>> Chargemaster prices are set by the hospital alone and reflect what the hospital would like you to pay. They are the basis for calculating the discounts given to insurers, and they are generally what’s billed to people without insurance. These charges are commonly three times the Medicare price or more, but The Times reported that in the CMS data, some hospitals charged 10 or 20 times the Medicare price. The variation makes your head spin. The average charge for a joint replacement at a hospital in Ada, Okla., was $5,300. The comparable charge in Monterey Park, Calif., was $223,000.
IT should not make anyone's head spin.
These charges are designed to do two things:
a) Apportion fixed cost in a proprietary manner, according to a formula that is determined by the hospital. As a result, some hospitals charge $10 for an aspirin, while others charge $2. But all charge a lot. And,
b) To be written off. Fees must be set high enough that no insurance company, whether contracted or not, will pay the full amount; otherwise, they leave money laying on the table.
So, there is no surprise when charges vary widely.
The important point, however, is that this is NOT "cost", although these articles suggest otherwise. Seldom, probably never, do these $200,000 charges get paid. Even the uninsured, who technically owe the money, don't end up paying them.
And everyone discussing it knows this. But when these huge charges are discussed, there is almost always an agenda behind it. If a person really wants to discuss true cost of health care, they'll talk about the amounts that are actually PAID, not the amounts that are charged. |
