There is no doubt that hospitals have been in the spotlight with regard to explaining why we spend 20 percent of our GDP ($2.8 trillion in 2013) on health care. Now this focus will likely get a bit more intense thanks to new data released by the United States’ largest nurse organization that show hospitals rip you off.

According to National Nurses United, U.S. hospital charges continue to soar with a handful of them, such as Meadowlands Hospital Medical Center in Secaucus, N.J., going as far as charging more than ten times the total cost — or almost $1,200 per $100 of the cost of care. Meanwhile, the hundred priciest hospitals in the nation were found to have this cost ratio begin at 765 percent, which is more than twice the national average of 331 percent.

Despite the Affordable Care Act becoming law in 2010 and subsequent initiatives to improve and better coordinate patient care in hospitals to lower costs, hospital charges recently experienced their biggest increase in 16 years, according to the nurse group’s analysis; fiscal year 2010-2011 to fiscal year 2011-2012 observed a 22 percentile increase, according to data that was analyzed by the nurse group.

“Such inflated practices continue to price far too many Americans out of access to needed medical care or expose them to financial ruin. It’s long past time to rein in the price gouging and recognize that a healthcare system based on profiteering puts all of us at risk,” Jean Ross, co-president of National Nurses United, said in a press release. Ross’ research arm, the Institute for Health and Socio-Economic Policy, carried out the research and has found that this trend in hospital costs have not changed since they started looking into it in 2002.

The nurse organization’s findings made several other observations that could fuel controversy. One of them concerns the fact that six of the nine costliest hospitals belong to two large chains, Community Health Systems Inc. and Health Management Associates. If these two conglomerates merge, as they intend to do, it is feared that prices will only increase further, the study noted.

Perhaps to no surprise, for-profit hospitals topped the list of those that charge the most, with 503 percent of the cost of care. Conversely, government-run hospitals exhibited more restraint by charging 235 percent of what it cost them to provide care. The study pegged this difference to the fact that the latter must work within tighter budgets as well as with greater transparency since public oversight and regulation is in place to prevent excessive pricing.

It’s often the case that hospitals don’t get paid as much as the price they list as patients manage to negotiate lower prices with the aid of the medical version of the Better Business Bureau. Thus, according to the study, hospitals argue that their list prices are actually irrelevant. “But it’s a defense that defies logic,” Ross argued. “The higher the starting point on a charge, the higher the ultimate reimbursement.”

This negotiation tactic is especially true for uninsured individuals, Ross added, since they have far less bargaining power and are thus often hit with the full list price. Relating to this issue is a 2013 study by a trade association that represents the health insurance industry, America’s Health Insurance Plans, which found exorbitantly high costs of physicians when they were billing patients who were out-of-network. According to the findings, the cost of procedures such as knee surgery, spine fusion, and brain scans were reaching prices that were as high as 100 times Medicare’s going rate.

“The lesson here is that the critical work of real healthcare reform is far from complete,” Ross concluded. “As long as our health continues to be held hostage by hospitals and other corporations more focused on profits than care, Americans will be at risk.”

 

Source: National Nurses United. Press Release, Jan. 6, 2014.