Hospital Price-Gouging Widespread

[unhappycamper]

http://www.opednews.com/articles/Hospital-Price-Gouging-Wid-by-Sherwood-Ross-Charity_Emergency_Hospitalized_Medicaid-131204-374.html

Hospital Price-Gouging Widespread
General News 12/4/2013 at 11:31:47
By Sherwood Ross

~snip~

This is an expose about hospital profit-taking that has long deserved front page coverage. The Times provided that, thanks to Elisabeth Rosenthal's comprehensive reporting. Until yesterday, the outrageous billing practices of the nation's hospitals' has taken place largely in the dark.

Rosenthal opens with the story of Deepika Singh, 26, who gashed her knee at a backyard barbecue and the bill she got from California Pacific Medical Center(CPMC) of San Francisco came to $2,229. Then there was the case of Daniel Diaz, a public relations executive, who was billed $3,355.96 at Lennox Hill Hospital, N.Y., for five stitches on his finger. ($571.83 of the bill was charged for "application of a finger splint.&quot

Typically, the cost of treating a cut finger ranges from $790 in New England to $1,377 on the Pacific Coast. And that's just the emergency room, which has become a profit center, as at CPMC. "Once perennial money pits, emergency rooms have become big moneymakers for most hospitals in the last decade, experts say, as they raised their fees and 'managed' their patient mix," Rosenthal writes. Inpatients are also gouged.

"A day spent as an inpatient at an American hospital costs on average more than $4,000," Rosenthal writes. That's "five times the charge in many other developed countries," she continues, citing as her source the International Federation of Health Plans.

[JimDandy]

1. This matches up with

a story from yesterday of a woman who had 10 blood tests done at 2 different facilities that are 1 block from each other. One facility charged approx $1,500 more than the other for the exact same tests! The woman fought the bill for about a year before they adjusted it to a more reasonable charge.

[Scuba]

2. Weird hospital pricing is a product of our payment system. 95% of US hospitals are not-for-profit.

With a few notable exceptions, there are no stockholders getting dividends from hospitals. Any margin hospitals do make ("retained earnings&quot is reinvested in facility and equipment, not paid to owners.

That $500 stitch is the result of charity care for the uninsured and covering for losses on other services, not price gouging.

[hobbit709]

3. when they charge $10 ea for tampons like they did to my wife, they're gouging.

[Scuba]

4. They're doing it to cover for the free care they are required to give in the ER ....

... to all those uninsured patients.

Is it unreasonable to pay $10 for a tampon? Yes, but it's not unreasonable to pay $10 for a tampon plus part the cost of a service given to a charity case.

Nobody's getting rich off that tampon, the hospital is just staying in business. "No margin, no mission."

[R Merm]

11. Hospital executives are being paid up to 7 figure salaries. The money may not go to share holders

but there are people sharing in the profits from gouging.

http://www.newsobserver.com/2013/10/22/3303762/patient-satisfaction-not-quality.html

[Scuba]

13. I agree that some hospital execs are overpayed. Most are underpaid ...

... compared to what they can earn in the for-profit sector.

Compare the executive salaries at hospitals with those at insurance companies, for example. They're miles apart.

[rdking647]

7. non profit hospitlas spent 2% or less on charity care

the hospital in the ny times article spend about 1% on charity care

[Scuba]

14. Apples and oranges. That unpaid ER visit isn't categorized as charity, it's a straight loss.

[Paolo123]

18. Do you have any backup for your assertions?

[Scuba]

23. 30+ years as a hospital administrator

[Paolo123]

36. OK thanks

Certainly everything you said "rings true" however the article seemed to be saying that things were different now. Anyway, thanks for your comments.

[Scuba]

37. There's a concerted effort being made to confuse the public about healthcare costs.

Yes, there are bad hospitals. But the vast majority of community hospitals are not the problem with our healthcare mess.

[maindawg]

21. no it is not

It is paid for by medicaide. HCAP .

[Scuba]

24. Wrong. If the patient has Medicaid, that's an insurance payment.

[erronis]

28. Not for profit? Define what that means, please.

Does this mean that the administrators and top doctors don't make huge salaries?

Do they have in-house laboratories such as MRI that generate profits since the in-house entities are always used for tests and they are usually owned by groups of the doctors and other profiteers?

