Exact same thing happened to my friend. He did all his research, and while he was under anesthesia a nurse assisted that was out of network. $5k out of pocket. He ended up getting it removed after some run around between insurance and the hospital.
So they jack up everyone else's bills in the hopes that enough people will pay that they'll make a profit.
Insurance companies will usually push back, so (sometimes partially) uninsured people with decent credit hit with huge charges.
No. That’s the justification given so that people get angry at the wrong thing.
Hospitals charge this because they CAN. They are doing what businesses do and that is maximizing their profit.
Don’t get angry at the uninsured get angry at the politicians for enabling a broken system.
Including all the non-profit hospitals? What's their motivation?
"Non-profit" doesn't mean "can't make a profit".
Rarely paid for with reimbursement revenues.
> giant endowments
Definitely not paid for with reimbursement revenues.
> amenities for staff
Try cutting these, and see how quickly 1199 SEIU comes down on you.
> raising administrator salaries "to retain premium talent", etc.
Even if you assumed that there were no relationship between the wages paid and the quality of work performed (there is), these are nowhere near big enough to account for the difference. They're also not that far out of line with other countries, either: 25% in the US, compared to 20% in the Netherlands, for example.
But more so than that: they're SG&A expenses, which are further down the balance sheet than the reimbursement revenues. And yet, hospitals actually lose money on the top line for Medicare patients (who represent about 40% of the market). That's the real reason reimbursement rates are raised for private insurers - the private insurers are required (by law) to pay more, and they need to subsidize the sub-COGS reimbursements from the public insurers (Medicare, and to a lesser extent Medicaid).
So no, none of the things you listed actually explain the reason hospitals charge private insurers the rates they do.
Non-profit simply means any surplus of revenue is spent. So, the more revenue generated by a non-profit's paying customers means they get to funnel that to their core mission (likely research, possibly those that can't pay, or cynically more salary for those running the show).
Hospitals make very low profit margins; hospitals have been hemorrhaging money and either being bought out by hospital systems or insurers, or even shutting their doors entirely.
In any case, it's not uninsured patients that cost the hospital money; there aren't enough of them to make a difference at most hospitals. The patients that cost hospitals money are Medicare patients, because Medicare reimburses rates that are below COGS, and private insurers are required by law to reimburse more.
In other words, yes, it's the politicians that enable a broken system, but no, it's not the uninsured patients who are at fault, and it's not "profit-maximizing businesses" that are at fault either. Hospitals don't want this convoluted billing system any more than patients do, but it's literally forced on them as a result of accepting Medicare patients.
Given that this is going on, why not just switch to a single payer system and spread this out over a much larger population rather than each hospital trying to insure against it?
You can't get months worth of chemo or physical therapy or dermatological consults or whatnot at an ER.
What percentage of hospital budgets is lost to this?
If it's anything less then 95%, I don't see how the assistance of an out-of-network nurse could possibly cost $5,000.
How many patiens are uninsured? 10%? 20%?
This still does not explain how the hospital can bill $5k for one hour of a nurse that may be making herself $50 per hour at most.
This is actually only a half truth. Emergency rooms are required to treat patients who need emergency care. They don't need to fix all ailments. If you have cancer they can turn you away, but if your organs are failing as the result of cancer they have to treat you. If you need a heart surgery they can turn you away, but if you're having a heart attack they need to treat you. For the most part, treatment is pretty much just making sure you're stable and can leave the hospital without immediately dying. This only applies to emergency rooms as well. Where you go to get surgeries is usually not the same place you go to treat an emergency condition. It might be affiliated with the same hospital, and might be attached to the emergency room, but it isn't itself an emergency room.
They can't. That's the problem - there's little you can do to stop it from happening, even if you're aware of this sort of billing problem and try to take steps to prevent it.
https://www.npr.org/sections/health-shots/2018/08/27/6408918...
> Surprise bills occur when a patient goes to a hospital in his insurance network but receives treatment from a doctor who does not participate in the network, resulting in a direct bill to the patient. They can also occur in cases like Calver's, where insurers will pay for needed emergency care at the closest hospital — even if it is out of network — but the hospital and the insurer may not agree on a reasonable price. The hospital then demands that patients pay the difference, in a practice called balance billing.
https://www.npr.org/sections/health-shots/2015/02/17/3869088...
> The surgeon's office later told her that he belonged to two different medical groups. One was in Morgan's husband's health plan network, the other wasn't.
I got this one, it was mindblowing. For ER work, they'd bill through one practice, for scheduled appointments, another.
I got balance billed for $11k. My father, who worked in employee benefits for over 30 years, couldn't even figure out what was up at first. Then they filed to send me to collections because I kept refusing to pay (note, I'm in California and this billing is illegal for life-threatening emergency visits matching the situation I was in). Finally, the insurance company stepped in and covered me, but we were only able to achieve this because my family knew people personally at the insurer.
All kinds of messed up.