

50 hospitals charge uninsured more than 10 times cost of care - petethomas
http://www.washingtonpost.com/national/health-science/why-some-hospitals-can-get-away-with-price-gouging-patients-study-finds/2015/06/08/b7f5118c-0aeb-11e5-9e39-0db921c47b93_story.html

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Gustomaximus
It seems to me a reasonable fix would be to legislate hospitals have to set
open and fixed pricing for procedures/services for all. So no group/insurance
company discounts. Make them compete openly and without discrimination. Then
people/business can select fairly for non-emergency type treatments their
hospital on a level playing field.

That said, I'm fortunate to have lived in several countries that have great
universal healthcare. I thoroughly believe achieving this should be one of 3
key goals for any country.

~~~
ars
The thing that is driving this problem is that medicare pays less than it
costs for the service.

Hospitals have to make the money up somehow, so they bill everyone else
inflated prices. The insurance companies know the prices are inflated, so try
to negotiate them down.

Hospitals agree to be negotiated down since at least they make _something_.
And of course some insurance companies get a better deal (for various reasons)
than others.

What ends up happening is that everyone pays a different price, and
standardizing the price would only hurt the hospital.

This is completely unfixable so long as medicare pays so little.

Some people want to fix this with a single payer system, not realizing that
doing so would only make things worse. Either medical costs will go up for the
government, or hospitals will go broke. Neither outcome is acceptable to
people.

And that is how we ended up in the pathetic state we are in today.

~~~
guelo
That argumet doesnt make sense because hospitals are not forced to take
Medicare. It is a profitable business decision to take Medicare otherwise they
wouldn't do it.

~~~
ars
They sort of are forced to by community pressure. If they don't they lose
status, and are sent fewer patients, politicians criticize them, etc, etc.

They lose money on the actual procedures, but make it up in other ways, so
it's worth it for them in total.

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tsotha
I don't know why this is surprising, since it's purely an outgrowth government
policies. The state mandates hospitals provide certain kinds of care without
providing funds under EMTALA. That money has to come from somewhere, so it
comes from the patients who can pay.

Since insurance companies and the government can get negotiated rates (or just
dictate rates, in the case of the government) the only people left to squeeze
are people without insurance but with enough money to pay.

What this map is really telling you is which hospitals have large
concentrations of patients who can't pay for care. Before they shut down King-
Drew Medical Center in LA six out of seven patients couldn't pay their bill,
so if you showed up at the ER without insurance they were going to try to
charge you enough to cover the six people in front of you.

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rgbrenner
What makes this so much worse is that no doctor or hospital will tell you
upfront what something will cost.

So the uninsured go into one of these hospitals... can't compare prices, or
even find out what something will cost before they agree to it... and later
get hit with a ridiculously marked up bill.

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vparikh
Biggest problem is that in the US we keep trying to apply capitalism to
something that does not really fit the supply/demand model. __EVERYONE __will
get sick or injured, and at that point it is not a a luxury. When you get a
heart attack, it is not a choice weather you go to get medical attention.
Therefore you cannot run it as a free and open capital market.

Besides how is it that we are the wealthiest country the world has ever known
and yet we fail to provide the basics (health, education, and care for the
elderly) to our citizenry?

The root issue is the US will be forced to re-evaluate its blind allegiance to
capitalism as the end all be all system to regulate costs and provide
services. We need a more balanced approach.

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nrao123
Whenever I see examples of reported price gouging in sensitive industries like
Healthcare, I try & pull up the financials of the companies. Two of the
biggest owners of these hospitals are Hospital Corp. of America (Ticker= HCA)
& Community Health Systems (Ticker=CHY) (1)

The return on assets (ROA) for HCA is 6.9%:
[https://ycharts.com/companies/HCA/return_on_assets](https://ycharts.com/companies/HCA/return_on_assets)

The Return on Assets for CYH is ~1.9%:
[https://ycharts.com/companies/CYH/return_on_assets](https://ycharts.com/companies/CYH/return_on_assets)

This is compared to Google (11.9%), P&G (6.5%) & Walmart (7.9%)

For those not familiar with ROA, it is taken as Net Income/ Total Assets. This
should give you a rough idea on the return one gets on the assets / capital
deployed. The higher the ROA, the better the earning power.

So, in the case of HCA/CYH, if they are price gouging so much, why aren't they
generating far superior returns?

\----

Updated: Some people in the comments are suggesting that they are only price
gouging the un-insured population. But Return on Assets (ROA) metrics are
across the population base. So:

if we reduce the price gouging for the un-insured through regulation, then one
of two things

a) the return on assets (ROA) go down to uneconomical levels & hospitals go
bankrupt (2) - See examples

b) Costs for insured population (e.g. Medicare etc...) goes up to meet return
on capital requirements.

What is the tradeoff one needs to make?

\---

(1) _Officials at Community Health Systems of Franklin, Tenn., which operates
25 of the hospitals, and Hospital Corp. of America, based in Nashville, which
operates 14, said hospital charges rarely reflect what consumers actually
pay.[http://www.washingtonpost.com/national/health-science/why-
so...](http://www.washingtonpost.com/national/health-science/why-some-
hospitals-can-get-away-with-price-gouging-patients-study-
finds/2015/06/08/b7f5118c-0aeb-11e5-9e39-0db921c47b93_story.html)

(2) [http://www.beckershospitalreview.com/hospital-management-
adm...](http://www.beckershospitalreview.com/hospital-management-
administration/20-hospital-closures-bankruptcies-so-far-in-2014.html) _

~~~
rgbrenner
Because these prices only apply to the 13% of people that are uninsured. The
remainder have an insurance company that negotiates with the hospital on their
behalf.

~~~
nrao123
So- if we reduce the price gouging for the un-insured through regulation, then
one of two things 1) the return on assets (ROA) go down to uneconomical levels
& hospitals go bankrupt (1) - See examples 2) Costs for insured population
(e.g. Medicare etc...) goes up to meet return on capital requirements.

What is the tradeoff one needs to make?

(1) [http://www.beckershospitalreview.com/hospital-management-
adm...](http://www.beckershospitalreview.com/hospital-management-
administration/20-hospital-closures-bankruptcies-so-far-in-2014.html)

