details

Charges to Different Insurance Plans

Depending on Who Pays

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  • Heart Procedure: $89,752 to $515,697
  • Spinal Fusion: Under $50,000 to Over $250,000
  • Hip Replacement: $3,264 to $81,617
  • C-Section: $6,241 to $60,584. The cash rate is $38,264.

Those are not rates that vary across the country or based on the skill of a doctor. Those are rates at the same hospital that depend on who is footing the bill.

Problems and Skin in the Game

The penalty for noncompliance is a mere $300 per day. Thus, I am surprised there is any compliance with Trump's executive order at all.

The second problem is many don't care. Once a person has met their deductibles they do not care. 

Those on Medicare or Medicaid do not care. 

Those with no insurance, no job, and no ability to pay do not care either because no one is ever turned away.

Unless and until there is skin in game in the pocket of the consumer including consequences for not buying insurance these problems will not vanish.

No insurance? OK. We will treat your pain and even fix a broken leg, etc. But Chemo? An emergency heart transplant? Where should the line be?

Medicare for All?

The problems with Medicare are obvious. 

  1. There are no cost controls anywhere.
  2. There is unlimited demand for free services 

We need more competition and more transparency. Trump's executive order was a welcome albeit small step in the right direction.