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¶ … local hospitals have been criticized for charging greater fees for service to the uninsured than to those covered by insurance. While it is easy to understand the emotional reaction to this policy, it is difficult to provide any sound financial underpinnings for the brouhaha. Indeed, if were the hospitals to act otherwise, they would not only be violating several key, and easy to understand, economic principles. They would also be undermining future health care for these patients and all others, both currently and in the future.
Particularly taken to task for the fee differentials was The Advocate system, which serves "the most patients of any private health care group in the Chicago area, and treats more uninsured patients than any other private Cook County hospital system." (Handschel 2003)
No one has complained recently about a glut of doctors and nurses and other medical staff; on the contrary, the dearth of such medical personnel is frequently the source of comment. A quick look at the Employment ads in any big-city newspaper will...
In fact, paying bonuses to attract nursing staff is the only way to serve those very low-income patients, many of whom rely on public hospitals as their primary care centers.
While increasing revenues is necessary to continue to provide quality health care services, that doesn't' address the issue of charging more to one group of care-care services users than others. There are two answers, both of which are in accord with standard, accepted economic principles.
First, the lower prices granted to members of health insurance programs result from the negotiating power of a large group of people all seeking the same benefit. Just as collective bargaining works to get better wages for some classes of health-care workers, so collective negotiating works to get better…
References
Hantschel, Allison. "Latinos speak out against hospitals' price-gouging." 20 August 2003. Daily Southtown, A3.
An open letter to James Skogsbergh, CEO of Advocate Healthcare." 17 August 2003. Chicago Sun-Times, 30A.
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