Flaws in Our Health Care Pricing System | HSA for America Healthshare

“Uncompensated Care” Partially Responsible for Your High Health Care Costs

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Health care costs in America right now are the highest in the world, without a doubt. But how much higher is hard to say; prices for the same procedure in different parts of the United States can vary by thousands of dollars! Don’t believe me? A key example of this price discrepancy was revealed by the New York Times in a study they did last year. The study revealed that the price of a colonoscopy in New York was $8,600; 200 miles away, in Baltimore, the same procedure was $1,800 – almost $7,000 less! That is just one example of many.

Yet, price discrepancies of this nature aren’t the system’s only flaws. Did you know that all hospitals have a line item in their bookkeeping called “uncompensated care?” And did you know that hospitals in the U.S. brought in $41 billion for that line item alone?

So what is this “uncompensated care,” and why does the cost of it affect you? I’ll tell you why: because that $41 billion is “cost-shifted” to the negotiated rates with your insurer. You’re paying for that line item, whether you need “uncompensated care” or not.

Another flaw in our health care’s pricing system is the fact that not even the hospitals themselves know what you’ll be paying. A key instance exemplifying this – again brought to our attention by a New York Times contributor – reveals that one expectant mother asked her hospital how much maternity care would end up costing her. The answer: “Between $4,000 and $45,000.”

Why this big of a discrepancy, you wonder. It’s all dependent on how many $935 ultrasounds a soon-to-be mother wants; how many $256 scans she needs; whether she wants a $30,000 vaginal delivery or a $50,000 C-section. Yet, say the woman maps out exactly what she wants, what each procedure will cost her and totals it all up. Even then, she would more than likely be hit with a larger-than-expected bill, due to uncompensated care costs.

Again, where are these uncompensated care costs coming from? And what is being done about them, if anything? Check out this article from Forbes.com to see what they have to say about these hidden costs of health care: http://www.forbes.com/sites/danmunro/2013/06/09/healthcare-pricing-transparency-gains-momentum/

Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.
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