A lot of the dollars that are spent on "patient care" are actually spent on outside contracts to friendly companies. Look at the cost of the supplies that are adjusted way upwards from what you could obtain at your local drugstore.

Big business and pharma have started to force independent practitioners into these hubs of care where the costs and expenditures (and profits) can be easily managed.

I may just be skeptical (and I like being that way), but there are very few medical practices that can treat a low/mid-income patient at cost. Medical insurance burdens (paperwork and disputes) have been driving practitioners out of business or into these (non-profit) "medical centers".

Don't even get me started on the Cancer Treatment Centers of America - preying on the last hopes of individuals and their families (and their savings). http://www.democraticunderground.com/10022348750

[Scuba]

30. Certainly employees, which sometimes include physicians, get paid, but there are no owners that do.

Not-for-profit means that there are no stockholders being paid dividends when revenues exceed expenses (which includes the salaries of nurses, lab techs and others). Retained earnings are used to replace aging equipment, build new facilities, provide new services, etc., not to compensate investors.

It's important to distinguish between not-for-profit hospitals and other healthcare related business, such as medical practices (physician groups). There are for-profit hospitals in this country. Often these are specialty hospitals owned by doctors that cherry pick the easiest cases (think open heart surgery) to maximize profits while leaving the more difficult (and unprofitable) cases for the non-profits to handle.

What you're seeing in weird hospital pricing is not gouging for profits, it's "cost shifting" to remain viable. If Medicare/Medicaid/Commercial insurance is reimbursing a hospital less than cost for a particular Diagnosis Related Group (DRG) then they have to make it up somewhere or go out of business. Under the DRG system hospitals are paid a flat rate for based on the patient diagnosis, regardless of cost. This system was adopted by Medicare in 1984 and insurance companies shortly followed suit.

Ergo, jacking up hospital prices does not even result in more revenue!!!

[magical thyme]

31. exactly. thank you.

People seem to think that hospitals can provide free care to people who cannot pay without finding the money to pay for it from somewhere else.

Thre is no free care available. There is only robbing (or "gouging&quot peter to pay for paul.

[Scuba]

32. Amazing how many people still don't get this.

[sendero]

5. I would like a simple reform...

.... a law that says "for an individual without insurance, the price for services can be no greater than the lowest contractual rate paid to an insurer for the same service".

If Americans remotely understood how hospital billing and charges work, they would demand changes.

[greenman3610]

6. while I'm sure price gouging does occur here and there

it is far too facile for ignorant journalists (is there any other kind?) to simply list the price for some seemingly simple
gizmo or procedure, and then huff and puff about it.
The fact is, hospitals have to pay the salaries of a whole lot of extremely hard working people, people who do often unpleasant and brutally tough work for just decent middle and lower middle class incomes - and to do that, they often have to charge more for a band-aid than the cost of the band-aid. They have to charge so that someone is there to bring it to you and put it on.

[rdking647]

8. the hospital in the story has 28 execs making 1m a year

[freebrew]

9. And there you have it.

Paid executives are part of the CODB. Their salaries are part of that $10 tampon. If they start to make a profit, They just give themselves a raise.

Easy. See? You just have to think like a republic(how can I screw someone and get rich?).

[Scuba]

15. No, they don't "just give themselves a raise".

Typically the Board of Directors will have an executive compensation committee that determines what increases, if any, hospital execs will receive. Increases are usually based on meeting goals for things like quality, customer service and meeting the target margin.

[Fumesucker]

19. American medical personnel work five times as hard as those in other developed countries?

Because according to the OP, US hospitals are five times as expensive as those in other nations.

[erronis]

29. Well said.

[magical thyme]

33. do those other countries have some kind of single payer system?

because then you do not have some hospitals burdened with having to provide "free" care to people who visit the emergency room with no means to pay other than charging the insured more.

You also do not have grossly overpaid insurance people sucking dollars away from actual health care into their own pockets. (Dollars to donuts that insurance executives make way over a million/year).

[FarCenter]

10. You have to have insurance to get the insurer's negotiated rates.

The standard rates for uninsured walk-ins are extortionate, partly due to the fact that many uninsured walk-ins result in uncollectables.

