If you want proof of the deep irrationality of America’s health care system, look no farther than Florida. Of the 50 hospitals in America that mark up their prices the most, a full 40% are in Florida, according to a new study (paywall) appearing in the health policy journal Health Affairs.
Nationally, the prices listed in hospital charge masters (documents putting a price on all medical procedures and supplies used) are 3.4 times what the federal government lists as allowable costs under Medicare, meaning that patients at a typical US hospital would be charged $340 for a procedure which Medicare estimates costs $100. At North Okaloosa Medical Center in Florida, the hospital with the highest markups, they would be charged an estimated $1,260.
Forty-nine of the 50 hospitals with the highest markups are for-profit, and half are operated by one company, CHS (Community Health Systems). The average markup for hospitals on the list is more than 1,000% over what Medicare pays.
Most consumers never see these prices; there are layers of insurers, deals, and payers in between—not so for the uninsured, though, nor for out-of-network patients and casualty or workers compensation insurers. They typically get charged full freight.
In most places in the US, there’s essentially no limit to what hospitals can charge; only Maryland and West Virginia regulate markups.
“Collectively, this system has the effect of charging the highest prices to the most vulnerable patients and those with the least market power,” the authors of the study write.
Most uninsured people don’t end up paying the incredible markup dictated by a hospital’s charge master. But it’s the one that appears on their bill, and the one people are called about by bill collectors when they’re unable to pay. Potential consequences include personal bankruptcy, or avoiding needed medical care. Hospitals also use inflated prices to negotiate higher payments from insurers.
Some hospitals do have programs, purely voluntary in the case of for-profit hospitals, to help the uninsured afford treatment. But the markups they charge at the outset are another sign of how thoroughly divorced and opaque prices and cost are in the United States when it comes to health care. The average, uninformed consumer has no idea what he or she might be expected to pay, or how to compare it to what another hospital might charge.
Here are the 18 hospitals that mark up over cost by at least 1000%. The full top 50 are available at The Washington Post’s graphical breakdown of the study: