NEW YORK (MainStreet) — When people are ill and in need of hospital care, they are often unable to shop around for the best prices. Further, the closest or best hospital suited for their care may be out of their health insurance network. Some hospital systems and independent hospitals are taking advantage of this.
Some 50 hospitals across the nation are charging out-of-network patients, uninsured patients and auto and workers’ compensation insurers prices that are more than 1,000% higher than the costs allowed by Medicare, according to new research published in the June issue of the journal Health Affairs.
The researchers, Gerard F. Anderson of the Johns Hopkins Bloomberg School of Public Health and Ge Bai of Washington and Lee University, attribute the price-gouging problem to both the lack of federal regulation of hospital charges and the lack of market competition and say that the economic fallout trickles down to almost all consumers, whether or not they have health insurance. As a result, they argue, these sky-high prices play a role in the hike in overall health spending.
While the top 50 hospitals charged, on average, more than ten times the Medicare-allowed costs, other hospitals typically charged 3.4 times the Medicare-allowable cost, on average, in 2012. That means, for example, when a hospital incurs $100 of Medicare-allowable costs, it charges $340. In one of the top 50 hospitals, the charge would be $1,000.
“We as consumers are paying for this when hospitals charge ten times what they should,” Anderson said in a release.
“What other industry can you think of that marks up the price of their product by 1,000% and remains in business?” he asked. “There is no justification for these outrageous rates, but no one tells hospitals they can’t charge them.”
Anderson further expressed disapproval of exorbitant medical feeds.