Thursday, August 30, 2012

Obamacare’s Cartels Raising Health Care Costs

Two articles in the past week have demonstrated the impact of Obamacare on health care professions, and the bottom line for millions of struggling American families.  First, the Washington Post profiled two recent mergers – one among insurers, another among assisted living facilities – noting that “the health care industry is increasingly turning to consolidation as a way to cope with smaller profit margins and higher compliance costs that many anticipate when the federal government’s health care reforms under [Obamacare] take effect.”  One analyst noted that “the regulatory limitations on their margins mean that to drive profitability, they need to get leverage on [administrative costs]….In order to do that, they need to be bigger.”

The another article, this one in the Wall Street Journal, highlighted how bigger does NOT mean better for patients.  The article began with the story of a Nevada patient whose echocardiogram bill rose from $373 to a whopping $1,605 in the space of six months.  The same procedure – performed in the same office, by the same cardiologist – quadrupled in price simply because the cardiologist’s practice had been bought out by a hospital system, which used the change in ownership to extract higher prices from insurers.  The Journal notes the increasingly common nature of the practice:

With private insurers, hospital systems with strong market heft can often negotiate higher rates for physician services than independent doctors get. The differential varies widely, anywhere from 5% or less to between 30% and 40%, industry officials say.  The bounce can be far greater: Blue Shield of California said that after one group of physicians based in Burlingame, Calif., came under the umbrella of the powerful Sutter Health system in 2010, its rates for services increased about 140%.  The insurer said it saw a jump of approximately 95% after a Santa Monica, Calif., group became part of the UCLA Health System in January 2011.

Summing up then: Thanks to Obamacare, hospitals, insurers, and physicians feel the need team up – in an attempt to gang up on patients and charge the highest possible prices, raising costs rather than lowering them.  Call this many things, but do NOT call it “reform.”