Some Hospitals Set Charges at More Than 10 Times their Costs

Despite increasing scrutiny on hospital pricing practices, some U.S. hospitals are charging more than 10 times their cost, or nearly $1200 for every $100 of their total costs, according to new data released by National Nurses United (NNU) and the Institute for Health and Socio-Economic Policy (IHSP).

The 100 most expensive hospitals listed charge 765 percent and higher, more than double the national average of 331 percent, the report says. Fourteen U.S. hospitals charge more than $1,000 for every $100 of their total costs (a charge to cost ratio of 1,000 percent) topped by Meadowlands Hospital Medical Center in Secaucus, NJ, which has a charge-to-cost ratio of 1,192 percent. California, with a statewide average of 451 percent charge to cost ratio, ranks third overall in the United States.

Other key findings in the report include the following:

  • Over the last 16 years, the single biggest jump in hospital charges was a 22 percentile point increase from fiscal year 2010-2011 to fiscal year 2011-2012.
  • Six of the nine most expensive hospitals are part of two big chains, Community Health Systems, Inc. and Health Management Associates, which are currently pursuing a controversial merger that critics charge would further drive up prices.
  • For-profit hospitals continue to dominate the list of those with the highest charges, averaging $503 for every $100 of total costs.
    By contrast, government-run hospitals, including federal, state, county, city, or district operated hospitals, with public budgets and boards that meet in public, exercise far more restraint than for-profit or non-profit corporate chains. Average charge ratios for government-run hospitals are just 235 percent of their costs.
  • Public oversight or regulation seems to help constrain excessive pricing. Maryland, probably the most regulated state in the United States, has the lowest average charges of all the states among its 10 most expensive hospitals.
  • The findings are based on publicly available Medicare Cost Reports as of June, 2013, covering the federal fiscal year that ended September 30, 2012, and include the most expensive hospitals, top 10 for each state, and the 50 most expensive hospital systems.

    Source: National Nurses United, January 6, 2014

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