Jun 14, 2021 - Health

Most top hospitals charge a more than 5x markup

Hospitals with the highest average bill markup
Data: JHU; Chart: Will Chase/Axios

Some of the hospitals with the highest revenue in the country also have some of the highest prices, charging an average of 10 times more than the actual cost of the care they deliver, according to new research by Johns Hopkins University provided exclusively to Axios.

Why it matters: Hospitals each determine their own charges, or list prices. While few patients ever pay those prices, due to negotiated insurance rates, they do affect the uninsured and, experts say, ultimately influence the overall price we all pay.

Details: Johns Hopkins University researchers looked at the overall cost-to-charge ratio listed in the American Hospital Directory for the top 100 hospitals in the U.S. by their 2018 revenue to calculate the average markups.

  • Of the top 100 largest hospitals in the U.S., 57 were charging more than five times the actual cost, on average, of the care they provided.
  • Nine hospitals were charging more than 10 times the actual cost.
  • The hospital with the highest average markup was HCA's Chippenham Hospital in Richmond, with charges at nearly 13 times its cost.
Data: JHU; Chart: Will Chase/Axios

For-profit hospitals had the biggest markups. They made up nine of the 10 hospitals with the biggest markups, and eight of those for-profit hospitals charged more than 10 times their costs.

  • But, a majority of the 57 hospitals with a markup of five times or higher were non-profit hospitals (34).
  • Pennsylvania and Texas were among the states that stood out when it came to markups. Nine of the top 15 were located in one of these two states.

The other side: Hospitals said this sort of calculation can be misleading, in large part due to the fact that few ever pay the actual chargemaster price.

  • "We have some of the most comprehensive policies and programs in the healthcare industry to protect our patients from financial hardship," said Cheri Love-Moceri, a spokeswoman for Methodist Hospital, referring to charity care programs and "uninsured discount" programs.
  • "Hospitals and health systems do more than any other part of the health care field to support vulnerable patients," said an American Hospital Association spokesman, adding hospitals provided more than $702.51 billion in uncompensated care to patients since 2000.

Go deeper: Explore the full Axios-Johns Hopkins analysis

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