These Hospitals Give Care That Costs $100, Charge $1K

Hospital pricing is a murky business, and a study published in Health Affairs this week tries bring clarity to an ugly part of it: "price-gouging," as study co-author Gerard Anderson puts it. Of our 5,000 hospitals, researchers identified the 50 with the highest markups, ones that charge uninsured consumers roughly 10 times their Medicare-allowable costs. "This means, when it costs the hospital $100, they are going to charge you, on average, $1,000," Anderson tells the Washington Post. The national average, per the study, is 3.4 times. All but one of the 50 is a for-profit hospital and 40% of them are in Florida; North Okaloosa Medical Center in Crestview, Florida, tops the list, charging uninsured patients 12.6 times the actual cost of care.

Who gets hit? Most government and private insurers negotiate rates on behalf of patients, leaving uninsured patients "commonly asked to pay the full charges"; ditto those seeking treatment out-of-network and workers' compensation insurers. The Federation of American Hospitals—a trade association for for-profit hospitals—along with a number of hospital officials call the study one-sided, note that discounts are regularly offered, and say that what's charged isn't typically what's paid. FAH tells the Post the 50 hospitals flagged by the study provided nearly $450 million in care in 2012 without compensation, which "would have had a significant effect on the charge-to-cost-ratio reported, and therefore the implications of the study's results." Anderson's response? "Clearly they expect someone to pay these inflated prices." (More hospital stories.)