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Hospital Price-Gouging Widespread: N.Y. Times

Hospital Price-Gouging Widespread: N.Y. Times

by Sherwood Ross
December 5, 2013

Quick, will somebody, anybody, please nominate The New York Times for a Pulitzer for yesterday's (Dec. 3) story "As Hospital Prices Soar, a Single Stitch Tops $500"!

This is an expose about hospital profit-taking that has long deserved front page coverage. The Times provided that, thanks to Elisabeth Rosenthal's comprehensive reporting. Until yesterday, the outrageous billing practices of the nation's hospitals' has taken place largely in the dark.

Rosenthal opens with the story of Deepika Singh, 26, who gashed her knee at a backyard barbecue and the bill she got from California Pacific Medical Center(CPMC) of San Francisco came to $2,229. Then there was the case of Daniel Diaz, a public relations executive, who was billed $3,355.96 at Lennox Hill Hospital, N.Y., for five stitches on his finger. ($571.83 of the bill was charged for "application of a finger splint.")

Typically, the cost of treating a cut finger ranges from $790 in New England to $1,377 on the Pacific Coast. And that's just the emergency room, which has become a profit center, as at CPMC. "Once perennial money pits, emergency rooms have become big moneymakers for most hospitals in the last decade, experts say, as they raised their fees and 'managed' their patient mix," Rosenthal writes. Inpatients are also gouged.

"A day spent as an inpatient at an American hospital costs on average more than $4,000," Rosenthal writes. That's "five times the charge in many other developed countries," she continues, citing as her source the International Federation of Health Plans.

The most expensive hospitals are gouging patients more than $12,500 a day! Not only are Medicare and Medicaid getting stupendous, inflated bills, but by disguising themselves as non-profit institutions, America's hospitals avoid paying their fair share of taxes. "Most nonprofit hospitals, like these California ones, have tax-exempt status despite hefty net incomes and little spending on charity care," The New York Times article reports. It cites the following California examples:

CPMC, net income $200 million; charity care, $16 million.
Stanford, net income, $186 million, charity $19 million.
Cedars-Sinai, $153 million, charity $16 million.
John Muir $132 million, charity $15 million.
Alta Bates-Summit, $112 million, charity $5 million.
Santa Barbara Cottage, $109 million, charity $13 million.
Sutter, Sacramento, $102 million, charity $35 million.

In 2009, the medical industry presented the public with $2.5 trillion bill, including nearly $200 billion for administrative costs, money, reporter Rosenthal notes, that "could be used for other purposes."

In other countries, the price of a day in the hospital often includes many basic services. "Not here," Rosenthal writes. "The 'chargemaster,' the price list rested by each hospital, typically has more than ten thousand entries, and almost nothing---not even an aspirin, a bag of IV fluid, or a visit from a physical therapist to help a patient get out of bed---is free."

CPMC charges $32,901 for an X-ray study of the heart's arteries and $25,646 for a gall bladder removal, $5,510 to deliver a baby--plus $731 for each hour of labor. (Bring on the midwives!) Even basic supplies carry huge markups, The Times notes. Examples: $20 for a codeine pill you can buy for 50 cents at the drug store; and $543 for a breast-pump that sells for $25 on line.

One aspect of today's dysfunctional medical system that puzzles this writer is why Blue Cross/Blue Shield and other insurers seem to let most of the egregious billings by hospitals slip by. Ditto for the U.S. government. Whose minding the ER?

P.S. And give that New York Times reporter a Pulitzer! Elisabeth Rosenthal has performed a meritorious public service.

*************

Sherwood Ross is a Miami-based media consultant whose public relations firm works for "good causes."

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