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Hospital Headlines Color Public Perception

John Commins, for HealthLeaders Media, April 25, 2012

The issue of price variance is not going away. Healthcare costs are consistently outpacing inflation in the general economy. In virtually every area of commerce and services, except healthcare, consumers can get on the Internet and shop prices.

Yes, informed consumers could conclude that healthcare pricing is highly variable because healthcare is far more complex than buying a set of tires. However, it is more likely that most consumers will conclude that:

  • Hospitals charge as much as they can get away with charging;
  • Hospitals don't know what to charge, or how much their competitors charge, so they use a dartboard; or
  • Both. Neither of these options reflects well on hospitals.

Making Big Profits as Non-Profits
For the past few days, The Charlotte Observer and The News & Observer of Raleigh have done an in-depth and mostly unfavorable series of articles on nonprofit hospitals in North Carolina. The reports have concluded that the largely tax-exempt nonprofits do well to improve their bottom line, but provide very little in the way of charity care.

This is not the first time that the value of a nonprofit hospitals' tax exempt status has been challenged. Though the investigation is limited to the Tar Heel State, many of the findings could be applicable to nonprofit health systems and hospitals across the nation.

Once again, this should be a source of concern for hospitals at a time when consumers are angry about rising healthcare costs and politicians are looking for scapegoats.  

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