Are Hospitals Scamming us out of our Money?
Anyone that has stayed overnight in a hospital can tell you that the bill they later receive could easily equate to the price of a vacation. There is an idea that hospitals overcharge in order to simply just make more money from their patients. However, this is far from the truth. Although hospitals appear to be these big buildings where we all assume that each worker must make a good amount, this is not the reality.
There are two leading reasons as to why hospitals are almost forced to charge their ridiculous prices. According to Healthcare Consultants Inc., “insurance companies will negotiate [and the lack of] insurance” users in the hospital (Sharp). Insurance companies do not simply pay the amount that is on their client’s bill. There is a whole process of negotiation and the insurance companies are only willing to pay a certain amount that they deem reasonable for the treatment that their client was given.
However, several patients that have received treatment from hospitals simply do not have insurance. In that kind of situation, hospitals know that they will never obtain any kind of payment for that treatment. The fraction of patients that are uninsured is actually at ¼ of all patients. In order to make up for the lack of money being received from those situations, hospitals feel the need to increase prices for those that do have insurance that will pay the costs.
Government influence and regulation has and always will continue to have a large influence over the costs of healthcare. However, unlike the two reasons listed above, hospitals do not have any steps they can take to limit the influence of government interference. Two widely known government medical reimbursement programs are Medicaid and Medicare. According to American Health Policy, these programs reimburse at rates that “are lower than the average cost of serving those patients” (Troy). This has led hospitals to charge patients that are privately insured much more than the actual cost.
Sources used:
Kanopiadmin. (2017, May 9). How Government Regulations Made Healthcare So
Expensive: Mike Holly. Retrieved from
https://mises.org/wire/how-government-regulations-made-healthcare-so-expensive
Sharp, A. (2019, September 25). How Does Hospital Billing Work & Why Do Hospitals
Charge So Much? Retrieved from
https://hciamerica.com/how-does-hospital-billing-work-why-do-hospitals-and-providers-charge-so-much/
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