Pittsburgh’s Future: Price Discrimination in Health Care

Filed Under: Costs, Patients, Providers

 

“Imagine going to the grocery store and being told that the price you’d pay for food would depend significantly on whether you had a job and where you worked. If you worked for one company, you’d get milk and bread at a price close to what the store paid the wholesaler. If you worked for a different company, you would have to pay 20% or 30% more. If you didn’t have a job at all, you’d have to pay three or four times as much. Same milk and bread, same store, but a different price for different customers. Bizarre, right? But that’s exactly the way things work in our health-care system.” Harold D. Miller,  Pittsburgh’s Future: Price Discrimination in Health Care.

He also includes this instructive graphic. While it’s a bit dated, the picture is striking.

“The difference between what is charged and what is actually paid by those with insurance varies dramatically from hospital to hospital,” he writes. “Several years ago, the Pennsylvania Health Care Cost Containment Council issued a report showing the published charges and the actual payments that hospitals received for heart bypass surgery. In some hospitals, such as Butler Memorial, Excela Westmoreland, Jefferson Regional, and the Medical Center of Beaver, patients without insurance were charged about twice as much as those with insurance. At other hospitals, such as Allegheny General, St. Clair, and Washington Hospital, the charges were about 2.5 to 3 times as much as what insurance plans paid. But at a couple of hospitals — UPMC Passavant and Presbyterian/Shadyside — the charges were quadruple what the hospitals were actually paid by insurers. However, even though the UPMC hospitals gave bigger “discounts” than the other hospitals, the average amounts they were actually paid were still higher because their charges were so much higher than the other hospitals; i.e., regardless of whether you had insurance or not, the cost of treatment was higher at those hospitals than at most of the others.”

 

heart bypass surgery chart