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An Arm and a Leg
Hospitals are to blame for obscene health-care costs


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The tactic worked. From 1993 to 2008, the DOJ and the FTC failed to block a single hospital merger in the United States. By 2006, the average hospital-market HHI had increased from 2,440 to 3,261.

Hospital monopolies and oligopolies use their market power just as other monopolies do: to raise prices. James Robinson of the University of California looked at six common categories of hospital procedures, such as pacemaker insertions and knee replacements, and compared what hospitals charged for those procedures. He found that hospitals in markets with above-average HHI scores — the highly consolidated ones — charged 44 percent more than their brethren in markets with below-average HHI scores. And nearly all of that extra revenue from higher prices went straight to hospitals’ bottom lines, where it could be used to pay higher salaries, build new wings, and swallow smaller competitors.


Contents
August 5, 2013    |     Volume LXV, No. 14

Articles
Features
  • Face of the lawless bureaucracy.
  • Obama’s end-run around the Senate, and the Constitution.
  • Felix Rodriguez, freedom fighter and patriot.
  • Hospitals are to blame for obscene health-care costs.
Books, Arts & Manners
  • Charles Crawford reviews Margaret Thatcher: The Authorized Biography: From Grantham to the Falklands, by Charles Moore .
  • Daniel Foster reviews The Founding Conservatives: How a Group of Unsung Heroes Saved the American Revolution, by David Lefer.
  • Edward Feser reviews Conscience and Its Enemies: Confronting the Dogmas of Liberal Secularism, by Robert P. George.
  • Florence King reviews Rose Kennedy: The Life and Times of a Political Matriarch, by Barbara A. Perry.
  • Ross Douthat reviews Joss Whedon’s film Much Ado About Nothing.
Sections
The Long View  .  .  .  .  .  .  .  .  
Athwart  .  .  .  .  .  .  .  .  
Poetry  .  .  .  .  .  .  .  .  
Happy Warrior  .  .  .  .  .  .  .  .