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Health Affairs Examines Exceptionally High Hospital Prices

posted by Alicia Caramenico

on June 9, 2015

Hospitals are charging exorbitant prices for services, and those markups continue to make health care coverage more expensive for everyone, according to a study published Monday in the journal Health Affairs. The study found some U.S. hospitals charge more than 10 times what Medicare pays for the same service in the same area, and these markups are hitting the uninsured and those seeking care out-of-network especially hard.

So what impact do high markups have on out-of-network patients and the cost of health care coverage? “Exceptionally high medical bills, which often lead to personal bankruptcy or the avoidance of needed medical services,” the study stated.

What’s more, these high hospital charges impact all of us, because hospitals can use them as leverage during negotiations with insurers and drive up the price of premiums. “We as consumers are paying for this when hospitals charge 10 times what they should,” Ge Bai, a study co-author and professor at Washington and Lee University, told Kaiser Health News.

The study reinforces the important role health insurance coverage plays in shielding patients from outrageous medical costs and getting the best prices for health care treatments. Every day health plans are working with hospitals and doctors to make sure patients receive the best value for their care.

One way health plans work to make hospital care more affordable is through provider networks. Consumers see measurable savings when they visit contracted providers because in-network physicians are generally prohibited from charging patients the difference between billed charges and the a negotiated rate. Consumers who receive services from in-network providers also have lower cost-sharing requirements.

With no way to protect patients who end up at an out-of-network provider from receiving exorbitant medical bills, hospital prices must be addressed if we are to ensure affordability in health care.