Dr. Andy

Reflections on medicine and biology among other things

Wednesday, September 14, 2005

Our health care system

Call me crazy, but this doesn't seem like something that would happen in a rational health care system:

It began last year with Lori Mill's toenail — or rather, with Mill's $1,133 medical bill from Virginia Mason Medical Center for a 30-second office procedure on her toenail.

Mill complained about a $418 charge for "miscellaneous hospital charges." When Virginia Mason responded that it routinely adds such a "facilities charge" when patients go to its downtown clinic instead of its other clinics, she got a lawyer and sued.

I'm not sure what the answer is, but this isn't it. (Hat tip to The View through the Windshield)


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At 12:16 PM, Blogger TM Lutas said...

The key phrase in the article is "so it is authorized by Medicare to charge more". Some of those authorized charges for service are below actual cost and some allow more than reasonable profits. On balance, the hospital doesn't go broke.

The hospital isn't allowed to rationalize its prices and that's by government fiat. The government, of course, won't allow itself to be sued for its mispricing so the hospital is in the dock on its own.

If the hospital could raise prices on services that it loses money on, it could afford to drop the outrageous facilities charges without going bust. The fix is in the Congress, which has the right to change the law to allow pricing flexibility.


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