Episode Details

If you go to the Sage Transparency dashboard Web site, you get a really graphical representation of the prices that any given hospital actually needs to charge so that they break even. You can see precisely which hospitals are operating on thin margins and which ones are not.

You might be thinking, "Okay, so ... what's the big deal about this? Why is the Sage Transparency information so meaningful? Aren't hospitals (most of them) providing their financial statements already?"

Well, let's discuss. First of all, we have the main hospital lobbying organization coming out with press releases such as this one saying (here's some quotes): "Hospitals have incurred serious losses …" "The vast majority of America's hospitals [are] in serious financial jeopardy …"

Combine quotes like these (and there are many) with some of the funny stuff going on in some (not all) hospital financial reporting—like counting investment losses from their venture funds, not counting endowments or their big trusts in the math, paying C-suites way more than the average doctor or worker, or all of the varied things that get counted or overcounted as charity care or community benefit—yeah, these hospital balance sheets are too often as much of a PR campaign as the PR campaigns. When you dig into them, you find some very wealthy organizations dressing up in Tiny Tim Cratchit pants and leaning on a crutch … at least whenever the cameras are rolling.

So, where are patients in all of this? Chris Deacon linked to a Qualtrics study recently. It seems that in 2020, 48% of people deferred care as a result of the pandemic. In 2022, 43% deferred care because of cost—48% from the pandemic, 43% deferred due to cost this past year … wow!

There are patients saying, "Hey, I have this giant thing growing on my arm. Is it melanoma? I don't know, but I do know if I go to the doctor, I'll be $600 in the hole … so I'll wait."

It doesn't matter how many medical advancements are made when almost half of the patients are making decisions like this, including patients with so-called "good" insurance.

Look, no one would or is arguing that hospitals aren't vital. They are essential. Hospitals can be amazing places where lives get saved. Amazing doctors and clinicians work in hospitals. But putting everything I just said together, let me summarize a textbook hospital chain one-two punch.

The halo effect many hospitals enjoy is massive, and those administrators who choose to can take advantage of that halo for financial gain. When hospitals' administrators cannot manage to curtail their own spending and then demand that their communities foot the bills, then the good that a hospital can do starts to go bad.

If you are a legislator, you might want to be paying attention to all of this. And when I say might be wanting to pay attention, I mean pretty much you want to be paying attention to all of this. With all of the data that is now available to especially more sophisticated employers, some companies are not building offices or plants in areas which are known to have healthcare prices that are multiples over what they should be. That might be in your legislative district or state.

Healthcare prices can be the largest cost for employers after payroll. Starbucks famously spends more on healthcare than they do on coffee beans. Nearly 8 of 10 employers considered healthcare costs a significant threa