Fifty hospitals in the United States are charging uninsured consumers more than 10 times the actual cost of patient care, according to research published June 8, 2015.
All but one of the facilities are owned by for-profit entities and the largest number of hospitals — 20 — are in Florida. For the most part, researchers said, the hospitals with the highest markups are not in pricey neighborhoods or big cities, where the market might explain the higher prices.
Topping the list at number 34 is Lehigh Regional Medical Center.
Which is currently owned by Community Health Systems operates 25 of the hospitals on the list.
“They are price-gouging because they can,” said Gerard Anderson, a professor at the Johns Hopkins Bloomberg School of Public Health, co-author of the study in Health Affairs. “They are marking up the prices because no one is telling them they can’t.”
He added: “These are the hospitals that have the highest markup of all 5,000 hospitals in the United States. This means when it costs the hospital $100, they are going to charge you, on average, $1,000.”
[Is one of the hospitals near you? Explore the list.]
The researchers said other consumers who could face those high charges are patients whose hospitals are not in their insurance company’s preferred network of providers, patients using workers’ compensation and those covered by automobile insurance policies.
Understanding hospital pricing and charges is one of the most frustrating experiences for consumers and health-care professionals. It is virtually impossible to find out ahead of time from the hospital how much a procedure or stay is going to cost. Once the bill arrives, many consumers have difficulty deciphering it.
Most hospital patients covered by private or government insurance don’t pay full price because insurers and programs such as Medicare negotiate lower rates for their patients. But millions of Americans who don’t have insurance don’t have anyone to negotiate for them. They are most likely to be charged full price. As a result, uninsured patients, who are often the most vulnerable, face skyrocketing medical bills that can lead to personal bankruptcy, damaged credit scores or avoidance of needed medical care.
Researchers said the main factors leading to overcharging are the lack of market competition and the fact that the federal government does not regulate prices that health-care providers can charge. Only two states, Maryland and West Virginia, set hospital rates.
In the United States, hospitals have the charge master, a lengthy list of the hospital’s prices for every procedure performed and for every item used during those procedures, such as the cost of one Tylenol tablet or a box of gauze.
To determine the size of markups, researchers used what Medicare allows for the costs of care. That includes direct patient costs, such as emergency-room care, and indirect costs such as administration. It does not include private doctors’ costs.
Using data for all Medicare-certified hospitals between May 2012 and April 30, 2013, researchers tallied up total charges, then divided them by the patient care costs, which they defined as total costs Medicare agrees to pay.
“For-profit players appear to be better players in this price-gouging game,” said Ge Bai, an assistant accounting professor at Washington and Lee University and a study co-author.
Currently the 88 bed Lehigh Regional Medical Center is been sold to Prime Healthcare Services Inc., a California-based health care company known for acquiring financially struggling hospitals. The sale should close on February 1, 2016
In the meantime, Gov. Rick Scott is doubling down trying to convince lawmakers to issue stiff penalties against hospitals that charge high rates. This morning, he sent an envoy of supporters, including Chief of Staff Melissa Sellers, to presentation for members of the House Select Committee on Affordable Health Care Access. Mary Beth Vickers, the governor’s health care policy coordinator, made the case that hospitals are “price gouging” consumers by billing them at high rates. “Price gouging is not characteristic of a free market at all but it’s the most egregious example of price fixing,” Vickers said.