It’s the American way

Hospitals charge whatever they feel they can get away with. Also notice the amount actually paid.

The chargemaster can be confusing because it’s highly variable and generally not what a consumer would pay,” said Carol Steinberg, vice president at the American Hospital Association. “Even an uninsured person isn’t always paying the chargemaster rate.”

I don’t mind the variable rates which, despite the protests in the article, sure seem to be based on the income of the people using the facilities. What I mind is the black box approach. This is the price we say it will cost, this is the price we bill insurance, this is the price we say you have to pay and while there may be some relationship between all the numbers, it sure isn’t obvious.

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One response to “It’s the American way

  1. Hospital Bills $1,000.
    Insurance allows $800
    Contractual obligation (write-off) $200
    Insurance pays according to your insurance plan (percentage of Allowed Amount of $800)
    You pay coinsurance/copay/deductible.
    If a hospital researches (as they should) the average Allowed Amount for their major insurances, they can adjust their prices accordingly to charge more than that so they can make up their loss on patients without insurance. That’s basically how it works….