Why hospital bills are so high

The hospital said it offered Calver the opportunity to apply for financial assistance several times and that the "charges reflect the 'retail' price for a procedure, treatment, or visit. So how do medical bills get so high in the first place?

Elizabeth Rosenthal, editor-in-chief of Kaiser Health News, explains that the prices hospitals charge are "kind of arbitrary. It's important to keep in mind that Calver had insurance, too, Rosenthal points out. However, because the hospital where he was treated was out-of-network, he was subject to what's referred to as "surprise billing" in which normal insurance protections don't apply.

You have some agency. And, since each patient only brings in a small profit, each denial puts them in a financial hole. Their answer: lean harder on the patients who owe them money. How many ways is this system broken? As I said at the very beginning, one of the biggest problems with medical costs is that the real costs are so well hidden in all these games that almost no one even knows what they are, let alone what to do with them. This applies to doctors as much as patients.

We saw how patients can easily be confused into buying drugs for far more than they cost, just because they have insurance.

Doctors are run around just as much by the absurd system of insurance reimbursement. Now, we find that even the biggest players; the hospitals, are playing the same crazy games by the same crazy rules. But now it begins to really hurt the patients.

Then add the worry of a potentially crushing debt , simply because a mistake was made in billing or charting, or because your insurance company just wants to play games.

Hospitals often try to justify placing this burden on patients to make up for the financial problems the insurance companies give them. The insurance companies blame the hospitals, of course.

The irony of this is remarkable. How can hospitals complain about not being paid after doing so much in so many ways to discourage direct payment. 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.

And one major hospitalization can have a big impact on the bottom line. Savidge has had to spend a lot more time worrying about health care costs than he first anticipated. He even opened up an on-site pharmacy with lower cost medicines.

Over the last three decades, the cost of American medical care has more than doubled even after accounting for inflation, according to the Kaiser Family Foundation. And a lot of the burden has fallen on private employers, like Savidge, and those with individual insurance policies, says Gerard Anderson, a health policy professor at Johns Hopkins University.

The Medicare program sets the rates it will pay based on hospital costs. But private payers have to negotiate with every hospital and doctor. And Anderson says lack of competition is a big part of the problem. He says that mirrors metropolitan areas across the country. Anderson says another problem is that insurance companies may not even be motivated to rein in costs for many large, self-insured company plans because they earn a percentage of the bill.

Over the past three decades, hospital systems have been consolidating rapidly, merging with other hospitals and buying up physician practices. And when hospitals consolidate, prices go up.