As an emergency medical technician, William Brockman knows something about heart attacks. So in September 2001, when his pulse was racing and his chest began aching, Brockman headed for the emergency room at Advocate Illinois Masonic Medical Center in his hometown of Chicago. His blood pressure was high, and doctors kept him overnight in the cardiac intensive care unit.
The good news was that Brockman did not have a heart attack; doctors later diagnosed hypertension, which is now under control with medication. The bad news was that the 43-year-old had no health insurance -- and no idea that hospitals typically charge the highest prices to the uninsured.
Indeed, hospitals often charge uninsured patients -- usually the people with the fewest resources -- more than double the hospital's actual cost for providing care, and sometimes more than triple. Private insurers, meanwhile, by dint of their economic clout and their huge pool of customers, are able to negotiate deep discounts that let them pay hospitals a much smaller markup. Their payments average about 13 percent above cost, according to the Medicare Payment Advisory Commission, or MedPAC, the government entity that advises Congress on Medicare payment policy.
Medicare has an even better deal. The government-run insurance program for seniors sets its own rates, paying hospitals an average of 1 percent below the cost of services, says MedPAC.
When Brockman received an itemized bill, the charge for setting up the intravenous line alone was $350. "If I had known [the price], I would have started my own," lamented Brockman, who has set up many an IV as an emergency health care worker and who estimates the cost of the saline bag and catheter at $10.
On annual earnings of less than $25,000, Brockman managed to pay off the doctor, radiology, and laboratory bills, and was writing checks of $30 to $40 a month toward a $6,000 hospital bill. If Brockman had had health insurance, he and his insurer probably would have benefited from a negotiated discount of between 15 percent and 50 percent. But Brockman had no coverage, and he says that Advocate hospital turned him down for charity care. Instead, Advocate charged him the "sticker price" and demanded he pay $400 a month, which Brockman said he couldn't swing.
That's when Brockman learned the other half of his lesson. Some hospitals have become quite aggressive in their attempts to collect payments from the uninsured. Many hospitals are urging uninsured patients to withdraw money from ATMs -- conveniently located in some emergency rooms -- or to use their credit cards to pay in full before they are discharged. Some hospitals have arrangements with local banks enabling patients to commit to loans before they even leave the premises.
Soon after Brockman told Advocate that he couldn't afford to pay $400 a month, he heard from a lawyer who, Brockman said, threatened to have his wages garnisheed. That would dump his credit rating "down the toilet," Brockman says the lawyer told him. "I was thinking, This is a real nice way to do business," said Brockman.
The lawyer demanded $1,500 down to stay out of court, says Brockman, who refused. "If I couldn't do $400 a month, what made them think I had $1,500?" he recalled. Brockman turned to the Service Employees International Union, which, because he was a member, agreed to represent him in court.
Indeed, the SEIU's Hospital Accountability Project has studied the billing practices of hospitals in Cook County, Ill., and has documented significant disparities among what hospitals will accept from different payers. For Brockman's particular hospital, the average inpatient charge to uninsured people in 2001 was $21,985. That was more than three times the typical discounted price of $6,530 for insured patients, according to the project's report.
Every hospital maintains a master list of prices for specific services, called a charge master. But just because everyone is charged the same price doesn't mean that everyone pays the same price. Not all people are asked to pay the full charge-master rate, just as not everyone on a car lot writes a check for the sticker price.
The people most affected by a hospital's sticker prices are low-income working people, whose jobs carry no health care benefits or who can't afford to pay their share of insurance premiums and co-payments. (Those at the very bottom of the economic ladder tend to qualify for public assistance, such as Medicaid or the state-run Children's Health Insurance Program.)
One reason the situation persists is that the uninsured are a virtually powerless group. "The number of uninsured is so small, their political and economic power so weak, and their knowledge of how the system really operates so limited that hospitals can charge whatever they choose -- and in most cases get it," Randy Suttles, president of Medical Savings Insurance, an insurer that sells medical savings accounts, said in a report released in July by the Council for Affordable Health Insurance.
The practice of charging high prices to the uninsured has become a way of life for just about every hospital across the nation. In part, hospitals can make up for slim profits in their revenues from insured payers if they charge the uninsured more. Hospitals in recent years have felt pressure from insurance companies -- led by managed care plans -- to deeply "discount" prices. And with hospitals already losing money on Medicare, one-third of all hospitals are in the red, while another third are teetering on the brink of insolvency, according to the American Hospital Association.
