But when they must negotiate with a single payer, like the federal government, there's more pressure to meet the demand in order to sell their services. For example, a recent study found that private insurance companies paid almost two and a half times what Medicare would've paid for the same medical service at the same facility.
To make matters more costly, the U. While the U. This means that, again, there's little to no incentive for them to lower costs since patients don't have much of a choice. What's more, health care providers are paid, on average, much more in the U. While she happily writes about a range of topics, from pop culture to politics, she has a special interest in in-depth health coverage, especially COVID research, women's health and racial health disparities. IE 11 is not supported. For an optimal experience visit our site on another browser.
Share this —. Follow today. More Brands. By Maura Hohman. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Biden Policies. Biden's Team. Personal Finance Issues of Economic Issues of Table of Contents Expand. Costly Healthcare Hurts Everyone. Multiple Systems Create Waste. Drug Costs Are Rising. Doctors and Nurses Earn More.
Hospitals Are Profit Centers. Defensive Medicine. Prices Vary Wildly. The Bottom Line. Key Takeaways The events of the past 18 months have increased pressure on our highly complex and expensive healthcare system, making it more urgent to lower costs. One reason for high costs is administrative waste. Providers face a huge array of usage and billing requirements from multiple payers, which makes it necessary to hire costly administrative help for billing and reimbursements.
Americans pay almost four times as much for pharmaceutical drugs as citizens of other developed countries. Hospitals, doctors, and nurses all charge more in the U. In other countries, prices for drugs and healthcare are at least partially controlled by the government.
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Related Articles. The price lists, known as chargemasters, typically name services using billing code jargon rather than plain English descriptions, 51 and the information is neither standardized nor centralized, making side-by-side comparisons difficult. The growing market power of hospitals and large physician practice groups warrants greater antitrust enforcement to protect consumers and competition.
For too long, hospital mergers that harm competition and raise prices have been allowed to slip through. The Federal Trade Commission and the U. Department of Justice need greater resources in order to monitor the large volume of mergers in the health care industry.
Medicare payment rules have generally paid higher rates for a service when delivered by a hospital than in another setting. In some cases, this means that Medicare is currently paying too much for services that could safely and effectively be performed by other providers or facilities.
In addition, the differential between hospital and nonhospital rates financially incentivizes hospital systems to acquire physician practices, thereby leading to greater consolidation among providers. Medicare payments for procedures that can be safely performed in nonhospital settings such as ambulatory surgery centers or physician offices should not stack the deck in favor of hospitals.
The variation in hospital prices across markets, across payers, and over time demonstrates that many Americans are paying more than needed for hospital care. The industry overall remains highly profitable and, after decades of rapid consolidation, exercises tremendous power over payers in many markets.
The rise in hospital prices, in turn, continues to drive up premiums and cost-sharing for patients, hitting individuals who have commercial insurance the hardest. Serious efforts to control health care costs will require addressing the largest sources of U. Hospital payment reform is needed to lower costs and improve equity among patients and among payers.
Prior to that, she worked at U. She holds a Ph. This publication was made possible in part by a grant from the Peter G. Peterson Foundation. The statements and the views expressed are solely the responsibility of the Center for American Progress. Data are for fiscal year , the most recent year for which the CMS has a nearly complete set of hospital cost filings. The CMS audits only a small portion of the HCRIS reports for data related to hospital financing, and thus many data fields in the cost reports contain unreasonable values and other errors.
Although hospitals are required to file cost reports annually, some reports contain more or less than 12 months of data. Thomas Waldrop. Emily Gee. Thomas Huelskoetter , Emily Gee.
In this article. InProgress Stay updated on our work on the most pressing issues of our time. Prices depend on where you live Geographic variation in health care expenditures is well documented. Policies to reduce the cost of hospital care. Ending abusive hospital billing practices At a minimum, congressional and state legislators should act to stop the one of the most egregious billing practices associated with hospital care: surprise billing. Reference pricing Short of broad-based government action on hospital rates, individual payers can take steps to cut the cost of hospital care through reforms such as reference pricing.
Hospital price transparency One popular response to the opacity and variation in hospital pricing has been to call for more public information on pricing. Andrea M. Sunita Desai and J. People of the state of California ex rel.
Xavier Becerra v. Examples of nonoperating revenues and expenses for hospitals include those related to parking lots, gift shops, donations, public appropriations, and investments. Andrew S. Austin B. You Might Also Like. Feb 22, Thomas Waldrop. Sep 20, Emily Gee. Jun 9, Thomas Huelskoetter , Emily Gee. Jan 18, Jamila Taylor.
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