American patients pay outrageous amounts of money for hospital services, among the highest in the world. The American medical industry is robbing its patients on a large scale, and a new study illustrates just how large that scale is.
According to National Nurses United (NNU), the 100 most expensive hospitals in the U.S. average a baffling 765 percent markup above market cost. And in some instances, they mark up prices as much as 1,000 percent above the original market costs. The most expensive hospital, Meadowlands Hospital Medical Center in Secaucus, NJ, has a 1,192 percent markup above its total market cost. This absurd pricing further contributes to the financial problems that over-priced medical care causes for patients.
Community Health Systems Inc. and Health Management Associates are two large medical conglomerates that own six of the nine most expensive hospitals. Currently, these two companies are negotiating a merger. The study and news reports indicated that the merger could potentially result in further price gouging.
“The skyrocketing prices make premiums, co-pays and deductibles go up,” said NNU spokesman Charles Idelson. “Let’s be clear: This is price gouging. And the hospitals are doing it because they want to increase their profits.”
The American Hospital Association (AHA) discovered a correlation between rising prices and rising profits. The AHA said that in 2011, the hospital industry raked in $53 billion in profits. The NNU reinforces the fact that hospitals are not alone in overpricing. Big Pharma, medical supply companies, and outpatient clinics contribute to the crippling financial burden associated with American medical care.
Hospital bills make up one-third of America’s annual $2.7 trillion medical expense and pricing is the main engine behind medical expense inflation. Some of the most expensive hospitals charge over $12,000 a day for inpatient care and even the simplest of medical procedures can cost thousands of dollars. The New York Times reported that some hospitals charge up to $3,300 for stitches and drastically mark up drugs. A single Tylenol with codeine pill has a market price of $0.50, but the patient pays over $30.
Oversight of these hospitals exists; however, only a handful of hospitals regulate their pricing. The majority of hospitals that have regulated pricing are government-run and their markups average around 235 percent. Public groups have been effective at regulating hospital price gouging. Maryland is the most regulated state and has the lowest average hospital charges.
“The biggest irony of the U.S. health care system is that only the uninsured — often people who don’t have a lot of money — are the only ones the hospital expects to pay these incredibly inflated list prices,” said Robert Laszewski, a former health insurance company executive.
Sure, insured patients pay reduced fees, but the fees can still be quite costly. Compared to insured patients, the pricetag for uninsured patients is unthinkably expensive. Twenty percent of Americans under 65 are drowning in medical bill debt, and an estimated 2 million Americans filed for bankruptcy because of medical bills in 2013.
Joshua de Leon is a writer and researcher with Ring of Fire.