June 21, 2021
This past year has been a difficult one for American patients. Due to COVID-19 and the financial hardships that came with it, many struggled to make ends meet, whether it was paying the electricity bill or buying groceries.
However, the last thing people expected was outrageous upcharges and a lack of price transparency from hospitals in the middle of a global health crisis.
It’s common for most patients not to question the price tag of a bill from a hospital visit, but shocking recent data might encourage patients to do just that.
Last week, Axios reported several alarming studies that reveal hospitals’ abuse of the pricing system and negotiating process with insurers. The article clearly reflects how hospitals have taken advantage of patients during this vulnerable period.
The studies show that, on average, America’s top 100 hospitals charged patients seven times the normal cost of a service. Even worse, private, for-profit hospitals charged patients nearly twelve times markup on services in 2020.
This is an outrageous and unacceptable statistic.
Hospital industry officials continue to brush off these statistics and blame the marked-up prices on the negotiation process with insurers. Meanwhile, patients are forced to pay, regardless, and are faced with rising premiums and surprise medical bills for out-of-network coverage.
Another study by FAIR Health revealed that uninsured COVID-19 patients that received inpatient hospital treatment faced costs ranging from $42,000 to $74,000.
Patients shouldn’t be charged such outrageous markups for lifesaving treatments during COVID-19—or any other medical emergency for that matter.
In January 2019, the previous administration implemented a commonsense transparency rule requiring all hospitals to publicize their negotiation rates with insurers and “shoppable services.” Despite this, providers are still getting away with keeping this information behind closed doors.
A new study in JAMA Internal Medicine found that only 17% of hospitals were in full compliance with the rule, including just 25% of hospitals with the highest revenue. This is mainly because the consequences for noncompliance are so low—only a $300 penalty per day, at most.
Hospitals’ incentive to follow the rule is mere pocket change compared to what they make when they break it. And patients are paying the price.
If the disconnect between patients understanding their coverage and hospital charges still wasn’t clear, The Wall Street Journal recently reported that a national charity called RIP Medical Debt will pay for nearly $278 million of American’s medical debt directly from hospitals. This will cover the debt for an estimated 82,000 low-income Americans, most of whom should never have been billed in the first place.
While this is great news for patients who still owe money for the care they received, it is a chilling representation of how hospitals, and in this case nonprofit hospitals, are actively taking advantage of a complicated pricing structure and aren’t being transparent with those who need it the most, while reaping the benefits of federal, state and local tax breaks. When private charities feel obligated to insert themselves into our healthcare system, you know something has gone wrong.
It’s time that the Biden administration and lawmakers take this matter seriously and provide struggling patients with the clarity they deserve. Americans have already lost enough this past year. The last thing they should have to worry about is whether they should seek the care they need because of runaway hospital costs.
