Surgery Center of Oklahoma Blog

April 17, 2011

Cost shifting

Filed under: Uncategorized — surgerycenterok @ 2:00 pm

There is lots of talk about cost-shifting these days.  We have been told that big hospitals, for instance, increase the cost to those who can pay to cover their losses for those who can’t pay.  This is , of course, a situation that the big hospitals regret,  and they only engage in this slight of hand to the extent absolutely necessary without overdoing it.  Right?  We’ve heard “we have to take all comers in our emergency rooms and we lose money there.”  Or, “our emergency rooms are the clinic of last resort for the uninsured and most of them don’t pay.”


Why is there a crane in front of so many emergency rooms in the country, building on and remodeling?  If you ran a business and knew that some aspect of that business was losing money, would you expand it?

Why (with such shaky financial resources from having “lost” all of this money on the poor) are hospitals throwing serious cash around to buy competitors and build new hospitals and aggressively buying physician practices?  Could it be that “cost shifting” is a myth…a tool in the bag used to justify prices 6 to 10 times that of independent facilities like surgery centers?

G. Keith Smith, M.D.

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