Friday, January 29, 2010


WSJ with interesting story from Massachusetts showing that prices that hospitals charge insurers often vary by a twofold factor for reasons that are not based on what most would probably assume. The report found that price differences were NOT based on (1) quality; (2) patient mix (how sick patients were) (3) payer mix or (4) costs of delivering care.

Reputation and location very important. I specualated back in December that while most folks worried about insurers not competing when one has large market share as Blue Cross Blue Shield NC does, that hospitals not competing I suspect might be much more important in keeping costs (amount paid by insurance for care) high in some markets.

If you think market forces are important for health care, it is not so good that quality and costs of delivering care are not closely linked to how much hospitals charge.

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