WSJ.com - California Hospitals Open Books, Showing Huge Price Differences

Link: WSJ.com - California Hospitals Open Books, Showing Huge Price Differences. (subscription required)

A new law in California mandates that hospitals there do what few hospitals in America will: open up their "chargemasters," books that show thousands of list prices for medical goods and services. An examination of chargemasters at several hospitals shows that pricing strategies fluctuate wildly -- on everything from brain scans to painkillers to leeches. Depending on a hospital's pricing method, the charge for the same commodity or service, such as a blood test, can vary by as much as 17-fold from one institution to another.

Horrors! People will now learn that the respected institution in their community, "their hospital" behaves entirely irrationally in order to make a buck. There's merit to exposing this and other practices to daylight, but the real irrationality derives from the continuing skirmishes and overall lack of coherent information about what it takes to make a successful hospital work and serve its community. (I'll leave the justification for what it takes to serve hospital company investors for others to explain.