Presented By: Zack Cooper, PHD, Healthy Economist, Yale University
Everyone has heard the stories… show up at the hospital with a high fever or broken bone, and go home with a medical bill in the thousands or tens of thousands of dollars, even for fairly common procedures. Patients with insurance don’t generally pay those prices, but what do they pay? And what do insurers pay?
It turns out that hospital pricing is a big mystery, one that health care economist Zack Cooper has been working to solve. His research shows that there’s little rhyme or reason to the prices that hospitals charge, except for one pattern: the more dominant a hospital is in its region, the higher the prices it can force insurance companies to pay. Those high prices then get passed on to consumers in the form of bigger insurance premiums. With hospitals consolidating and growing ever larger, that raises an important question: Can we ever hope to curb high health care prices, if trends continue the way they’re going?