CNBC: some hospitals marking up treatments by 1000%

[Angel Eyes]

(Political in the sense that Medicare/Medicaid are government programs)

http://www.cnbc.com/id/102745435

Some hospitals are marking up treatments by as much as 1,000 percent, a new study finds, and the average U.S. hospital charges uninsured patients three times what Medicare allows.
...
"We just want to raise public awareness of the problem," said Ge Bai of Washington & Lee University in Virginia, an accounting professor who wrote the study along with Gerard Anderson of Johns Hopkins University in Baltimore.
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Part of the problem is the convoluted U.S. healthcare system. Medical costs can be paid by private insurance companies, directly by employers, by government-funded systems such as Medicare or Medicaid, and directly by patients. Hospitals negotiate different rates with different payers.
...
 Hospitals did not used to mark up their charges so much.

"The increases began in the late 1980s and started to accelerate in 2000," Bai and Anderson wrote. "In 1984 the average charge-to-cost ratio was 1.35. In 2004 and 2011 the average charge-to-cost ratio was 3.07 and 3.30, respectively. The markup in 2012, therefore, represents a 10 percent increase from 2004, and 3 percent increase from 2011."

I'm interested in the input of APSers who work in the health care field.  Is the article essentially correct?

[MillCreek]

It would be accurate to say that some treatments, especially medications and medical supplies have a substantial markup, and uninsured patients pay the highest rates, since they do not get the insurance discounts.

[RevDisk]

It would be accurate to say that some treatments, especially medications and medical supplies have a substantial markup, and uninsured patients pay the highest rates, since they do not get the insurance discounts.

At some point, I'd really love to bribe you with a case of beer or other alcoholic beverage to see what you'd have to say about the best ways to reform or handle healthcare in the US.

[Northwoods]

This has been going for years.  Hardly new.

In reality cash paying customers should get a discount.  A) they're paying right away rather than sometime in the future like insurance company payments, B) there's no need to run it through a billing/coding service.

the average U.S. hospital charges uninsured patients three times what Medicare allows.

Also should point out that what Medicare "allows" has little relationship to what a service costs to provide, except that it is often less than actual costs. 

[cassandra and sara's daddy]

Ends at cost disparity is essentially absorbed by those of us aren't on Medicaid

[Pb]

When my wife was going to have our first child, I called the hospital to ask how much it would cost.  "$9000" I was told.   

"Oh you have insurance?  Then it will cost $5000".

How unbearably stupid.

[MechAg94]

I wonder if part of that markup is to try to get more uninsured patient reimbursement for patients who can't/won't pay.

I have heard that if you can negotiate cash payment, you can get better rates than insurance. 

[MillCreek]

A followup article on the study:

http://www.healthleadersmedia.com/content/FIN-317238/50-Hospitals-with-Extreme-Markups-Revealed

[MillCreek]

I wonder if part of that markup is to try to get more uninsured patient reimbursement for patients who can't/won't pay.

I have heard that if you can negotiate cash payment, you can get better rates than insurance. 

Both of these statements are true.  'Cost-shifting' is the term for charging some groups more in order to make up for collecting less (or nothing) from other groups.

[Firethorn]

In reality cash paying customers should get a discount.  A) they're paying right away rather than sometime in the future like insurance company payments, B) there's no need to run it through a billing/coding service.

My brother, while without healthcare, did need to get some services done.  Through the traditional art of 'bargaining' and solemn ceremony of 'cash on the barrelhead', he was often able to obtain discounts of half the price over even what the insurance companies paid.

The trick is that such works better for small medical providers - hospitals often can't even give you an estimate of what a routine procedure is going to cost ahead of time, they're so stuck in the 'figure it out later, and just bill insurance' mindset. 

During that time, what basically happened is that he was put in touch with what I'd call an 'cash friendly informal network'.  IE the doctor who accepted cash told him where to find a lab that accepted cash, so on and so forth.

In the end, I hate to say it, but between copays, deductibles, and everything else, my brother *probably* managed to get a broken arm dealt with cheaper than what the insurance deductibles would have cost him.