Why Hospital Charges Vary So Much

By Caroline Poplin, M.D.
The New York Times, May 13, 2013

Re “Hospital Billing Varies Wildly, U.S. Data Shows” (front page, May 8):

No one should be surprised that hospital charges vary wildly, even within the same city. Prices likely vary within the same hospital, depending on who is paying. This is pure capitalism in a setting where sellers have market power: the seller maximizes profit by charging each buyer as much as he can pay, whatever the service actually costs.

Making these sticker prices public will change nothing; most people will have to go to the hospital in the network, the one that gave their insurer a “discount” that still guarantees the hospital a healthy profit. We all pay in premiums.

Price competition among hospitals is problematic, because it is hard to compare “products”: people prefer a hospital recommended by a trusted doctor. The solution is Medicare for all: hospitals compete fiercely on quality, we save a ton of money, and the hospitals with the best quality and the lowest costs profit.

Dr. Caroline Poplin is a primary-care physician and a lawyer. She resides in Bethesda, Md.