New Hospital Policies That Affect Healthcare Pricing

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In the midst of many public complaints about the high costs of healthcare in the U.S., there are new hospital policies that are affecting healthcare pricing. Keeping current on these hospital policies helps consumers understand what protections and rights they are allowed as well as any controversies about the policies.


Disclosure Policy on How Much Medicare Pays Doctors

In January 2015, the Centers for Medicare and Medicaid Services (CMS) announced it would disclose the amount of money that Medicare pays individual doctors. That is, provided the requests for this information are made under the Freedom of Information Act. Previously, that information had not been available to consumers, employers or the media, many of whom have put pressure on CMS for full disclosure of healthcare pricing.

Whether this policy will exist for long, though, is not clear as the American Medical Association has already expressed concerns that revealing these details violates privacy rights of both physicians and patients. If the policy does remain in place, it may have positive effects as research shows that transparent pricing often brings down costs over time. Lowering the inflated prices of many Americans’ hospital bills would surely be a welcomed change.


Rationing Healthcare Under Medicare

man against the worldMedicare is a health insurance program for elderly people in the U.S., run by the government. On January 26, 2015, the Obama administration announced major changes to the payment policy of hospitals and doctors under Medicare. The new policy change applies to payments made to hospitals and physicians under Medicare over the next three years. It will shift from a fee-for-service system to alternative models.

The significant price reduction will affect Medicare patients negatively, to put it mildly, as they will no longer have a normal amount of hospital care available to them. The new alternative model will be a profit-centered one that is more in alignment with Obama’s national healthcare system than the previous fee-for-service one.

Medicare has long been the saving grace for elderly and disabled Americans, in many cases keeping them out of poverty by providing them with adequate health insurance. And these are not just a few people either, with the number of Medicare subscribers estimated at about 50 million, spanning across the nation.

While medical costs will be reduced for hospitals, healthcare pricing for the elderly and disabled will increase over the next few years because of the new policy initiative. And it is part of the for-profit model of the Obama administration, which overturns the 70-year-old U.S. healthcare system that previously had been working. Without access to healthcare, how will older people be able to ward off the many illnesses that their aging bodies are vulnerable to? The result may be that their life expectancies decline due to a lower standard of living as they don’t have money to pay for healthcare.


Issues with Hospital Policies and Healthcare Pricing

Interestingly, it is very unusual to find a U.S. hospital that publishes its prices for inpatient and outpatient services on their website or elsewhere for the public to see. This void concerns many consumer groups who explain that it is difficult for many patients to determine in advance what they will have to pay for a hospital stay or doctor’s visit. Of course, insurers and hospitals are not complaining as they value negotiations, which would likely be jeopardized by making numbers public.

Additionally, it is well-known by the American public for prices to vary widely across the country for identical procedures. The price variation can be greater than a 100% difference. For example, the cost of a knee replacement can vary greatly in one state versus another state, and perhaps even within the same state. The varying financial numbers reflect the different rates of insurance companies but also attest to the variation between the pricey agreements that insurance providers have with hospitals.

Heavy debtUnfortunately, skyrocketing healthcare prices are not easy for many consumers to pay, especially when they have high deductibles. Sure, the upper class can pay, but what about the lower class and the quickly diminishing middle class?

In addition, insurance coverage eventually caps out at a specific dollar amount, therefore patients with ongoing large medical bills will face eventually having to pay the entire amount of the hospital bills they receive. Sure, as a consumer you can shop around for an insurance company but if there are only a limited number of insurance providers in your small town or city or there are only a few hospitals to choose from, then it’s a quick shopping trip. There’s little opportunity to price check; you’re stuck with the set rates for you and your family.

Of course, if you have more hospitals in your area, you could choose to go to a hospital that is less costly than another one. The problem, though, is that the expertise of doctors at the lower-priced hospital may be inferior as compared to a higher charging hospital. Should U.S. consumers have to sacrifice the quality of the healthcare they receive because they are not able to shell out the amount of money that someone else can pay? Also, should hospitals be competing in terms of what prices they attach to medical services?

Many critics would argue that the answer to both of these questions is “no” and that all Americans should have the right to quality treatment in hospitals, regardless of their income levels. However, those critical consumers and news organizations seem powerless to the large hospital systems that appear to have the upper hand here.

A clear remedy seems to be strict regulations on hospital pricing to reduce fluctuations. As healthcare costs continue to skyrocket, many consumers are wondering when the amount they pay out of pocket will start to lower rather than continue to rise.

Filed under: Resources, Small Business ACA, US Healthcare, News, Medicare, Hospital Bill Review, Medical Debt, Consumer Section

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One response to “New Hospital Policies That Affect Healthcare Pricing”

  1. i broke my right ankle which need mayor surgery i was in the hospital till 11 p.m
    ond they sent me home,not knowing my copay was going to $2800.00 and if i stayed my copay would 250.00 why are the poor people allways getting ripped off, it would of cost no more to keep me for 8 more hours was it just to get that extra money and keep us poor