For the majority of purchases a consumer will make, the transaction is usually a pretty simple affair. A product or service exists that you want or need. That product or service comes at a price. You pay the agreed price to the vendor and you walk away with the item.
In other cases, it’s a bit more complicated. Home and vehicle purchases, as well as other high-value items, generally involve some sort of negotiation. The two parties eventually reach an agreement and the transaction is concluded with a contract or bill of sale.
Then there’s hospital billing. Entire careers are built off of specializing in medical and hospital billing because of how complicated this arena can be. Costs vary depending on whether or not a customer has insurance and the type of insurance they might have. Costs vary based on location. Costs vary based on provider. Costs vary based on a seemingly endless list of variables that, in the end, can mean that one patient can leave a hospital having paid tens of thousands of dollars more than another patient in the same hospital who was there for the same reason.
Those that lack insurance tend to bear the brunt of this fiasco and they bear it in the form of price gouging. When a patient has insurance, the amounts that the hospital may bill are limited by the agreements that it has in place with the patient’s insurance company. The hospital might want to charge X for a procedure, but the insurance company is only willing to pay Y; and in most cases Y is much, much less than X.
A patient that lacks insurance has no such billing restrictions; and thus, protection. Open season is declared on their bank account and they become a walking, talking dollar sign.
50 hospitals across the country were exposed in a recent Washington Post story for the amount that they mark up and charge patients without insurance. Coming in at last place – the least bad of the worst – was Lake Granbury Medical Center in Texas. Their markup? 920%.
Markup is how profits are made. The cereal you buy at the grocery store was first purchased from the manufacturer by that grocery store. The grocery store then turns around and sells it to you at a price that is more than what they paid for it. This is normal and it is necessary for an economy to grow and thrive.
But imagine paying $15 or $20 for that box of cereal. Imagine paying $400 for a tank of gas instead of $40. These are the prices that come with markups approaching 1000% and that is what is happening at these facilities. Something that cost the hospital $100 becomes a $1000 item on a hospital bill.
Is 1000% markup even possible? It is, and it’s happening in the Philadelphia region. Patients without insurance unfortunate enough to find themselves at Crozer Chester Medical Center are subjected to a 1010% markup. Easton Hospital patients are treated to a 1040% markup. But those pale in comparison to the 1190% markup that happens at Chestnut Hill Hospital. At Chestnut Hill Hospital, an item that cost the hospital $119 is billed to the patient for over $1200.
Shameful doesn’t even begin to describe this.
Of the 50 worst price gougers in America, 7 of them are in the Philadelphia region.
- Chestnut Hill Hospital- 1190%
- Easton Hospital – 1040%
- Crozer Chester Medical Center – 1010%
- Brandywine Hospital – 990%
- Hahnemann University Hospital – 950%
- Phoenixville Hospital – 950%
- Pottstown Memorial Medical Center – 930%
When confronted about these practices, most price gouging hospitals will almost instantly cite their “charity.” They will tell you about the millions of dollars of discounts they’ve provided to those who could not afford to pay their exorbitant prices. What they fail to understand, however, is that a discount on a gouged price is not a discount.
Medical bills and health care continue to be among the nation’s leading causes of financial hardship and bankruptcy while the poor continue to suffer from a lack of insurance and access to quality medical care. How then is it that these hospitals and their administrators feel justified in continuing these practices? How do you ask someone who can’t afford the reduced premiums made possible by the Affordable Care Act to pay prices based on 1000% markups?
We anxiously await a response from any of our area hospitals on this list with a justification for their actions.