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Experts Tell Supervisors Hospital Consolidation, Not Just Wages, Is Driving San Francisco Prices Higher
Summary
A Board of Supervisors audit hearing on April 28, 2011, heard experts and purchaser representatives who tied San Francisco’s high hospital prices to market consolidation, limited purchaser leverage and lack of price transparency — and proposed tools such as reference pricing, narrow networks and data sharing to hold costs down.
San Francisco supervisors heard a series of presentations on April 28, 2011, concluding that hospital consolidation and opaque contracts are major contributors to the Bay Area’s higher prices for inpatient care.
At the opening of the hearing, Chair David Campos framed the fiscal stakes for the city: “we are projected to spend close to half a billion dollars” on employee and retiree health coverage in the coming fiscal year, up from roughly $176 million a decade earlier. That dollar figure set the tone for panelists who argued that unit prices — not only higher utilization — have driven much of recent spending growth.
Why it matters: several presenters referenced press and state data showing a wide gap between what hospitals in San Francisco receive per patient per day and payments in Southern California; a commonly cited comparison in the hearing was roughly $7,349 per patient per day in San…
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