February 24, 2013

HOW HOSPITAL ADMINISTRATORS HIDE THE UMBRELLA: Hospital pricing is famously opaque. And until we understand it, we’ll have a hard time controlling costs.

The web of cross-subsidies, underpayments, overpayments, and upcoding is opaque to everyone except the adminstrators. And they are not, as Brill observes, eager to make any of it clearer. In part because they genuinely feel, as does the middle manager in our story, that they are forced into these little subterfuges to recover legitimate costs that short-sighted bean-counters are refusing to cover.

I don’t say that they are right to feel this way; only that the feeling is quite clearly sincere.

I favor fixed prices, advertised in advance.