National Nurses United, the largest nurses’ union in the nation, has released new data on the most expensive hospitals in the United States. The group found that hospitals services have been getting increasingly pricier over the past 16 years — largely because hospitals’ profit margins are getting bigger. According to National Nurses United’s report, a handful of hospitals charge patients 10 times more than the actual price of the services they’re receiving.
After analyzing data from 4,328 hospitals that submit mandatory Medicare cost reports each year, the nurses’ union found that prices have been inching up for nearly two decades, and experienced the biggest jump in between fiscal years 2011 and 2012. According to the report, the 100 most expensive hospitals in the nation have a charge-to-cost ratio of at least 765 percent. That’s more than double the national average.
Joan Ross, the co-president of National Nurses United, told ABC News that hospitals’ rising profits are often at the expense of Americans’ health. She pointed out that steep prices can dissuade people from getting the medical care they need. “If you are presented with a bill, and you know that bill is something you can’t afford, you’re not going to go in. You’re just not going to,” Ross pointed out.
Americans pay more for their health care than any other wealthy nation — but those high price tags don’t correlate to better care. In fact, earlier research into the subject has confirmed Ross’ point. One in three Americans say they’ve skipped out on care because it’s too expensive.
This issue got renewed attention at the beginning of this month after a Reddit user posted his $55,000 hospital bill online. His insurance provider picked up some of the cost, but he was still stuck with a $11,000 tab. “I never truly understood how much health care in the U.S. costs until I got appendicitis in October,” he wrote, along with an accompanying photo of his itemized bill. “I’m a 20-year-old guy. Thought other people should see this to get a real idea of how much an unpreventable illness costs in the U.S.”
There’s some evidence that greater price transparency can help correct this dynamic by spurring greater competition among medical providers. Allowing patients to shop around may dissuade them from choosing to patronize a more expensive hospital. And when it’s more clear exactly what health services cost, doctors may be less likely to recommend — and patients may be less likely to agree to — expensive and unnecessary tests and procedures. In its report, National Nurses United notes that “public oversight or regulation seems to help constrain excessive pricing,” pointing out that Maryland, which has a tightly regulated hospital system, has the lowest average charges of all the states.
The Obama administration hopes to continue to encourage this shift in the health industry. By extending coverage to the Americans who were previously uninsured, the health reform law intends to eventually cut down on hospitals’ uncompensated care — one of the reasons the American Hospital Association says it’s necessary to charge such inflated prices. This past May, the Center for Medicare and Medicaid Services (CMS) released first-of-its-kind data detailing the prices that hospitals charge for common procedures.