[R Merm]

12. And once again

you are placing the burden on those least able to afford it. If they are poor there is help and if they are able they would have insurance. There is a reason why the number one cause for personal bankruptcy in the US is medical dept.

[FarCenter]

16. Of course, if I had the described cut or gash, I wouldn't go to a hospital emergency room.

My PCP's group has a walk-in facility for things like that.

Emergency rooms are for serious, sudden illnesses or accidents.

[R Merm]

22. This summer

I cut the tip of my finger off at around 5:30 on a Saturday. I know going to the emergency room was not the best idea, but it needed to be treated. I went to 4 or 5 different urgent care clinics all of them closing at either 5 or 3 pm on Saturdays. Having no choice I went to the e.r. and paid the higher prices. Sometimes there is no other option available. My costs were under $1,000.00 but that was with the negotiated BCBS rates ($5,000.00 deductible that I never go above). Under my old insurance, also high deductible but no contracted rates, it would have cost me more then double that.

There is no question that the system is unfair, one of our local non-profit hospitals was so aggressive on collections that they were going after peoples homes. How can actions like that be justified.

[FarCenter]

27. The local ones are open until 6 pm on the weekends

But cutting a part off your finger is more serious than a 5-stich cut and an ER visit is reasonable, particularly if there is a chance of reattachment.

[solarhydrocan]

17. k/r

[AllyCat]

20. My kid needed stitches for a gash on his head

We were "out of network" on vacation. The total cost of sitting in the ER for HOURS, some goofy juice, and 7 stitches was $3850

Thankfully, we did not have to pay more than our co-pay for out of network ER, but the principal of the thing made me insane. We had to talk to subrogation multiple times and then wait for my insurance to pay the bill (almost 6 months) at which point the out-of-network facility started pre-collection proceedings on us.

[Glitterati]

26. LOL, these are NOTHING

My ER bill last November was $15,000.00

I was in the middle of a thyroid storm with congestive heart failure.

They knew within 30 minutes that I had to be admitted, yet they took 5 hours to find me a room. Guess why......

Because they charge for the ER bed in 4 hour increments, so at 5 hours, I was charged for the bed ALONE for 8 hours. This is a large rural hospital 35 miles north of Atlanta. And, I was charged outrageously for a bed I had no control over how long I occupied, while my poor family waited for 5 hours worried sick.

Here's the corker - I asked the nurses how many patients they had on the floor. They had 3 patients (it was Thanksgiving weekend). So some one clue me in why it took 5 hours to find a bed?

[pediatricmedic]

34. I have a pretty good idea

on why it took 5 hours to get a bed. It wasn't really the bed, it is a staffing issue they have to deal with. They likely had to call another nurse in to accept the next patient. Some states have mandatory minimum staffing levels and others require a facility to have a written plan they must follow. Violating those rules can come with a pretty hefty penalty.

Staffing is our biggest problem right now effecting wait times for admissions and transfers. We run mandatory minimum staffing for both our nurses and doctors to maintain a safe environment. Staffing is also the single biggest cost of running a hospital as well.

[Glitterati]

38. So it took 5 HOURS to call in an on call nurse?

They must have flown one in from the west coast; it only takes 4.5 hours to FLY from Los Angeles, CA to Atlanta.

[Egalitarian Thug]

35. Not to worry, the capitalists are in charge. Take your case and extrapolate...

130,000,000 ER patients per/year "over-billing" a mere $100 yields an additional $13 B.

You know that administrators, dozens of redundant offices and positions under the amorphous 'administrative' classification, and then there are the very many 6 and 7 figure salaries handed out to those responsible for keeping the gravy train going all must be paid for and it ain't going to be paid by the parasites making the Big Bucks. It takes a particular psychopathy to justify murdering sick people for profit, but we don't seem to lack any qualified volunteers.

[Glitterati]

39. Oh, that was just the ER

3 days in the hospital was another $150,000.00.

[Egalitarian Thug]

40. But we mustn't upset the industry, else they will take their toys and go home.

The stupid and the evil are stacked so high around every aspect of health care in America, that the pile is visible from orbit.

It's not unlike the real estate industry from 2002 - 2008. Everyone in it knows what is being done, but they go along hoping it keeps going until they can get out with their bag of cash before it comes crashing down.