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Top 10 Hidden Facts About Hospital Prices

By Admin | July 11, 2023

Hospital prices are confusing to patients. What will you owe? Why is it so expensive? Why are the bills so complicated?

Here are the top 10 hidden facts about hospital prices that answer those questions.

1) Hospital cross-subsidization – Hospitals are paid much less by Medicare and Medicaid from the Government than by commercial insurance companies. Hospitals cannot raise prices to the Government, but they can to insurance companies. Therefore, hospitals constantly raise prices to health insurance companies to ‘Cross-Subsidize’ (i.e. make up for) the lower prices they are paid by Medicare and Medicaid.

2) Hospital accounting – The vast majority of hospitals in America do not know what it costs them to deliver each particular medical service. Gallbladder surgery? A single MRI of the brain? Heart catheterization? A hospital does not know what each of these costs. The reason is because most hospitals in America do not perform ‘Activity-Based Cost Accounting.’ The majority of costs in a hospital are labor. Therefore, in order to measure the cost of a service, the amount of TIME each doctor, nurse and technician spends on the care must be measured. Most hospitals do not measure the time spent on each ‘Activity’ and accordingly, do not know what each service costs.

3) Complex patient care financial impact – Highly complex patient care such as in the Intensive Care Unit and complex surgeries like Coronary Artery Bypass Grafts make up the majority of a hospital’s own costs. However, these costs are generated by a relatively small percentage of the hospital’s patients. Approximately, 80 percent of a hospital’s costs are...(More)

For more info please read, Top 10 Hidden Facts About Hospital Prices, by MedCity News

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