Healthcare costs are exploding in America, and a big part of that is hospital prices. Thanks to a federal law passed during the Trump administration that requires hospitals to provide public pricing data, we now have a record of what hospitals are charging for various services. And what they charge varies substantially, according to a new report from Rice University's Baker Institute for Public Policy. The report specifically compared prices at Houston area hospitals and found large differences for the same hospital stays and procedures, depending on the hospital, the location, and the insurance company, among other factors. The study's author concluded, "It may be beneficial for Houstonians to call hospitals and shop around for the best prices."
Indeed, the study found for those with Aetna coverage, the average price for a hospital stay for six common diagnoses varied from more than $19,000 at Memorial Hermann to about $10,000 at CHI St. Luke's and HCA Houston. "CHI's price was almost half of Memorial Hermann's...why? Well, there's only one CHI hospital, while there are a dozen of the others," says David Balat, healthcare analyst with HC Finance, who was not involved with the study. "It's the bigger systems that have more leverage because of their market power, that have the higher prices."
Balat tells KTRH that consolidation in the hospital industry has only hurt consumers and driven up prices even more. "We've got to really look at how we can rein in this predatory and monopolistic behavior, and create more competition in this market, that's so badly needed," he says.
Requiring hospitals to be transparent about their pricing was just a first step in achieving that goal. "What needs to happen in tandem with the transparency effort is more competition in the market," says Balat. "If we have transparency and no competition, all we're getting is we're seeing how bad we're getting screwed."
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