Competition in Southern California Lowers Hospital Costs

March 8, 2011

When it comes to health care there's little debate about whether Northern California or Southern California is more expensive, says the Los Angeles Times.

  • On average, hospitals in Northern California's six most populous counties collect 56 percent more revenue per patient per day from insurance companies and patients than hospitals in Southern California's six largest counties.
  • In San Francisco, the most expensive of these northern counties, hospitals get $7,349 per patient per day on average.
  • In Los Angeles County the figure is $4,389, and in San Bernardino County, it's $3,931 -- the lowest of the southern six.

Northern California hospitals say their prices are driven up by significantly higher costs for labor, supplies and other necessities.  But leading health care economists say that most of the disparity stems from a lack of competition in the north, where a wave of consolidation has given a handful of hospital networks unusual power to dictate what private insurers and their customers pay for care.

In Southern California, competition plays a robust role in keeping hospital and insurance costs down. Half of the region's 167 hospitals are run by independent operators, says the Los Angeles Times.

Source: Duke Helfand, "Hospital Stays Cost More in Northern California than Southern California," Los Angeles Times, March 6, 2011.

For text:

http://www.latimes.com/business/la-fi-hospital-cost-20110306,0,1549848.story

 

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