Fast Foreward
If hospitals somehow unite and standardize their clinical, surgical and imaging procedural pricing across the board and the nation, it will translate into a Pyrrhic victory at best.
Let’s face it: They can’t even agree on supply data standards, electronic health record formatting and a host of other projects that would benefit from some semblance of homogeny. Yes, at least the majority assembled behind the ICD-10 conversion, but that required a governmental edict.
Instead of homogeny we see hegemony of interests. But fret not as this variety isn’t limited to the healthcare industry. Take food service and retail, for example.
Consumers in downtown Chicago, for example, will pay a different price — a higher price specifically — for an “Extra Value” meal than they would pay for the same meal in Green Bay, WI. Further, a widget purchased at a Target or Walmart in Denver will not sport the same price as one in Minneapolis or Little Rock, respectively. As an offset, when one airline company adjusts its ticket prices, the three wait to see how the market reacts before doing the same. Hmmm…
Just like real estate, consumers pay what the market will bear. It’s one of the hallmarks of the American capitalistic, free-enterprise economy. That doesn’t justify the decision or make it right. It just makes it real.
The same goes for healthcare. A surgical procedure in New York City, for example, will cost more than that same procedure in Akron, OH. Yes, charges may depend on how quickly a healthcare organization remits payment for products and services, or government and private payer contracts, or even random shaking of a “Magic 8” ball in a C-suite strategic planning meeting.
Further, a surgical clinic in rural Nebraska most likely will pay more for a small delivery of product than a hospital in urban Omaha that purchases the same product in bulk under a just-in-time distribution agreement. Here, freight, shipping and transportation efforts take a toll.
Price discrepancies happen. Market dynamics influence them.
Particularly irksome to some are those chargemasters within local integrated delivery networks that don’t agree. Imagine one hospital charging one price for a surgical procedure, while the “competitor” across the street charges another for the same procedure. Gas stations on each corner of a four-corner intersection have figured out how to play that game. Just check their signs for evidence. Hmmm…
However, refer to three paragraphs above for healthcare’s justification. Again, that doesn’t make it right.
But the focus is wrong. Perhaps those overzealous price checkers should turn their periscopes on a different aspect of the controversial issue: The quality delivered for the price charged. For healthcare, quality has to include patient outcomes, which factors in post-discharge behavior and compliance to clinical protocols.
Granted, the contents of an “Extra Value” in Boise, ID, should taste relatively the same to that cooked in Tupelo, MS, but we all recognize that disparities in taste take place. After all, someone in Boise may forget to add the cheese to the sandwich, while the person in Tupelo may leave the fries in the fryer too long and not salt them adequately.
In healthcare, facilities must factor in “human” decisions, too, but the X factor remains how each and every patient and his or her physiology reacts to everything done to him or her. No matter how we slice and dice the steps taken, we cannot control such individualistic responses. Perhaps we can come close to managing and manipulating them but not control them.
Does that mean we should stop the insanity of trying? No. Such “due diligence” is designed to keep healthcare operators “humble” and remind them of the depth and importance of the service they offer. Helping patients helps the community, culture and society — a tall order, a worthwhile cause, and something for which to be thankful.
Rick Dana Barlow
About the Author
Rick Dana Barlow | Senior Editor
Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].
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