The Pricing of U.S. Hospital Services: Chaos Behind A Veil of Secrecy

Uwe E. Reinhardt


Health Affairs. 2006;25(1):57-69. 

In This Article

Concluding Observations

The bewildering and sometimes troublesome picture of contemporary U.S. hospital pricing is not entirely of hospitals' own making. They are part of a wider system of health care financing whose administrative expense now ranks as a major cost component of U.S. health care (as much as 25 percent).[36]

An old adage has it that "the only good tax is an old tax." The idea is that all economic agents in society have fully adjusted to an old tax, however inefficient, and that changing it may unfairly create winners and losers. It is surely so also with a hospital payment system. To move from the present, chaotic pricing system toward a more streamlined system that could support genuinely consumer-directed health care will be an awesome challenge. Yet without major changes in the present chaos, forcing sick and anxious people to shop around blindfolded for cost-effective care mocks the very idea of consumer-directed care.