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Local

Report Pins Higher Health Care Costs On Prestigious Bay Area Hospitals

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(AP)

(AP)

CBS SF Bay (con't)

Affordable Care Act Updates: CBSSanFrancisco.com/ACA

Health News & Information: CBSSanFrancisco.com/Health

PALO ALTO (KCBS) – A review of state records revealed that Bay Area hospitals charged some of the highest rates for medical procedures in California.

Some prestigious facilities, like Stanford, were said to be driving up rates.

KCBS’ Holly Quan Reports:

The nonprofit, independent group Kaiser Health News reviewed state records, and determined that Bay Area hospital costs increased nearly 10% each year for the last five years.

Hospitals like Stanford, John Muir or Sutter Health were considered in demand by insurers.

“There’s an arms race in the health care market, where every place is trying to offer the newest, best thing. Single rooms, concierge services, parking, and it’s just not sustainable because already 50 million people in the country can’t afford health insurance. And it’s just going to keep on going up and up,” explained Kaiser Health News writer Jordan Rau.

He reasoned that some markups were legitimate, for instance because Stanford had to underwrite the costs of being an instructional hospital, or if a facility had to comply with mandated seismic upgrades.

However, he warned of a double-edged sword because of name recognition.

“I mean, if you’re going to get a double lung transplant you want to go to Stanford over, you know, the community hospital,” he acknowledged. “But if you’re going for a colonoscopy you’re going to pay twice as much. You’re going to pay over $3,000.”

Hospitals, he pointed out, didn’t make it easy for patients to shop around.

“People want the health care market to be like a car market. And it’s not. Hospitals insert gag clauses in their contracts with insurers, saying that they can’t share the prices. And so the insurers can’t really pass it along. Even when your employer is shopping around for different insurance policies, they don’t always know which hospitals or hospital systems in their network are the ones that are the most expensive.”

He added that big name hospitals simply had the clout to negotiate with insurers for higher rates.

“Hospital charges are based on the market,” explained Rau. “And if a place has a great reputation, like say Stanford, they can really charge more because every insurer wants or needs to have them in their network.”

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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