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Thanks for posting the article from Open Health Policy about hospital charges. This is a lively website that I will read in the future.
The advocates of price transparency in hospitals have not done too well, as the article points out. I understand the frustration — in that the commodities we buy have better quality AND lower prices each year, while services like hospital care have incredible price inflation all the time. Medical tourism would lead to lower prices, but it has never taken off.
Why is this? Well, some hospital care is involuntary, it cannot be postponed. I do not know the exact percentage, but it is not trivial.
Also, we want a familiar doctor to treat us in the hospital. We may be putting our lives in their hands. We may also want family members near us, not waiting until we get back from the cheap surgery in Bangla Desh.
In the non-health care world, the provider that constantly raises prices will eventually lose out. Basically, no one will buy their stuff.
But how we get to this point in hospital care is not so clear. Individualized insurance and more use of Health Savings Accounts does not seem able to turn the tide.
Personally I think that hospitals should be treated more as public utilities. They would be supported in tough times by taxpayers, but their prices would be regulated without a great deal of fuss.
“Starve the Beast” has to be the worst unofficial economic policy to have been adopted over the past 50 years, at least where the federal budget is concerned.