Health

Hospitals Profit from Exorbitant Markups

Published

10 years ago

June 16, 2015

Oakland Post

Growing Movement to curb high medical costs. (Photo credit: The All-Nite Images/Flickr/CC)

By Jazelle Hunt
NNPA Washington Correspondent

WASHINGTON (NNPA) – Hundreds of American hospitals are turning a profit by charging patients exorbitant rates for necessary procedures. And for 50 hospitals in particular, the mark-ups are as high as 12 times the amount it costs them to deliver those services.

This is the revelation from a paper published last week in the Health Affairs medical journal, titled “Extreme Markup: The Fifty US Hospitals With The Highest Charge-To-Cost Ratios.”

“These 50 are outliers, they’re very skewed. But that does not mean all the other hospitals are hidden,” says Ge Bai, assistant professor of accounting at Washington and Lee University, and co-author of the paper. “It’s very difficult to tell [though]. You’d have to ask the question, when you walk in, at the front desk…about the ownership of the hospital.”

The researchers looked at 2012 hospital price lists for nearly 5,000 facilities across the country, and compared them to the Medicare-allowable costs, defined as the most reasonable fees a hospital can expect to spend in effectively delivering any given service to Medicare patients, as calculated by the government. They are not intended to guide hospital charges to patients, and every hospital creates its own price list. These lists are called chargemasters and are often difficult for patients to access and decipher unless a hospital takes the rare initiative to be transparent.

According to the study, most hospitals charge patients between 1.5 and 4 times the Medicare allowable cost. A smaller, but sizable number of facilities charge between 4 and 9 times the cost. The 50 outliers – 49 of which were for-profit facilities – were charging patients between 9.2 and 12.6 times the cost they incurred in delivering services.

The top five hospitals with the steepest mark-ups, all charging at least 12 times the Medicare cost, were North Okaloosa Medical Center and Bayfront Health Brooksville in Florida; Carepoint Health-Bayonne Hospital in New Jersey; Paul B. Hall Regional Medical Center in Kentucky; and Chestnut Hill Hospital in Pennsylvania.

Florida is home to 20 of the 50 high mark-up hospitals identified in the study. The rest are spread across 12 other states – mostly in the South (76 percent are), and mostly in urban areas (84 percent are).

The other states were Alabama (which had five of these facilities), Arizona (one), Arkansas (one), California (three), Kentucky (one), New Jersey (one), Oklahoma (one), Pennsylvania (seven), South Carolina (one), Tennessee (three), Texas (five), and Virginia (one).

Two publicly-traded corporate hospital systems – Community Health Systems and Hospital Corporation of America – own 38 of these facilities.

Chargemasters vary widely, in general and within this top-50 group. For example, at Orange Park Medical Center in Florida (number eight on the list), if an uninsured person is admitted for one to two days for chest pain, he or she could be charged somewhere between $12,000 and $23,000. About 15 miles away at Memorial Hospital of Jacksonville, the same patient would be charged between $9,000 and $17,000, and that’s with an extra day of care. Both hospitals are owned by the same company, which voluntarily provides its price estimates.

Uninsured people feel the full force of these charges. While the Affordable Care Act has helped millions get coverage, the Centers for Disease Control and Prevention (CDC) estimates that 13.7 percent of Black people are still uninsured as of 2014 and will likely remain so. Many are low-income or below the poverty line, living in states that did not expand Medicare coverage. Half of the states housing the top-50 high mark-up hospitals did not expand Medicare.

Insured people who are “out-of-network” at these facilities are also vulnerable. Insurance companies do not set their terms based on the hospital’s prices – if a policy covers 70 percent of all emergency visits, then the patient is responsible for the 30 percent, whether the hospital charged $100 or $1,000. When a person gets a bill from a hospital that isn’t partnered with his or her insurance company, the company often pays little to nothing of that bill.

People who are both insured and in-network end up paying higher premiums when a hospital with high mark-ups is part of their network. As insurance companies have to cover members who end up in these for-profit facilities, they spread the steep charges among all their members.

“We don’t have price regulations in other industries so people can do comparative shopping. But in the health care market it’s very different. In many cases, we as consumers do not have the time…to compare prices,” Bai says, adding that during treatment, physicians don’t know or are not at liberty to discuss the hospital’s pricing systems. “We as consumers have no options before the service is provided. We just wait there hopelessly…we’re sick and anxious.”

About 30 percent of the hospitals sampled in the study were considered for-profit – Bai says that about half of all hospitals in the country are.

Maryland and West Virginia are the only states with complete health care pricing regulations. California and New Jersey have regulations for what hospitals can charge uninsured patients. Maryland’s system is widely considered a national model, with the lowest mark-ups in the nation (1.5 of Medicare allowable cost). The report recommends a federal system patterned after it.

“We knew these high mark-ups have been going on for a while, at least 15 or 20 years, but this is really over the top,” Bai says. “I think the public needs to understand…there’s a loophole in our system. The market has stopped working. That’s why we need the government to step to help regulate some of these prices.”

