50 US hospitals overcharge uninsured by 1000% - study

Reuters / Philippe Wojazer
Fifty US hospitals charged uninsured patients an average of ten times more than they should have to provide medical care in 2012, a new study found. This equates to a patient who’s treatment should have cost $100, having to shell out $1,000.

The research, published in Health Affairs, found that all but one of the hospitals was a for-profit operation. Forty percent of them are located in Florida, and that most of the hospitals were owned by larger corporations, such as Community Health Systems, which operates half of the 50 hospitals with top consumer costs. Hospital Corp. of America operates 14 of the hospitals on the list.

“They are price-gouging because they can,” said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health and co-author of the study, according to The Washington Post. "They are marking up the prices because no one is telling them they can’t.”

Source: Health Affairs

The study used Medicare data between May 2012 and April 30, 2013 to analyze hospitals that charged more than 10 times their average costs. They took the total charges of a hospital and then divided by the patient care cost. This was then defined as the total costs Medicare paid out for those holding the government-subsidized insurance policy.

“These are the hospitals that have the highest markup of all 5,000 hospitals in the United States," Anderson added. "This means, when it costs the hospital $100, they are going to charge you, on average, $1,000.”

Outside of those with Medicare or Medicaid, the study's authors said the high costs negatively impact all health consumers, including the uninsured, those with private insurance forced to visit out-of-network hospitals, and anyone who pays premiums, as high medical costs boost the price of health insurance. Patients using workers' compensation and those covered by automobile insurance are also disproportionately affected, the study found.

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“Collectively, this system has the effect of charging the highest prices to the most vulnerable patients and those with the least market power,” Anderson and co-author Ge Bai, of Washington and Lee University, wrote. The results are “exceptionally high medical bills, which often leads to personal bankruptcy or the avoidance of needed medical services.”

The most expensive hospital was North Okaloosa Medical Center in the Florida Panhandle. The hospital charged uninsured patients an average of 12.6 times the actual cost of care. New Jersey’s Carepoint Health-Bayonne Hospital had the same rate, but the state requires discounts to be provided to some uninsured patients.

In comparison, the average US hospital charges 3.4 times the cost of patient care.

Maryland and West Virginia are the only states that regulate hospital mark-ups, the study found.

Source: Health Affairs

Community Health Systems, which reported revenue of $4.91 billion in the first quarter of 2015, disputed the study's findings, saying that it relied on a pricing list that is rarely followed.

"Last year, our organization provided over $3.3 billion in charity care, discounts and other uncompensated care for those who can't afford health care services," spokeswoman Tomi Galin told the Associated Press.

The Federation of American Hospitals added that the hospitals in question offered about $450 million in uncompensated care in 2012.

The study came about after co-author Bai received a hospital bill following the birth of her son.

“I realized that I could not understand the bill,” Bai, a certified public accountant, told the Post. If she could not understand it, how could the average person?

"We do not understand the bills for this, our most valuable asset,” she said. “This is ridiculous and sad.”