Hospitals are charging people without insurance different prices than people who are insured, up to 5 times more than what they would charge Medicare for a procedure. Its one thing if a private hospital is overcharging but charity hospitals shouldn’t be doing this. Does anyone else think that this is unethical and totally uncalled for? Shouldn’t non-profits be providing care for reasonable price given the “charitable” nature of their organizations?
What hospital are you talking about, and is it a non-profit? Very few hospitals are actually non-profit (Shriner’s being the only one I know of). All hospitals must offer some ammount of charity care, but the hospital as a whole is looking to make a profit.
That being said, yes, I agree with you that hospital billing is a crock. They’ve become too controlled by the insurance companies, who hold them hostage by refusing to pay full price. Some of these “insurance deals” actually lose the hospital money on each treatment, and then the uninsured pay horrifically inflated prices to make up the loss.
It’s been said here before, but some people just don’t seem to get it - national health care would be cheaper for everyone. We spend more per person than Canada or England, and for (arguably) worse services.
The hospital’s defense here is that the individual is essentially paying retail, while the insurers are paying wholesale. It’s not a completely senseless argument. That said, individuals can often get the wholesale price by haggling. They just don’t often know to do so.
In a larger sense, hospitals stay afloat by routinely doing this kind of cost shifting. Medicaid rarely pays the full cost of care, so hospitals need to make the money up elsewhere – from the self-pay population, among others.
Is the overall system completely out of whack? Of course. We pay vastly more as a percentage of GDP than European countries do, and get less for it.
No, that’s not correct. Patients are charged the same rate as Medicare. If they have a Medicare contract, they then agree to accept Medicare’s contract rate and charge the patient 20% of Medicare’s approved amount. Except for lab; Medicare pays lab at 100%. Not sure if there’s any other specialty that gets paid at 100%. The same goes for other contracted insurances, including state medicaids, which only pay about 70-80% of Medicare rates. Considering that Medicare generally pays about 30-40% of gross, they depend rather heavily on volume for those patients to make their money, as well as the larger dollars paid by private insurances. Those (gross) prices are NOT set by the hospitals, incidentally. Give you three guesses who does set them. Can you name me any other business that automatically writes off 2/3 of their gross charges for the majority of their customers?
“Charitable”? Excuse me? Do you work for free? I certainly don’t. I get a great satisfaction out of my job, but I still have kids to put through college and a roof over my head. Hospitals have a huge overhead. Salary is the largest constant expenditure, even taking equipment into consideration. I’m not saying they don’t overcharge on certain things (coughtissuescough), but to say it’s unethical for hospitals to make a profit is just a bit naive. They’re a business, just like any other business.
As Maureen said, this is not correct. If you are a Medicare provider, you must charge everyone the same fee schedule. (I work for a physician, not a hospital, but the law is the same.)
However, when you are contracted with an insurance - Medicare or otherwise - you are generally required per contract to take an “in network” adjustment. For example (as I mention in this thread ):
To place an ear dranage tube ON ONE SIDE, our fee schedule charges $480 (for the surgeon’s fees). The Indiana Medicaid allowable is $113.80. (I know Medicare pays more, I just don’t have the allowables memorized for that.) Our commercial insurance contracts range from probably $175-$275 or so (estimates!!!) per side…but the 2nd side only pays at 50% of the allowable in most cases.
I’m not sure how it is with hospitals, but there are several things you can do if you’re a self-pay (uninsured) patient.
[ul]
[li]You can negotiate a fee with the doctor. In our practice, many times we will reduce what we bill the patient to an insurance allowable (i.e. Medicare).[/li][li]You can complete a hardship application. Most hospitals I’m aware of allow for this.[/li][li]You can pay the whole fee.[/li][/ul]
Yes, the system is broken. The uninsured shouldn’t have to pay more than the insured, but the insurance companies control the system (not the docs, don’t let the insurance propaganda fool you) and that’s the way they want it. Frankly, I’m not sure how ANY medical provider/facility makes a profit with the system the way it is.
