A primary rationale is to increase the hospitals’ bargaining power with the commercial insurers in order to be able to raise their rates. If many of the hospitals in a geographic region are art of a single hospital system, then the insurer must include them in a network and the hospital system can demand high rates.

The “Charge Master Rate” is akin to the list price. “Typically, only a few people pay list prices, such as Arab sheiks flying in for a service and are asked to pay cash. Tragically, however, they are often collected from the uninsured, who have no leverage to negotiate lower prices.”

Our publisher received the following statement from Medicare summarizing billings and Medicare reimbursements for a recent cataract operation on one eye:

Robert: I am happy to have someone meet with you, Bob Macina, our EVP for Strategy and Administration will coordinate a time. I have copied him for your convenience in setting up a meeting. Tom

“Hundreds of U.S. health systems have merged in recent years, but ‘the benefits have been elusive,’ said Martin Gaynor, a professor of economics and health policy at Carnegie Mellon University and former director of the economics bureau at the U.S. Federal Trade Commission.”

NEW YORK TIMES: …Regardless of who is at fault, doctors and hospital executives across the country say they are distressed that the expensive electronic health record systems they installed in the hopes of reducing costs and improving the coordination of patient care — a major goal of the Affordable Care Act — simply do not share information with competing systems.

Hospitals often say they acquire other hospitals and physician groups so they can coordinate care, in keeping with the goals of the Affordable Care Act. But the agency, the Federal Trade Commission, says that mergers tend to reduce competition, and that doctors and hospitals can usually achieve the benefits of coordinated care without a full merger…

“One purpose of the 1994 merger, as the president of Mass General acknowledged in 2010, was to take away the ability of insurance companies to demand lower prices from one hospital with the threat that they could just send patients to the other.

It was a great deal for the hospitals. The fees they charged to insurers soared. One insurer, UniCare, said it had to accept a jump of 7 to 30 percent for its health maintenance organizations and 80 percent for its preferred provider organizations…

Boise’s experience reflects a growing national trend toward consolidation. Across the country, doctors who sold their practices and signed on as employees have similar criticisms. In lawsuits and interviews, they describe growing pressure to meet the financial goals of their new employers…