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Hospitals Charge Uninsured Patients More, Study Finds

BY Admin  May 10, 2007 at 4:45 PM EST

Photo of patient courtesy of NIH

In 2004, U.S. hospitals charged uninsured patients more than two-and-a-half times the amount they charged insurance companies for the same services, the study found. Hospitals also charged uninsured patients more than three times the allowable costs specified by Medicare.

In general, hospitals set prices for services but then negotiate discounts with private insurers. They are also limited as to what they can charge patients covered by Medicare and Medicaid.

The study, which examined hospital charges between 1984 and 2004, found an ever-widening gap between what hospitals charge insured and uninsured patients. In 1984, the uninsured were charged 1.35 times as much as Medicare for hospital services; by 2004 that number had grown to 3.07 times as much.

More than 60 class-action lawsuits have been filed against hospitals over the issue, according to Reuters.

“Over time, the uninsured have been paying higher and higher prices for hospital care compared to what the insured population pays,” said Gerard Anderson, study author and director of the Center for Hospital Finance and Management at Johns Hopkins University, in a prepared statement. “The markup on hospital care for these individuals, especially for those who can afford it least, are unjustifiable.”

But critics called the study misleading and out of date, saying that the data it analyzes predate guidelines issued by the Centers for Medicare and Medicaid Services that allow hospitals to give discounts to uninsured patients.

“Before that, there was a lack of clarity as to whether hospitals could charge differentially,” American Hospital Association policy analyst Carmela Coyle told Reuters.

Anderson, the study author, told USA Today that it was unclear whether hospitals have lowered fees for low-income uninsured patients since the new guidelines were issued.

“I don’t know if hospitals have paid attention,” he said.

The study also found that hospitals are rarely able to collect the full amount that they charge patients. In 2004, they collected $39 for every $100 billed. From uninsured patients, they collected only about $10 for every $100 billed.

“Hospitals should do the right thing and lower the prices they charge the uninsured,” Anderson told HealthDay News. “Fifty years ago, the poor and uninsured were often charged the lowest prices for medical services. The markups on care for those who can least afford it have got to end.”

One point on which Anderson and AHA spokesperson Coyle agree, according to Reuters, is that providing health insurance coverage to more people would ease the problem.

“The real problem, of course, is that we live in a country where we don’t guarantee coverage for everybody,” Coyle said.