Anti-Trust in Health Care and What is Non-Profit

I have just read a report* on health care costs in various regions of the U.S. outlining how the consolidation of hospitals and doctor's groups is allegedly resulting in monopoly pricing on the part of these groups in their negotiations with insurance companies.

Now I am not necessarily a believer that the insurance companies really are in need of federal protection-they tend to make a pretty dollar themselves. There is however something disturbing about the price differentials described in the article for the same procedures at hospitals/clinics in close proximity to one another and reimbursed by the same insurance company.

There are a few damning questions that arise for me in all of this.

First of all, the health care company highlighted in the article is a non-profit organisation which apparently is charging more, sometimes significantly more than other for-profit organisations. The charges being leveled at the non-profit group is that they are using their predominance in the region to command premium pricing from the insurance industry in a "take it or leave" negotiating style.

Now the concept of non-profit has always been a strange one for me. I understand that working in such an organisation doesn't mean that one has to work for minimum wage, but some how I thought that their was a community service aspect to the non-profit world and that in their corporate slogans they would put their clients first-and mean it.

Another aspect that disturbs me is the somewhat supine response of the insurance companies. In the U.K. for example, there is the National Health (NHS)choice, which is free; and then there is the private insurance route. The insurance companies offer various plans with correspondingly higher or lower premiums. They dictate what they believe a certain procedure should cost, and that is what they will pay.

The patient/client then has the choice to either go to a provider that will do the specified procedure at the insurance company's price, or they can decide to go to the hospital of their choice and pay the difference.

It would appear that many Americans are unaware of the price differentials for the same procedures, and perhaps more importantly, given that their insurance company pays the full price anyway, they have no incentive to find a cheaper provider, or to have to weigh the potential cost to themselves.

Of course the patient/client does end up picking up the higher cost to the extent that insurance premiums are rising.

Readers of these pages will know that I am a strong proponent of the need for regulation. It would appear to me that in President Obama's Health Care Plan there is a compelling need to look at pricing and competition and to either enforce existing regulation, or write new rules to ensure that health, which is essentially a public utility falls under the correct jurisdiction.


*(http://www.bloomberg.com/news/2010-08-20/hospital-monopolies-ruin-mri-bill-as-sutter-gets-price-it-wants.html)