With the merger of SCL Health, the organization that controls St. Mary’s Medical Center, and Intermountain Healthcare recently approved, we reported that SCL is sitting on more than $1.5 billion in accumulated profits, but it’s not just SCL taking in large profits. Colorado’s hospitals as a whole rank among the worst offenders in the nation.

This is an intolerable situation.

The Colorado Department of Health Care Policy and Financing’s annual Hospital Insights Report shows Colorado hospitals posted a combined $1.4 billion profit in 2020 and ranked in the top 10 for all four measured categories, according to reporting by The Daily Sentinel’s Charles Ashby.

According to the report, the high profits are due in part to higher reimbursement rates from the state’s Medicaid program and health care coverage expansions. These programs were created to help lower Colorado’s uninsured rate and the cost of health care to patients.

The hospitals asked for the reimbursement rates to increase so they could lower health care costs, claiming that the low reimbursement rates and high uncompensated costs for charity care were keeping costs high. But Colorado hospitals didn’t pass on any of those benefits to patients; they just pocketed the extra dough.

“This means Colorado hospitals are overcharging commercial insurance carriers – and therefore their employer and individual clients – more than they need to cover the underpayments of public programs,” the report says.

Nationally, hospital companies are awash with money. Americans pay $4,000 more for health care than consumers in any other country. So what do we get for that extra cost? Mediocre outcomes in terms of measurables like infant mortality and life expectancy. Pay more, get less.

Health care in the U.S. has reached a point of unsustainability. It is not subject to the same market forces that moderate pricing in other industries, so the industry can continue to turn the dial on pricing without impairing demand. It’s not just hospitals, though hospital pricing is the main driver of health care costs.

This kind of behavior invites new regulation that may not please the health care industry. Medicare-for-all or Berniecare would be disastrous on many levels, but the health care industry is painting itself into a corner as its gluttony abides no limits.

Instead of a drastic knee jerk response like Medicare-for-all, how about Medicare-rates-for-all?

Hospitals, Big Pharma and doctors could charge anything they want, so long as those rates are no higher than Medicare reimbursement rates (or some established percentage thereof). The public and private sector would compete on an even playing field.

Medicare-rates-for-all would leave the existing insurance system in place, but the pricing cap would exert downward pressure on hospitals, Big Pharma and highly compensated specialists. By removing price as a factor, it would force competition over things like quality of care, efficiency and patient outcomes. Because the private sector always outperforms the government on innovation, ingenuity, customer service and efficiency, those issues would become bigger factors in the system.

It’s clear something needs to be done to stem the flow of profits into our hospitals. In the end, we just hope the winning ideas preserve choice and squeeze prices for patients.

Grand Junction Daily Sentinel editorial board