Life can be as unpredictable as it gets. We always seem to know at least one person in the hospital, and we all end up there ourselves at some point. The older we get, the higher our chances are that we will check in for something more serious.
It’s common knowledge that hospitals, at least in America, shoot their bills through the roof. But how much does it really cost for an average hospital visit in 2019? And why have hospital bills risen over 176% in ten years (from 2007 to 2017).
Let’s start with average hospital prices. According to governing.com, hospital charges vary across the US. But some states with a largest population seem to have the highest average cost, including California and Texas.
Here’s a list of the top ten states with “the highest average aggregate rankings, indicating the most expensive medical cost:”
1) California (12% of the population)
2) New Jersey
4) Florida (6% of the population)
6) Texas (9% of the population)
10) South Carolina
Together, these 10 states make up about 38% of the whole US population. Most of America.
How much do you think these services should cost?
o ER (with insurance)
o ER (without insurance)
o Ambulance ride
According to The Balance, the average is:
o ER: $50-$100 (with insurance)
o ER: $150-$3,000 (without insurance)
o Ambulance ride: can be over $1,000, depending on the service
I’m not sure what you thought the prices would be, but that seems insane to me. Just to get to the hospital can be hundreds of dollars. No wonder people are getting Lyfts and Ubers in emergencies instead of ambulances. Before you’re already at the hospital, you’re in debt!
Even the New York Times reports that, “On top of that, [one] hospital, Newport Hospital and Health Services, was getting calls from confused patients who had received surprisingly large bills from the emergency room doctors.” The article goes on to talk about how high hospital bills have put people in debt when they are just trying to live a healthy life. Even towards the end, it is mentioned how health care just seems to be a mess and the process is slow.
So, why so much?
The answer may not be as simple as it seems.
During my research, everyone seemed to have their own opinions as to why health care costs are the way they are. They could be all right or all wrong. A few ideas overlapped, but it seems that no one knows exactly all the reasons as to why.
I’ll go through a few examples.
Drug costs are extremely high in the US. In most countries, “the government negotiates drug prices with the drug makers,” but in the US, Congress has passed a bill that denies Medicare the right to negotiate these prices. So, name brands get to add extra prices for their names. Want to compete? We need to raise our prices to match theirs, so we can make a larger profit. But then who can afford the medicine?
It’s all about who’s getting what money. And the hospitals seem to have zero control over that either. To pay their drug bills and their dues, they have to raise their prices even higher.
Administrative costs is another reason that a few places mention. According to CNBC, administrative costs “accounted for 8 percent of total national health expenditures in the U.S. For the other countries, they ranged from 1 percent to 3 percent.”
Also, have you considered how much doctors and nurses make? According to The Agenda, the US pays [doctors and nurses] more than twice…as other wealthy countries. Medscape even made a graph (which I provided down below) on how much physicians earn based on some of the wealthiest countries in 2019.
How crazy is that? The doctor down the street could be making 250 thousand dollars more than the average household income. (The average household income is about 63 thousand according to the U.S. Census Bureau.) That price effects your hospital bills.
Overall, the California Health Care Foundation predicted that health care spending is projected to increase about 5.5% per year between 2018 and 2027. That means in seven years, you could be paying 38.5% more for health care than you already do in 2020.
But there is some hope. New York times has reported back in 2017 that “California…passed a law setting a maximum amount that out-of-network doctors can charge patients. Other states, including Florida and New York, have also passed laws to limit surprise bills.”
Considering that California is the most expensive one of them all still, we have a long way to go.