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Morning Briefing

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Tuesday, Jun 9 2015

Full Issue

Study: Some Hospitals Mark Up Prices More Than 10 Times Their Actual Costs

All but one of the 50 hospitals noted in the study for charging uninsured customers at this rate were owned by for-profit companies.

Fifty hospitals in the United States are charging uninsured consumers more than 10 times the actual cost of patient care, according to research published Monday. All but one of the these facilities is owned by for-profit entities, and by far the largest number of hospitals 鈥 20 鈥 are in Florida. (Sun, 6/8)

U.S. hospitals charged on average more than three times the Medicare-allowable costs, according to a study in the June issue of the journal Health Affairs. The study uses 2012 Medicare data to examine hospitals that charge on average more than 10 times their costs. The study comes amid a national push to increase transparency in hopes of curbing rising health costs. (Kennedy, 6/8)

That doesn鈥檛 mean all or even most patients end up paying those charges. Private insurers are able to negotiate the sticker price down significantly. Patients paying out of pocket can often negotiate discounts or get charity care if they are low-income. (Gold, 6/8)

Even the astronomical price markups that consumers regularly pay for, say, wine in restaurants pale beside those in some U.S. hospitals: The price for procedures is often 10 times the cost, according to a study published on Monday in the journal Health Affairs. Of the 50 hospitals with the highest markups, 49 are for-profit, including 25 owned by Community Health Systems. (Begley, 6/8)

Americans pay higher prices for health care for a number of reasons. One is that some hospitals charge rates far higher than normal in the industry "because they can." That's according to Gerard Anderson, a professor in health policy and management at Johns Hopkins Bloomberg School of Public Health, who co-authored a study that appeared Tuesday in the journal Health Affairs. (Sherman, 6/8)

In the great debate over why health care costs so much, some have pointed to inflated hospital charges, while others say those sticker prices don't really matter. What is clear, however, is that Southeastern Pennsylvania has a significant cluster of high-price-tag hospitals. (Sapatkin, 6/9)

Meanwhile, The Wall Street Journal reports on a separate study regarding hospitals -

The new study, which focuses on patients who were on ventilators, echoes findings in an analysis by The Wall Street Journal that broadly examined long-term-care hospital claims paid by Medicare and found the same pattern across all types of patients. In the new study, the researchers said their findings 鈥渃onfirm that鈥ayment policy created a strong financial incentive for long-term-care hospitals to time patient discharges to maximize Medicare reimbursement.鈥 (Wilde Mathews and Weaver, 6/8)

And in other hospital news -

Health systems that own an insurance plan鈥攁n increasingly popular gambit鈥攈ave good reasons to be in that business, such as diversification and gaining market share. Indeed, some of those plans have done well for many years. But new entrants have cause to be wary. Operating performance 鈥渨ill be more volatile鈥 as health systems buy or launch health insurance plans, analysts at Standard & Poor's conclude in a report. The rating agency said extraordinarily poor performance by health plans could drag down health system credit ratings, although that hasn't happened yet. (Evans, 6/8)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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