A relatively unknown sector of US health care is hospital pharmacy dispensing of drugs.  Hospitals have very high prices for everything and drugs are no exception.  One reason hospital bills are high is inflated drug prices; drugs which could be purchased anywhere else for a fraction of the hospital price.  A new report details this outrageous behavior by our hospitals, most of which are nominally non-profit and supposedly serving the community.  Not only are the prices high, but they are variable between hospitals and even within the same hospital between payers.

It is hard to untangle this because while hospitals are subject to the price transparency rules, they do everything they can to make it impossible to figure out just how outrageous their prices are, including the prices for drugs they dispense.  The point of the transparency rules was to help patients be able to shop for services, which is dubious in many cases to begin with, but impossible when hospitals and other providers hide what they are charging.

Here is how crazy this is.  The price within the same hospital for a drug can vary by 2,347 times.  That’s right, one payer might be charged over 2,000 times more than another one.  For uninsured patients, the cash price is often the highest one.  There is no excuse of high administrative expense when the patient is paying.  Insurance companies sometimes pay more; this affects patients who often have copays and deductibles.  And hospitals are making a fortune of this pricing behavior.   (3Axis Report)

The fix is obvious, Congress should mandate that hospitals cannot charge more for a drug than they pay to acquire it plus a flat administration fee which must be directly related to the cost of administration, which is usually extremely low–doesn’t cost much to give someone a pill or an injection or even and infusion.  This is an example of why health care spending is so high–hospitals rip off payers and consumers to the greatest extent they can get away with.