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OPINION: Your Voice and Vote Impact the Quality of Your Health Care

One of the most dangerous developments we’re seeing now? Deep federal cuts are being proposed to Medicaid, the life-saving health insurance program that covers nearly 80 million lower-income individuals nationwide. That is approximately 15 million Californians and about 1 million of the state’s nearly 3 million Black Californians who are at risk of losing their healthcare.

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Oakland Post

Rhonda M. Smith.

By Rhonda M. Smith, Special to California Black Media Partners

Shortly after last year’s election, I hopped into a Lyft and struck up a conversation with the driver. As we talked, the topic inevitably turned to politics. He confidently told me that he didn’t vote — not because he supported Donald Trump, but because he didn’t like Kamala Harris’ résumé. When I asked what exactly he didn’t like, he couldn’t specifically articulate his dislike or point to anything specific. In his words, he “just didn’t like her résumé.”

That moment really hit hard for me. As a Black woman, I’ve lived through enough election cycles to recognize how often uncertainty, misinformation, or political apathy keep people from voting, especially Black voters whose voices are historically left out of the conversation and whose health, economic security, and opportunities are directly impacted by the individual elected to office, and the legislative branches and political parties that push forth their agenda.

That conversation with the Lyft driver reflects a troubling surge in fear-driven politics across our country. We’ve seen White House executive orders gut federal programs meant to help our most vulnerable populations and policies that systematically exclude or harm Black and underserved communities.

One of the most dangerous developments we’re seeing now? Deep federal cuts are being proposed to Medicaid, the life-saving health insurance program that covers nearly 80 million lower-income individuals nationwide. That is approximately 15 million Californians and about 1 million of the state’s nearly 3 million Black Californians who are at risk of losing their healthcare.

Medicaid, called Medi-Cal in California, doesn’t just cover care. It protects individuals and families from medical debt, keeps rural hospitals open, creates jobs, and helps our communities thrive. Simply put; Medicaid is a lifeline for 1 in 5 Black Americans. For many, it’s the only thing standing between them and a medical emergency they can’t afford, especially with the skyrocketing costs of health care. The proposed cuts mean up to 7.2 million Black Americans could lose their healthcare coverage, making it harder for them to receive timely, life-saving care. Cuts to Medicaid would also result in fewer prenatal visits, delayed cancer screenings, unfilled prescriptions, and closures of community clinics. When healthcare is inaccessible or unaffordable, it doesn’t just harm individuals, it weakens entire communities and widens inequities.

The reality is Black Americans already face disproportionately higher rates of poorer health outcomes. Our life expectancy is nearly five years shorter in comparison to White Americans. Black pregnant people are 3.6 times more likely to die during pregnancy or postpartum than their white counterparts.

These policies don’t happen in a vacuum. They are determined by who holds power and who shows up to vote. Showing up amplifies our voices. Taking action and exercising our right to vote is how we express our power.

I urge you to start today. Call your representatives, on both sides of the aisle, and demand they protect Medicaid (Medi-Cal), the Affordable Care Act (Covered CA), and access to food assistance programs, maternal health resources, mental health services, and protect our basic freedoms and human rights. Stay informed, talk to your neighbors and register to vote.

About the Author

Rhonda M. Smith is the Executive Director of the California Black Health Network, a statewide nonprofit dedicated to advancing health equity for all Black Californians.

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OPINION: Supreme Court Case Highlights Clash Between Parental Rights and Progressive Indoctrination

At the center of this controversy are some parents from Montgomery County in Maryland, who assert a fundamental principle: the right to shield their children from exposure to sexual content that is inappropriate for their age, while also steering their moral and ethical upbringing in alignment with their faith. The local school board decided to introduce a curriculum that includes LGBTQ+ themes — often embracing controversial discussions of human sexuality and gender identity.

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Oakland Post

Craig J. DeLuz. Courtesy of Craig J. DeLuz.

By Craig J. DeLuz, Special to California Black Media Partners

In America’s schools, the tension between parental rights and learning curricula has created a contentious battlefield.

In this debate, it is essential to recognize that parents are, first and foremost, their children’s primary educators. When they send their children to school — public or private — they do not surrender their rights or responsibilities. Yet, the education establishment has been increasingly encroaching on this vital paradigm.

A case recently argued before the Supreme Court regarding Maryland parents’ rights to opt out of lessons that infringe upon their religious beliefs epitomizes this growing conflict. This case, Mahmoud v. Taylor, is not simply about retreating from progressive educational mandates. It is fundamentally a defense of First Amendment rights, a defense of parents’ rights to be parents.

At the center of this controversy are some parents from Montgomery County in Maryland, who assert a fundamental principle: the right to shield their children from exposure to sexual content that is inappropriate for their age, while also steering their moral and ethical upbringing in alignment with their faith. The local school board decided to introduce a curriculum that includes LGBTQ+ themes, often embracing controversial discussions of human sexuality and gender identity. The parents argue that the subject matter is age-inappropriate, and the school board does not give parents the option to withdraw their children when those lessons are taught.

