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New Report Shows Large Price Differences in Medical Devices
A recent article in the Wall Street Journal stated that some hospitals pay thousands of dollars more than others for medical devices such as defibrillators and hip replacements. A new government report stated that a portion of these higher costs could then be passed on to the federal Medicare program, according to the Wall Street Journal article.
Investigators Findings
The government report indicated that among the 31 hospitals surveyed by investigators for the Government Accountability Office, one hospital paid $8,723 more than another for an identical model of a device that regulates heart rhythm. This type of device typically costs hospitals between $16,445 and $19,007.
Other devices were found to have varied pricing. Prices paid for the same drug-eluting stents (DES), a device used to prop open diseased blood vessels, varied by as much as $828 from their typical cost of $1,700 to $1,800.
Hospital Mark Ups
Hospitals may not always be blameless when it comes to these large price differences. It is true that there are varying costs when purchasing medical devices, but this is most likely due to an untrained purchasing manager. In defense of the free market system "let the buyer beware." Hospital purchasing personnel may not be doing their "homework" prior to buying these devices. What can be problematic about these types of situations is that hospitals in turn have at times been egregiously marking up the cost of these devices and passing it onto the private insurance market and public plans. While it may not seem like an issue now, it could hurt your wallet in the long run.
Funding Medicare/Medicaid Programs
What does this mean for you the consumer? Hospitals passing on marked up products costs can mean higher premiums if you are enrolled in a medical plan and/or higher taxes than necessary to fund Medicare/Medicaid services.
Transparency is needed in pricing for all medical services and devices. With pricing transparency medical service costs should quickly stabilize and eventually decrease, as competition encourages business efficiency.
Insurance Administrator of America wants to keep you informed of what is going on in the healthcare industry. Whatever the news is, IAA will be here, working for you.
How do you feel about transparency in pricing? IAA wants to hear your opinion!
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This entry was posted on February 8th, 2012 at 03:34:00 pm by BlogMe@iaatpa.net (IAA) and is filed under Hospitals, Medical Devices, Medicare/Medicaid Programs.