Hospitals rip off self-paying, poor customers with triple prices compared to insurance reimbursements

Monday, October 01, 2007 by: David Gutierrez, staff writer
Tags: health care costs, health news, Natural News

(NewsTarget) Hospitals in the United States have been charging self-paying patients, including the uninsured, vastly more for health services than they charge insurance providers and much more than the maximum costs allowed by Medicare, according to a 2004 study published in the journal Health Affairs.

"Over time, the uninsured have been paying higher and higher prices for hospital care compared to what the insured population pays," said study author Gerard F. Anderson, director of the Center for Hospital Finance and Management at the Johns Hopkins Bloomberg School of Public Health in Baltimore. "The markup on hospital care for these individuals, especially for those who can afford it least, are unjustifiable."

Anderson's study found that self-paying patients were charged an average of 2.5 times as much as insurers, and 3.07 times the Medicare-allowable levels. The markup was higher at for-profit hospitals (4.10 times) than at public hospitals (2.49), and higher at small urban hospitals (3.25 times) than at rural hospitals (2.42).

The price inflation varied by state, as well. The states with the highest markups were California, New Jersey and Pennsylvania, with charges four times higher than Medicare-allowable costs. The states with the lowest markups, at less than two times higher than Medicare, were Idaho, Maryland, Montana, Vermont and Wyoming.

Anderson also found that this price discrepancy has worsened over the years, more than doubling since the 1984 average of a 1.35 times markup over Medicare-allowable levels. In 1984, the study noted, hospitals charged approximately 35 percent more than their costs, which made their charges about 25 percent higher than their net revenue.

"Hospitals should do the right thing and lower the prices they charge the uninsured. Fifty years ago, the poor and uninsured were often charged the lowest prices for medical services. The markups on care for those who can least afford it have got to end," Anderson said.