This case raises profound questions about the role of public education in a democratic society. In their fervent quest for inclusivity, some educators seem to have overlooked an essential truth: that the promotion of inclusivity should never infringe upon parental rights and the deeply held convictions that guide families of different faith backgrounds.

This matter goes well beyond mere exposure. It veers into indoctrination when children are repeatedly confronted with concepts that clash with their family values.

“I don’t think anybody can read that and say: well, this is just telling children that there are occasions when men marry other men,” noted Justice Samuel Alito. “It has a clear moral message, and it may be a good message. It’s just a message that a lot of religious people disagree with.”

Justice Amy Coney Barrett raised a crucial point, noting that it is one thing to merely expose students to diverse ideas; it is quite another to present certain viewpoints as indisputable truths. By framing an ideology with the certainty of “this is the right view of the world,” educators risk indoctrination rather than enlightenment. This distinction is not merely academic; it speaks to the very essence of cultivating a truly informed citizenry.

Even Justice Elena Kagan expressed concern regarding the exposure of young children to certain materials in Montgomery County.

“I, too, was struck by these young kids’ picture books and, on matters concerning sexuality, I suspect there are a lot of non-religious parents who weren’t all that thrilled about this,” she said.

Justice John Roberts aptly questioned the practicality of expecting young children to compartmentalize their beliefs in the classroom.

“It is unreasonable to expect five-year-olds, still forming their worldviews, to reconcile lessons that conflict fundamentally with the teachings they receive at home,” he said.

As was noted in my previous commentary, “The Hidden Truth In The Battle Over Books In American Schools”, what lies at the heart of these debates is a moral disconnect between the values held by the majority of Americans and those promoted by the educational establishment. While the majority rightly argue that material containing controversial content of a sexual nature should have no place in our children’s classrooms, the education establishment continues to tout the necessity of exposing children to such content under the guise of inclusivity. This disregards the legitimate values held by the wider community.

Highlighted in this case that is before the Supreme Court is a crucial truth: parents must resolutely maintain their right to direct their children’s education, according to their values. This struggle is not simply a skirmish; it reflects a broader movement aimed at reshaping education by privileging a state-sanctioned narrative while marginalizing dissenting voices.

It is imperative that we assert, without hesitation, that parents are — and must remain — the primary educators of their children.

When parents enroll a child in a school, it should in no way be interpreted as a relinquishment of parental authority or the moral guidance essential to their upbringing. We must stand firm in defending parental rights against the encroaching ideologies of the education establishment.

About the Author

Craig J. DeLuz has almost 30 years of experience in public policy and advocacy. He has served as a member of The Robla School District Board of Trustees for over 20 years. He also currently hosts a daily news and commentary show called “The RUNDOWN.” You can follow him on X at @CraigDeLuz.

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California Observes Third Annual Black Health Advocacy Week

On May 4, 2023, the California Assembly unanimously passed ACR 53, enacting BHEAW every first week of May. “The life expectancy at birth for Black Californians is 76.2 years of age, which is five years shorter than the state average and the lowest life expectancy of all racial and ethnic groups in California,” said Weber in a statement.

Published

3 weeks ago

May 19, 2025

Oakland Post

Dr. Akilah Weber Pierson. File photo.

By Bo Tefu, California Black Media

California’s third annual Black Health Equity Advocacy Week (BHEAW), observed from May 5-9, reaffirmed the commitment of the state and advocates to address systemic health disparities affecting Black communities.

Assemblymember Akilah Weber (D-San Diego), who is a medical doctor and chair of the California Legislative Black Caucus (CLBC), authored the resolution that created BHEAW — the first statewide initiative of its kind focused on advancing Black health equity.

On May 4, 2023, the California Assembly unanimously passed ACR 53, enacting BHEAW every first week of May.

“The life expectancy at birth for Black Californians is 76.2 years of age, which is five years shorter than the state average and the lowest life expectancy of all racial and ethnic groups in California,” said Weber in a statement.

“This disparity is a stark reminder of the systemic and institutional factors that contribute to health inequities in communities of color,” she added.

The California Black Health Network (CBHN) led this year’s events, combining advocacy, training, and public engagement to amplify the urgency of closing health gaps for Black Californians.

The theme of this year’s observance was “We’ve Got the Power.”

“CBHN is calling on our community to step up, speak out, and get involved. Increasing the participation of Black Californians in policymaking — across the health industry and public sector — is one of the most powerful ways we can drive change and save lives,” reads a message from the organization promoting this year’s BHEAW.

“Policy change is within your power and this week we’re in Sacramento with our Health Equity Advocacy Training (HEAT) Program Cohort 3 to uplift issues impacting our community and advocate to help shape the policies and programs that will improve the health of current and future generations of Black Californians,” the message continued.

Focused on public awareness and information, this year’s BHEAW included a social media campaign, a rally and training program with vital information on medical conditions that have a disproportionate impact on Black Californians, including maternal mortality, mental health, diabetes, cancer and more.

For more information on the resolution or to join the movement, visit CBHN’s official site, www.cablackhealthnetwork.org.