Suppose that you are the business office manager of a 26-bed rural hospital. The chair of your governing body, who has served in that role for more than 30 years, is discussing with you possible ways to improve the hospital’s financial position. During the discussion, he asks you why you cannot increase the
charges to Blue Cross to cover the losses to Medicare, Medicaid, and charity care. He goes on to say that this strategy was used in the 1970s and 1980s, and he does not understand why it will not work today. What do you tell him?
Is there a relationship between cost and price for any given product or service in healthcare? Should there be?
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