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Large hospitals systems have been forming regional monopolies for the last few decades. First they would buy other hospitals to increase negotiating leverage w

Large hospitals systems have been forming regional monopolies for the last few decades. First they would buy other hospitals to increase negotiating leverage with insurers, then they started buying outpatient clinics to control patient flow. They can also increase the amount they charge at outpatient clinics once the larger hospital system buys them. Hospital spend represents 30% of US healthcare spend, and physician spend represents 20%. Physician employment by hospitals is at an all-time high. Busting local healthcare monopolies would do a ton to lower healthcare costs Unfortunately that is difficult. The hospital lobby spends about as much as the pharma lobby. But the hospital industry has much more "soft" political power. Hospitals are one of the biggest employers in almost every county. So for a politician to fight hospitals would mean fighting their largest employers. Hopefully more people become aware of this behavior by hospitals. You dont read much about it in the media. I'd imagine this has is because no one is incentivized to call out this behavior by hospitals

creaghpatr 7y ago
Healthcare stocks comprise a not insignificant part of many Americans' 401k portfolios, the downstream economic effects of dismantling healthcare would extend way beyond the hospital/pharma industry.
- bad-joke 7y ago
  That 401k isn't going to be very useful if you can't afford healthcare.
  - TheOtherHobbes 7y ago
    And even less useful if you're bankrupted by it.
- DonnyV 7y ago
  Less than half of the population have stocks of any kind, so this is not an issue. For the ones that do, re-balance.
- shantly 7y ago
  Hospitals & hospice are the ones who're gonna suck up all that sweet 401k money eventually anyway, in most cases. Inheritance is dead for the middle class—the elderly are, in the best case, sustained by their retirement accounts until they get sick in the last 5-10 years of their life and the healthcare industry siphons off all their money. So yeah, go ahead and hit my retirement account for 20% in exchange for fixing healthcare—properly, like a real friggin' modern country I mean. Seems like a bargain.
jcranberry 7y ago
Are you sure that we should be going after hospitals rather than the insurance companies? I've been told by a doctor friend of mine that the price of treatment in hospitals are often affected by how much insurers are willing to pay. They bill an insurance company X, the insurance company only a fraction of that and the hospitals just have to deal with it. So suppose they get more leverage and they increase how much they charge--is that an increase in how much insurance companies pay or how much patients pay? Or both? And how does this compare to the actual costs of treatments before and after such an acquisition?
- Zelphyr 7y ago
  Except, as I understand it, it's more like this: Hospital bills Insurance Company $XXX,XXX.XX and Insurance Company says, "No, we'll only pay $XX,XXX.XX" so Hospital pays it. What's not mentioned is that it only cost Hospital $XXX.XX for the procedure so while they're complaining that the insurance companies only pay them a fraction of what they billed for the procedure, they're still making a massive margin. That's not to suggest they don't have real, valid expenses. That's not even to suggest their expenses aren't high but, how would we know? They won't even tell us, the patients, how much any given procedure costs. It all seems like a wink-wink-nudge-nudge between them and the insurance companies to me while the rest of us get screwed.
  - jcranberry 7y ago
    That would imply hospitals are a very profitable business. However, only 18% of hospitals are for profit in the first place, and nearly a hundred hospitals (mostly rural) have closed in the last year. The operating margin of NFP hospitals in 2017 was 1.7%. The average operating margin of the S&P 500 was 10.7%. And id bet insurance companies are looking better than hospitals as well. Plus hospitals cant just charge for procedures at cost. There are revenue sinks hospitals have no choice to deal with. If someone without insurance and no source of income gets hurt and has to go the ICU, it can cost upwards of 10k a day. Who pays the bill? The hospital. And they cant discharge such a patient until they're healthy.
    - 7y ago

creaghpatr 7y ago

Healthcare stocks comprise a not insignificant part of many Americans' 401k portfolios, the downstream economic effects of dismantling healthcare would extend way beyond the hospital/pharma industry.

bad-joke 7y ago
That 401k isn't going to be very useful if you can't afford healthcare.
- TheOtherHobbes 7y ago
  And even less useful if you're bankrupted by it.
DonnyV 7y ago
Less than half of the population have stocks of any kind, so this is not an issue. For the ones that do, re-balance.
shantly 7y ago
Hospitals & hospice are the ones who're gonna suck up all that sweet 401k money eventually anyway, in most cases. Inheritance is dead for the middle class—the elderly are, in the best case, sustained by their retirement accounts until they get sick in the last 5-10 years of their life and the healthcare industry siphons off all their money. So yeah, go ahead and hit my retirement account for 20% in exchange for fixing healthcare—properly, like a real friggin' modern country I mean. Seems like a bargain.

jcranberry 7y ago

Are you sure that we should be going after hospitals rather than the insurance companies? I've been told by a doctor friend of mine that the price of treatment in hospitals are often affected by how much insurers are willing to pay. They bill an insurance company X, the insurance company only a fraction of that and the hospitals just have to deal with it. So suppose they get more leverage and they increase how much they charge--is that an increase in how much insurance companies pay or how much patients pay? Or both? And how does this compare to the actual costs of treatments before and after such an acquisition?

Zelphyr 7y ago
Except, as I understand it, it's more like this: Hospital bills Insurance Company $XXX,XXX.XX and Insurance Company says, "No, we'll only pay $XX,XXX.XX" so Hospital pays it. What's not mentioned is that it only cost Hospital $XXX.XX for the procedure so while they're complaining that the insurance companies only pay them a fraction of what they billed for the procedure, they're still making a massive margin. That's not to suggest they don't have real, valid expenses. That's not even to suggest their expenses aren't high but, how would we know? They won't even tell us, the patients, how much any given procedure costs. It all seems like a wink-wink-nudge-nudge between them and the insurance companies to me while the rest of us get screwed.
- jcranberry 7y ago
  That would imply hospitals are a very profitable business. However, only 18% of hospitals are for profit in the first place, and nearly a hundred hospitals (mostly rural) have closed in the last year. The operating margin of NFP hospitals in 2017 was 1.7%. The average operating margin of the S&P 500 was 10.7%. And id bet insurance companies are looking better than hospitals as well. Plus hospitals cant just charge for procedures at cost. There are revenue sinks hospitals have no choice to deal with. If someone without insurance and no source of income gets hurt and has to go the ICU, it can cost upwards of 10k a day. Who pays the bill? The hospital. And they cant discharge such a patient until they're healthy.
  - 7y ago