Hell, sometimes you don’t even get cost. An item we provide regularly for our patients costs us $150 to purchase from the manufacturer. However, Medicaid pays $78 (approx.) and Medicare only a little more (maybe $88-$90). A large number of commercial insurance companies are going to a Medicare fee schedule in their provider contracts, so if the patient has that insurance, the provider isn’t going to get paid more than if the patient had Medicare instead. And Medicare keeps getting cut.
Frankly, medicine is the only business where you can go, receive services on credit, and then still have people who feel like you don’t deserve to be paid “because doctors get paid too much.”
sigh I’m going to get off my soapbox now as this is neither GD or the Pit.
Medicine might be the only business where people think doctors get paid too much, but customers pretty routinely decide that vendors of all sorts don’t deserve to be paid because they charge too much! I think every business has had run-ins with this sort of customer.
This statement says it all. I think because its an emotional issue, it’s hard to keep in mind that the medical profession isn’t a group of gods sitting around doling out health for health’s sake. My SIL is going through some major health issues, and she is being forced to sell her condo to pay for treatment. It doesn’t seem right to me emotionally, but logically, she has some money to pay for treatment, and she shouldn’t be exempt just because she’s uninsured. It will never cover all the costs, but the professionals are entitled to whatever she can pay.
Catholic Charity Hospitals are suppose to be non-profit yet as I said their overpricing is hardly charitable. Also, medicare helps but it doesn’t cover all costs and people who are uninsured cannot completely count on medicaid. The system is far from perfect i realize that, but the price gouging has got to stop just because you are one person and arent buying at wholesale like insurance companies.
This is not correct–many (I would guess more than 50%) US hospitals are non-profit entities.
Addressing also the common misunderstanding of what it means to be a not-for-profit corporation:
Non-profit entities do not have shareholders and therefore do not need to make a profit to continue to operate in the sense that other companies must make a minimum return for investors or face their wrath and the accompanying refusal of capital. Coupled with a charitable purpose (yes, this includes improving the health of the local community), these are the basic requirements to be formed as a not-for-profit corporation (official state label).
It does not mean that the non-profit hospital should not make enough of a profit to pay payroll, expand services, replace its building and equipment every 30 years, etc.
In other words, a non-profit hospital may have a profit on its operations in any given year, but it must reinvest these profits in its charitable purpose (providing health care) and no stockholder gets these profits.
Charity Hospitals are non-profit in this sense but unless they get enough donations or grants to fund operations, they must make enough money from operations to continue in business–many donations and grants will provide for the land/building, but the costs of operations generally must be funded by operational income.
Here’s the part that seems to be unique to health care and something I just don’t get. Supply and demand would lead one to believe that hospitals would stop buying the overpriced equipment form the manufacturer, and that the $150 gizmo would have to turn into a $70.00 gizmo right quick if the manufacturer expects to sell any.
In what other business would you buy something from a supplier for more than you know you can expect to sell it for?
See, some of those gizmos I believe can’t be made or sold much or any cheaper. Take medicine pumps, for example. Can you imagine the technology involved in taking a 2 mL sample of something and dividing it up into 2,000 EQUAL doses, to be administered at 15 second intervals? A person literally couldn’t measure something that small. And my daughter had, at once point, 6 pumps on her at once. Some patients have a dozen. That’s some expensive daily care.
It’s the $76 for a bottle each of advil, tylenol and and OTC stool softener to take home that pisses me off.
Dilution?
I’m sorry to hear that, Kalhoun. If you email me, I’d be happy to help you and her find assistance groups in her area. Usually the state medical association has programs for patients who are unable to meet their medical costs.
I apologize for the hijack.
