Letter submitted to Sen. Arnie Roblan and to The Siuslaw News
by Arnold Buchman, Florence
March 30, 2015
Hospital economics, whether for-profit or not-for-profit, are an oriental bazaar of fiscal illusions. At its core is the hospital’s “chargemaster,” a computer program of it precise charges for everything from a day in the ICU to a single aspirin. Hospitals guard access to their chargemaster like Coca Cola guards the formula to its soda.
Third party payers like Medicare and United Healthcare negotiate discounts from these charges which, as Steven Brill demonstrates in “America’s Bitter Pill”, have literally no rational relationship to the hospital’s costs in providing its services. Thus, a hospital will charge $1.50 for a single ibuprofen when you or I can buy 1,000 of them at Costco for $10.49.
Those with little or no insurance needing serious medical care get charged the full chargemaster rate. As Mr. Payn indicates, having no bargaining power they end up with empty pockets, often having to file for bankruptcy.
Mr. Payn points to two proposed bills in Oregon, SB 891 and SB 900, that could help those shopping for healthcare. SB 891 would require healthcare facilities to timely respond to a consumer asking for charges billed for healthcare services. SB 900 would require Oregon Health Authority to post on its website healthcare price data for inpatient and outpatient hospital services. Unfortunately, SB 891 could be an administrative nightmare for hospitals while the data called for in SB 900 would be historical and therefore of little use to those seeking current charges. Requiring each hospital to publish its chargemaster would be more efficacious in reining in hospital pricing.
At the root of the problem of outrageous pricing is a legislative reform jerry-built on the third-party-payer based, fee-for-service methodologies of our healthcare system coupled with non-governmental program access eligibility based on employment status - active, retired or dependent. Obamacare, although it is a significant step in the right direction, does not directly address the problem. SB 891 and SB 900 may chip away at it but a meaningful solution will come only with a single payer system.