Competition vs Costs

One of our mantras here at IB is that health insurance costs continue to rise primarily because health care costs do. And now we have some independent, corroborative evidence of this position:

"Medicare’s studies have shown that patients fare FAR better when they have surgery in the specialty hospitals...But now those specialty hospitals pretty much can’t be built. There are a number of reasons...all of them stemming from stymied competition."

With competition comes choice, which is at the heart of consumer-centric health care, and a driving factor in cost. One of the problems is that urban areas have essentially forced out small, specialty-care facilities in favor of larger, community-based ones. From one perspective, this may be admirable: serving the needs of the many. But it comes at a price: the needs of the (desparately ill) few.

The FoxNews piece referenced above links to some fascinating Forbes articles on this issue, all of which I commend to you for more on this trend.