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The Incredibly Tall, Marked-Up Hospital Bill

You know that feeling you get after reviewing the new charges to your cable or cell phone bill that can’t be explained? In too many of these situations, the easiest option is to just bite the bullet and pay it in full, because the provider’s explanation only infuriates you more and the charges probably won't be removed anyways. Does that situation sound familiar?

Well that is exactly what many hospital patients around the U.S. have been experiencing recently, financially cornered by unjustified mark-ups for healthcare services that were, not too long ago, literally thousands of dollars cheaper.

A recent article published in the Huffington Post blows the lid off of this trending inflation in hospital services by shining light on a new study - published in the Journal of Health Affairs earlier this month - finding proof these “ghost” charges not only exist, but appear to be happening all over the country without discrimination of coverage type, or tax bracket.

Hospitals apparently mark up higher in the departments with more complex services, because it is more difficult for patients to compare prices in these departments,” said Ge Bai, who led the study and is an assistant professor at the Johns Hopkins Carey Business School.

The only services immune to these high mark-ups make a very short list of non-technology-based services, including traditional physical therapy and nursing.

According to the study, the long list of high-tech services - such as CT scans, MRIs, and electrocardiology - provides the perfect opportunity for hospitals to hike prices way up considering the original price for services listed on their master ‘menu’ list for services - known as the chargemaster.

There is no regulation that prohibits hospitals from increasing revenues,” says Bai. “The problem is when they raise rates on people that have no ability to say no because they have an emergency and cannot compare prices.” This includes uninsured and out-of-network patients, “because they don’t have bargaining power against hospitals,” he added.

These unchecked charge-to-cost ratios range from 1.8 and 28.5 across different departments of patient care, and and for-profit hospitals were associated with a 2.30 and a 2.07 higher charge-to-cost ratio than government and nonprofit hospitals, respectively, according to the study. For example, the study found that hospitals whose costs for a CT scan run at about $100 may charge a patient $2,850 for a CT scan.

The consequence of unjust price hikes suffered by patients has lead to huge debts that are often times impossible to pay, and have led some patients straight to financial destitution. The charge-to-cost ratios must be given a higher priority, for the sake of patients, physicians, and the healthcare system as a whole.