Monday, August 26, 2013

Saline IV Marked Up Hundreds of Times in Sales to Patients

Today's web edition of The New York Times contains a fascinating article about the mark up by hospitals of saline IV's.  These are a standard component of emergency room and hospital visits.   The Times article tracks the outbreak, treatment, and billing of a food poisoning episode in upstate New York. The saline IV bags cost between $.44 and $1.00 to produce.  They are billed by care provided at sometimes hundreds of dollars per IV bag.
There appears to be great secrecy in medical pricing.  Often, middlemen or dealers provide medical supplies to hospitals.  Usually, these supplies are bundled together.  Sometimes, items such as saline IV's are sold as "loss leaders."  However, it is virtually impossible to track down the itemization of costs and charges for medical care.
The following questions arise:  1) is this an inefficient market due to excess secrecy, 2) are there illegal kickback and tying arrangements at issue, 3) is there some other explanation?

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