ABSTRACT
The US hospitals are the poster boys of crony capitalism. Crony firms invest their vast fortunes in teams of lawyers, accountants, and lobbyists to ensure that the system continues to work on their behalf. The US hospitals have lacked a culture of innovation and creative and strategic thinking that would address the profound deficiencies in today’s health care system. Instead, they have shown their adeptness in devising newer and better rent seeking strategies. Hospital markets in the US are super concentrated giving hospitals monopoly power in pricing of their products and services. Hospitals are well known for opaqueness in pricing. They use the hospital charge master as a pricing tool, which is an arbitrary, exploitative tool. Hospitals devise new ways of milking the system, such as lab tests and ancillary services, surprise billing, and emergency room services. Hospitals rely on overtreatments of medical procedures and services to enhance their revenues that cost taxpayers billions of dollars annually. Poor organization and management of the health care providers in the form of failures of care delivery and coordination, while adds to their revenues, cost taxpayers further billions of dollars annually. As a barometer of where the current US health care system stands, the Mayo Clinic model offering a well-organized, cost-effective, and high-quality care is losing out to the McAllen model, which is getting reimbursed at twice the rate of Mayo Clinic by Medicare despite offering average or substandard patient care. What a system!
