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Some Hospitals Charge Up to 1,000% Markup on Uninsured

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Friday, June 12, 2015   

RICHMOND, Va. - If you're going to break a leg, be careful where you do it. You might end up at a hospital that charges the uninsured as much as a 1,000 percent markup.

A list of the 50 hospitals with the highest price markups over actual costs is included in a new study published in Health Affairs. Ge Bai, the report's co-author and a certified public accountant, said some hospitals are marking up prices by an extraordinary amount for the same medical services.

"The hospitals are playing a price-gouging game," she said, "and this price gouging will trickle down to all consumers, whether you have insurance or not."

One of the hospitals named is the Southside Regional Medical Center in Petersburg, part of the Community Health Systems chain. The hospital pointed out that the study does not account for uncompensated care or reflect the price people actually pay.

The study found that hospitals are charging the uninsured, workers'-compensation and out-of-network patients more than 10 times the costs allowed by Medicare. Those are the patients with the least power to negotiate, said Bai, an assistant professor at Washington and Lee University, adding that people can't bargain when they're sick.

"So there's a big loophole in our hospital pricing system," she said, "and our policy makers need to understand that and step in, using their policy tools to help regulate hospital pricing and control overall health-care spending."

Since there is no regulation of hospital fees in most states and no market forces to compel hospitals to lower costs, Bai said, they charge higher prices because they can. The report also found that while for-profit hospitals represent only 30 percent of all hospitals in the United States, they account for 98 percent of hospitals with the highest markups.

The report abstract is online at content.healthaffairs.org.


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