Bill Welch, head of the Nevada Hospital Association, blamed the high prices on "a high number of uninsured patients, a nursing shortage that drives up salaries, a mental health crisis that sees many people with emotional problems going to expensive emergency rooms for treatment, and a large percentage of patients who go to expensive emergency rooms for primary care."
However, these problems are common across the country.
University of Southern California Professor Glenn Melnick raised the issue of exaggerated list prices. "Raising list charges, which often bear little relationship to the actual cost of services... is a way hospitals also increase the amount they get from insurers, which often use the charges as a starting point in negotiating discounted contracts for their policy holders."
Once again we are hearing about how managed care organizations and insurers, who are often touted as tough agents for lowering health care costs, seem to think they are getting a great deal if they negotiate a fixed discount off wildly exaggerated list prices.
Nevada may be particularly at risk for high list prices because it is a state which attracts tourists. Melnick suggested that hospitals can make "millions" by charging sick or injured tourists full list prices.
Although Nevada hospitals appear not to be unduly profitable, Melnick also suggested that hospitals that are part of inter-state corporations may reduce their apparent profits by paying high prices for services provided by their corporate parent. "For example, if the corporate parent owns all the hospitals in a chain, it will often charge its hospitals high rent. It will do the same thing with the supplies that it buys for the entire chain.""The same goes for legal fees."
In summary, this article corroborates the previous post about California. Hospitals may charge very high list prices, because managed care organizations and insurance companies think they are getting bargains if they negotiate fixed percentage discounts off these prices, and because hospitals can get a away with charging tourists these full prices. Unfortunately, the uninsured are often charged the same high list prices, even if they are the least able to pay. The great variability in prices charged for the same service suggest that some hospitals are making unreasonable amounts of money for particular services even after the managed care organizations' or insurance companies' fixed percentage discount. Furthermore, hospitals can reduce the apparent profitability these prices generate by paying exaggerated rates to their parent health care system for services it provides them.
It's not a system that is likely to be give patients the best care for the most reasonable prices.
Let's see if anyone in managed care or government, who persistently seem to direct their cost-cutting efforts at primary care, will notice where much of their money really seems to be going.
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