Quote of the Day: “The Reality Is All About High Prices”


If there are lots of buyers of a service in a particular region but you’re the only supplier, you have a lot of leverage to charge high prices. Conversely, if there are lots of suppliers but you’re the only buyer, you have a lot of leverage to bargain prices down. In the healthcare world, hospitals are the suppliers and insurance companies are the buyers. So if there are only one or two hospitals in your region, then prices are likely to be high. Thus this comment about the trend toward consolidation of hospital chains:

“The rhetoric is all about efficiency,” said Karen Ignagni, the chief executive of America’s Health Insurance Plans, a trade group that represents insurers. “The reality is all about higher prices.”

Ignagni obviously has a dog in this fight, but she’s basically right. A 500-hospital chain might be more efficient than a 100-hospital chain. But it’s definitely able to charge higher prices.

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2019 demands.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate