Final week I reviewed an article on a few of the potential positives and negatives of huge, built-in well being programs. A current 60 Minutes episode talks about a few of the perils by inspecting how Sutter well being system has develop into a close to monopoly supplier in Northern California. Take into account the next interplay between Leslie Stahl of 60 minutes and Glenn Melnick, a well being economist at USC.
Glenn Melnick: …[Sutter Health] have monopoly powers in plenty of these counties, proper? And their costs went up. The subsequent yr, they went up even sooner. And so they discovered, “Wow, this actually works!”
Lesley Stahl: You may have a look at that and say, “That’s monopolistic.” Another person may have a look at it and say, “Wow, that’s sensible enterprise. That’s- that’s actually intelligent. Good for them!”
Glenn Melnick: If Sutter is ready to increase their costs by enhancing high quality, worth, and repair, that’s tremendous. What they got here up with is a mannequin that allowed them to amass market energy, and get greater costs with out doing any of these good issues for shoppers.
Within the lawsuit, proof confirmed that Sutter’s high quality of care, whereas well-regarded, was usually akin to different hospitals in California, and that its greater costs have been contagious.
Glenn Melnick: So we referred to as it the “Sutter impact,” the place if in case you have a big, dominant system like this, they increase their costs excessive, all their rivals can increase their costs greater. So there’s sort of this second-order impact: that this sort of habits results in a lot greater costs throughout the board.
One key problem is an absence of worth transparency, a difficulty that has been well-known in well being care for a few years. Hillary Ronen–a Metropolis Councilwomen in San Francisco (and my spouse’s cousin!) laments this lack of transparency
A motive their well being prices have been so excessive, she says, is as a result of Sutter was capable of block town and its insurer, Blue Defend of California, from steering workers to hospitals with decrease costs. And it was capable of forestall Blue Defend from telling town what Sutter’s hospitals would cost for particular person procedures.
Hillary Ronen: Sutter received’t enable us to see how a lot they cost for his or her companies. It– it’s unbelievable. And so we will’t comparability store. And so they maintain naming their worth, and I really feel like I’m handcuffed to do something about it.
Lesley Stahl: The insurance coverage firm, Blue Defend?
Hillary Ronen: Sure.
Whereas the Sutter case makes a superb story, the elevated supplier consolidation is going on throughout the nation. Elizabeth Mitchell, the CEO of Pacific Enterprise Group on Well being, notes this development is nationwide. Additional, hospital costs are the important thing driver of well being care spending.
Elizabeth Mitchell: That is taking place in Maine. It’s taking place in Texas. It’s taking place throughout the nation, the biggest well being programs are shopping for up all the pieces.
Lesley Stahl: Do you assume that that is the principle motive that well being prices are going up?
Elizabeth Mitchell: We now have seen the info. It’s the largest driver of well being care value will increase. It’s hospital costs. And so they’re not offering extra companies. And the standard isn’t growing. They’re simply charging extra for a similar factor. It’s simply the costs. And so they do it as a result of they will.
Watch the complete episode right here.