The Thousand-Dollar Toenail Clipping

Acccording to the Associated Press, Virginia Mason Medical Center in Seattle is now facing a class action lawsuit over its pricing policies. It began when Lori Mill had her toenail "clipped for fungus" at the medical center's downtown Seattle site. Her bill was $1133, including $418 for "miscellaneous hospital charges." The medical center justified these charges because its downtown complex is "licensed as a hospital," and hence "authorized by Medicare to charge higher fees."
A report in the Seattle Times showed that the medical center's physicians had previously complained about these charges. One physician, who himself had a procedure there, was charged more than a $1000 facilities charge. He wrote, "I call it obscene. There has to be some sense of appropriateness/fairness/reasonableness to our charges." Another doctor wrote on behalf of a patient charged a $754 facilities fee, "These charges are not only excessive, but an embarassment to me and the medical center."
This is yet another story about hospitals and medical centers charging fees that on their face are far more than the services rendered were conceivably worth. Why don't cost cutters target such fabulous fees, rather than the ever-shrinking reimbursement that generalist and cognitive physicians get?
(Note that Medicare is slated to cut all physicians' fees by 4.3% next year, while it raises the premiums patients pay by 12%. But such a cut, imposed on reimbursements that have not kept up with rising overhead rates, may drive some generalist and cognitive physicians out of the Medicare program. [See article in Philadelphia Inquirer here.] Yet apparently Medicare sanctions thousand dollar fees hospital fees for clipping toenails.)