Lawton Burns, Ozy.com, Hospital Costs
Lawton Burns is quoted in an article on Ozy.com about the rising per-patient costs in many hospital systems, particularly those that have been part of recent mergers and acquisitions.
The article asks why economies of scale don't seem to work in hospital systems and suggests that the reason is higher overhead costs and the integration of so many formerly independent physician practices into hospital systems. Ozy suggested that the latter drives prices up because hospital-affiliated physicians are expected to refer patients to the systems' "parent" hospital that maintains higher procedure prices.
But Burns, PhD, MBA, Professor of Health Care Management at Penn's Wharton School and LDI Senior Fellow, said that costs are higher in large hospital systems because those systems have more leverage to charge insurance companies higher prices.