WhyNot, our dialysis lab contracts with a lab for specific tests we don’t have the capability to do. We send those tests out to them, they charge us a specific amount. Even though their reimbursement rate is higher, we’re only allowed to charge the amount that we pay them for performing the test. No markup allowed.
I’m not saying that markups, even substantial markups, don’t occur. But for the most part, there’s justification for the pricing you see.
Do you possibly have a cite for this? I’m not sure that’s correct. Private institutions are dwindling, but that’s not due to non-profits taking over, it’s because of large health care corporations like Sutter and Good Samaritan (NOT non-profit) expanding nationally.
Or, come to Canada. You’re covered. 
True. As has been pointed out by several nurses/doctors on these boards from other countries, whenever there’s a conference discussing healthcare growth, everyone points to the U.S. and says “whatever you do, DON’T do it that way.”
Can’t dilute liquids going into a 620 gram infant. There’s only so much of any liquid a body that small can hold without going kerfluey. Other patients may have similar fluid limits, or there are other chemical reasons you can’t dilute to make easy to measure doses. My dad’s a neonatal Pharm. D. - he can explain it much better than I can, but unfortunately isn’t a Doper. But that’s what he told me when I made the same complaint about the cost of her per day care.
'Sides, is paying a registered nurse to administer a shot every 15 seconds really cheaper in the long run?
sigh
Everyone gets charged the same amount, as has been noted in previous posts.
Some insurers sign contracts with hospitals and other medical providers. These contracts compel the providers to accept a payment that is less than the billed amount. But the billed amount is exactly the same for EVERY patient.
And, of course, like any contract, there is a consideration for ALL parties to the contract.
In consideration of taking a reduction in payment, the provider gets:
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Limited competition. The insurer sets up “provider networks” and tells their insureds that, if they want their bill paid by the insurer, they can only use these providers. This cuts the competition down from every provider in the region to a limited few in the region. This also guarantees, in theory at least, a minimum census.
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The ability to send claims directly to the insurer. If the provider is not contracted, they are only sending claims on behalf of their patients as a courtesy. In this case, the provider has no relationship with the insurer. The insurer is obligated to send payment to the patient only (in many cases they are not obligated to honor any assignments of benefits) and the patient is the only one guaranteed any right of appeal in the event a claim is not paid or is paid incorrectly. The only party the provider can legally look to for payment is their patient. If there is a problem with the insurer, the provider has no legal standing to dispute or get involved with the settlement of the claim. When the provider signs a contract, they are now legally able to look directly to the insurer for payment and therefore have the right to submit claims, receive payment directly, and have the right of appeal. This is a very big deal since the majority of patients have no motivation to pay their bills, or see that their bills ever get paid in the event an appeal is needed, or any other intervention with the insurer, for that matter. This puts the provider’s A/R in their own control.
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A guaranteed floor payment - in other words, payment of claims in less than, say, 21 days - in full, less the contracted amount for “clean” claims. There are very, very few private parties that can match that. Hell, we regularly have patients wanting a full year to pay out their $100 bill.
But, also, despite that fact that almost no private parties can guarantee their providers that they can fill up their beds and waiting rooms, that they can pay their bills in full within weeks, and that any disputes will be given top priority, ANY private payer CAN negotiate a discount on their bills - as has been mentioned upthread.
I am a harsh critic of the current third-party payer system, but that doesn’t alter that fact that I am getting really sick of the “they’re charging us MORE!” hullabaloo.
Thanks, Maureen! Let me get my bearings here this morning and I’ll drop you a note. We need all the help we can get right now.
So, everyone gets charged the same amount, only some people don’t have to pay the same amount. That’s pretty much the same as everyone not getting charged the same amount.
I know when I get a statement from my insurance company, it shows the writeoff that the provider gave. When I get a bill from the provider, I pay only a percentage of the cost after that writeoff. Claiming that I’m being charged the same amount as someone uninsured isn’t reasonable to me. I and my insurance company are being charged the same less an enormous writeoff (generally speaking).