Hospital Charges Soar; Why?

Jun 3, 2014

Showing once again that hospitals' charges bear no relation to what a stay actually costs for most patients, Medicare officials on Monday released data showing sticker prices soared by four times the rate of inflation.

There are worrisome signs that actual spending is being forced up, as well, because of hospital systems' growing size. The bigger the hospital system, the more clout it tends to have in negotiating contracts with health plans.

The New York Times, reporting on this phenomenon, used the example of Wuesthoff Medical Center in Rockledge, a 300-bed hospital near Cape Canaveral. Originally a non-profit, Wuesthoff was bought in 2010 by Health Management Associates, a publicly traded corporation that was in turn bought by a larger corporation, Community Health Systems.

A year after HMA bought it, Wuesthoff's prices had soared from 12 percent below the national average to 32 percent above it, according to the Times. For example, the average charge for a patient with severe irregular heartbeat more than doubled, to $53,597.

A hospital spokeswoman, Sara Virgin, told the Times that the amount actually paid for services had not changed significantly, and that's what matters, she said. Virgin also said the uninsured -- the only ones who are billed the full charges -- receive discounts.