Sutter Hospitals Settlement

A large non-profit hospital chain settled a lawsuit alleging fraud in their pricing of anesthesia services.  It's interesting because

1)  It's another example of someone going after providers for what the medical world considers business as usual, but which the rest of the world considers fraud.  Oregon's justice department did this when they went after a pair of doctors for not disclosing they were paid by device manufacturers.

2)  It shows the importance of pricing.  Getting providers to disclose pricing isn't just about empowering patients to shop, it's about exposing hospital charges to scrutiny.  Nasty things breed in the dark, like $5,000 "anesthesia" charges for materials and service that cost the hospital $250.

3)  It's worth reading the allegations to get a sense of how messy the billing for a surgical procedure is, and how abusive Sutter's pricing was.  They are contained in a filing by the CA Department of Insurance which supported the suit, it starts on page 18 of the pdf.

4)  It's also worth thinking about the limitations of using lawsuits to control hospitals.  This suit caught one service out of many the hospital bills.  There is nothing stopping hospitals from simply shuffling costs to a different service code.  Or they might not even do that, the basis of the fraud claim was that the hospital was charging a time-based fee for a one-time service that had no time component.  The suit alleged the hospital was either trying to trick people into thinking it was the anesthesiologist's bill (that is billed separately by the anesthesiologist, see what I mean about messy billing) or they were charging for services they didn't deliver.  Hospitals could fix that by just charging a fixed cost that wasn't time based but was no less inflated, and that's essentially what they're saying they will do.

Lawsuits are better than nothing, but they are no substitute for regulation.