How Hospital Consolidation Could Cost You Money
Cleveland's hospital systems are following a national trend of consolidation. One writer shows how it may affect your bottom line.
Still confused, I told a local health care expert my story. My $75 co-pay had nothing to do with the price of my visit, swab and prescription, he explained: “People buy insurance, they don’t buy health care.”
The bill didn’t say how much my care actually cost, and the urgent care center wasn’t going to tell me. They and my insurance company negotiated that price.
Then the expert turned the knife. “This is gonna infuriate you,” he said. The center had apparently marked up the price of my throat swab. My insurance company had refused to pay that inflated price, and the care center was trying to make me fork over the difference, a practice called balance billing. The $11.39 bill was a shot in the war over health care prices, aimed straight at my wallet.
The Health Care Cost Institute found health care prices in Northeast Ohio have risen by 11% from 2012 to 2016. Spending per privately insured person had also grown by 4.2% nationally in 2017, the second year in a row with growth more than 4%, the institute also found.
Consolidation is one factor driving the rise. As hospital systems get bigger, they have more leverage over insurance companies to raise prices.
In 2018, a study commissioned by The New York Times found that from 2010 to 2013, the average price of a hospital stay rose between 11% and 54% in the 25 metro areas with the highest rates of consolidation, such as Chattanooga, Tennessee. Admission prices are also rising, the study found.
Cleveland’s consolidation isn’t as severe as those 25 areas, some of which have a single health system. “Northeast Ohio is not as concentrated,” says J.B. Silvers, a professor of health care finance at the Weatherhead School of Management at Case Western Reserve University. “There’s still competition.”
But Cleveland’s systems are chasing bigness. University Hospitals’ branding is now emblazoned on buildings in Elyria and Parma, just a few of its 18 area hospitals. In January, Cleveland Clinic bought three more Florida infirmaries, adding to its portfolio of 13 hospitals in Northeast Ohio. Just before MetroHealth opened a new building in the spring, it got permission to expand outside of Cuyahoga County, a sign of things to come.
A federal rule, instituted in January, requires hospitals to post price lists for medical procedures online, which could let patients get a better handle on what their throat swabs actually cost, and whether prices are going up. But if prices continue to rise, experts say it will be patients left holding the bag.
“People should care,” says Loren Anthes, public policy fellow at the Center for Community Solutions’ Center for Medicaid Policy, “because, one way or another, they’re going to pay for it.”
What did I do with my $11.39 bill, the expert wanted to know?
“I just paid it,” I said. “I’m the sucker.”
