Monopolies allow hospitals to get price they want
By Peter Waldman, Bloomberg
After Mark Logsdon tore a ligament in his knee skiing at Lake Tahoe in March, he returned home to suburban Sacramento and had an MRI scan at Sutter Davis Hospital.
Sutter’s price for the knee scan was $1,271, payable by Logsdon and his insurer. Exactly the same MRI at one of the local imaging centers owned by Radiological Associates of Sacramento would have cost $696 — 45 percent less.
Patrick Fry
It turns out that Logsdon didn’t know something that his insurance company does: Sutter Health Co., the nonprofit that owns Sutter Davis, has market power that commands prices 40 to 70 percent higher than its rivals per typical procedure — and pacts with insurers that keep those prices secret.
Sutter can charge these prices because it has acquired more than a third of the market in the San Francisco-to-Sacramento region through more than 20 hospital takeovers in the last 30 years, according to executives of Aetna Inc., Health Net Inc. and Blue Shield of California, who asked not to be named because their agreements with Sutter ban disclosure of prices.
Sutter operates in a competitive market, Chief Executive Officer Patrick Fry, 53, said in an interview. “I don’t see Sutter Health as having market power, given the choices that employers can make,” Fry said. “The market has a lot of room to make a lot of decisions.”
Has anyone noticed that Barton is consolidating it’s monopoly of the local market? They claim they are so much in the red that they have continued to get rid of it’s main core of solid longtime employees while buying up vitrually ever private pratice they can. In the meantime the top 5-6 executives suffer no pay cuts, benefits or fear of job loss? How does that work? Of course we know. Take your business off the hill when possible with any elective test or suguery!
Hey beenheretoolong, you might want to understand the facts before going on a rant.
First, the physicians that now have Barton managing their practices have done so willingly. Barton did not force or bull rush any docs into a hostile takeover.
In the current healthcare environment insurance companies are paying less and less which in turn requires physicians to see more patients per day. However benevolent the physicians are, they are in Tahoe for the same reasons we all are–the lifestyle. Seeing 30-50 patients a day and owning/managing a medical practice is easily two full-time jobs. There’s not much lifestyle with that type of workload.
What Barton has done is provided docs with the opportunity to practice what they went to school for–medicine. It also gives them a chance to spend time doing the other things they love. Not too bad of a deal if you ask me.
As for Barton’s “monopoly”, the added numbers actually gives them more leverage to bargain (with the insurance companies) for better contracts and reimbursement (which is, in turn, less money out of each patient’s pocket).
Most important to understand is that the prices hospitals charge are inflated because of the uninsured and underinsured that they are required by law to see.
If you went to that private radiology center for imaging you better have a credit card or a pocket full of cash to get your MRI. Step into any hospital ER and you get the MRI regardless of your ability to pay. There is no justice in the system. It’s a completely unsubsidized form of socialized medicine.
How many of your core employees could you keep if you a) didn’t have as many customers and b) had to write off 10-20% of your income to bad debt or charity care?
As for the executives, Barton did fire 5 or 6 directors a few months ago. More cuts were needed and they went into the upper levels of management.
Lastly, don’t ever call yourself a local. Being here a long time and encouraging anybody to go off the hill only shows that you are part of the problem. Locals are intent on building our community up and seeing our town revitalize and thrive.
So please feel free to go off the hill for your medical care…maybe you’ll like it down there and stay.
It is distressing to see all the Barton signs now on local medical practices that were once independent. This is not good for the consumer or medical patient as Barton gains a monopoly on previously competitive practices and sets high prices that no longer need to be locally competitive.
Recent price of a blood test at Barton’s lab: $158. Same test at Carson City independent lab: $44.
It’s called freedom of choice.
When you read the entire Bloomberg article you can understand why the Repubtreotic party hates their so called Obama Care. HOWEVER
Sen,Dr.Pastor Tom Coburn still advertises that his business accepts Medicare, Dr.Rand Paul INCLUDES cosmetic eye surgery AND accepts Medicare. Sen.Dr. Tom Barasso is a big State Con Doctor, Wickie up Good old Dr. Tom. Check on Former Dr. Sen.Bill Frist,of Schivo Fame.Forced out for insider selling stock in his Family owned Health Care Business when it started to tank. Bushie Boo Enron,Halliburton Cheney and Blackwater Too. Keep voting against yourself Repubtreotics.
I have a family Dr in town, but go off the hill for all testing and procedures, it’s usually about 70% cheaper, and when your paying out of your own pocket, it’s a no-brainer.
Reno Open Air MRI charges around $700 but you need to pay cash. Insureds pay alot more for whatever reason. It is a fact Barton charges the highest fees around for an MRI – so go off the hill for this one.
Yep folks, the medical care system is beyond corrupt.
Blame government, unions, insurance companies, greedy CEO’s, or whatever, but that doesn’t change the facts.
Want to buy a car but only find out what it costs after signing on the dotted line or go into a supermarket and have no pricing on the shelves. Or for the same product person A pays x, person B pays Y and so forth.
That’s our medical system.
Immoral, indecent, and obscene. But it still delivers damn good medicine most of the time.
Kind of reminds me of the airline biz. The plane has a hundred passengers lets say and everyone pays a different price with very wide differentials.
Financial corruption and deception on the highest order.
Good luck on ever straightening it out.
When the hospital wants its 100 dollars from you, ask them why Joe Blow was charged only 20 dollars for the same procedure. There must be reasonable equity and not gross disparity.
Ask CalStar how many people pay for their emergency heilcopter rides in full. You will be shocked. Sad but true.
Jason,
Been here over 35 years and have employed close to 900 hundred people over that time. Seen Barton destroy the core of great dedicated employees they had. Yes it’s sad that the private practice professionals have had to go this route (stick with your Doc’s if possible) but “go off the hill” for test and procedures (see comments above for pricing). And finally, with so many great dedicated people “canned” at Barton it’s time for the top 5-6 to step up to the plate. (PS Barton’s brass is picking up all they can to prime themselves for the sale of the assets to a large provider and get that “Golden Parachute”). A sad place indeed considering what great Doc’s like Ken smith, Peter Irving & the like had in mind when they got the “Local” hospital off the ground.
I am a doctor and let me tell you that Sutter offered me a job.
When I asked if I can negotiate the compensation, they told me “take it or leave it”
Doctor employed through Sutter medical groups should not be blamed. CEO’s and MBA’s are the one making money !!!