Many hospitals have responded by repeatedly hiking the prices on their charge-master lists, so that insurer discounts don't cut so deep. That has inadvertently increased the burden on the uninsured, because hospitals still bill them for the charge-master price. "The situation has probably gotten out of hand," said Paul Ginsburg, president of the Center for Studying Health System Change. Hospitals set higher prices, not as strategies to "charge the uninsured people more, but strategies to increase their payments from insured people," he said.
"I suspect hospitals historically haven't thought that much about what they should charge uninsured people," Ginsburg said. "But given the fact that they are more vigilant in collecting, it really implies that they should take more seriously this issue of what to set charges at."
Frustrated hospital administrators say they have thought about the problem, but argue that Medicare regulations have them trapped. Indeed, Medicare rules require hospitals to treat Medicare and non-Medicare patients exactly the same when it comes to gross charges. Hospitals, therefore, say they are leery of charging uninsured patients differently, for fear they will lose their Medicare contracts.
Moreover, according to the AHA, many hospitals feel pressured by the federal government to collect aggressively from the uninsured, and even to threaten a lawsuit or to take court action. Medicare beneficiaries are responsible for a portion of their hospital bill, but when they don't pay, Medicare makes up some of a hospital's loss. To get the Medicare reimbursement, however, hospitals must show that they've first tried to collect from the patient. And because all patients -- Medicare and non-Medicare -- must be treated equally, the hospital administration feels it must also threaten court action against an uninsured person.
Those fears are legitimate, says Bruce Vladeck, former administrator of the Medicare program and now a professor of health policy of geriatrics at Mount Sinai School of Medicine in New York. "It really is a problem, in that Medicare requires hospitals to observe certain billing and collection practices to get reimbursed for Medicare bad debt," he said. "The signal that hospitals got was that you really have to bill everyone and send them to collection agencies. Otherwise, Medicare would be ripped off."
The House Energy and Commerce Committee this summer launched an investigation to determine the severity of the situation. The growing number of the uninsured is only exacerbating the problem. Indeed, the Census Bureau announced recently that the number of uninsured Americans increased from 41 million in 2001 to 43.6 million in 2002. Health care analysts blame the rising number on the economic downturn and job losses, and they predict that the ranks of the uninsured may grow still more before shrinking.
The Energy panel's Oversight and Investigations Subcommittee has asked 20 of the largest hospital systems to hand over data so that it can compare the sticker prices -- what the uninsured are charged -- with discounted prices demanded by Medicare and negotiated with insurance companies. The subcommittee expects to have the data in hand sometime this month, and the Energy and Commerce Committee will likely turn to the matter next year when its work on Medicare and energy legislation may be complete.
How Much Is Too Much? It's not that hospitals raise the price of a procedure when an uninsured person walks through the door. By law, hospitals must charge every patient the same price for the exact same medical service.
Consider Audrain Medical Center, a nonprofit hospital two hours west of St. Louis in rural Mexico, Mo. Audrain has 189 beds and uses about 60 of them a day. Rural hospitals in Missouri charge the uninsured an average of 111 percent above cost -- more than double -- according to information collected by the Health and Human Services Department.
Here's how that translates into dollars and cents: Let's say a patient at Audrain needs a standard colonoscopy. If the patient has Medicare, the hospital accepts a payment of $376, an amount that should be very close to the hospital's actual cost, or may be slightly less than cost, according to Lori Johnson, director of compliance and advocacy at Audrain. But the hospital, she said, charges an uninsured patient the highest possible price, the charge-master rate of $895.
In the emergency room, one patient may require significantly more care than another, Johnson pointed out, and thus rack up a much higher bill. But there's always one base emergency-room charge before additional fees are tacked on. For Medicare patients, Audrain accepts $67 for the base emergency-room payment. Again, the Medicare rate is typically very close to cost. Audrain, however, charges uninsured people the charge-master price of $120 -- nearly double.
Patients with insurance don't pay the highest or the lowest price. Hospitals don't reveal the discounts they negotiate with insurers. Indeed, hospitals divulge very little information about their pricing; they argue that their payment arrangements are proprietary. When the Energy and Commerce Committee asked hospitals for detailed payment information, the American Hospital Association was concerned about getting too specific, and it renegotiated with the committee over what could be provided in a public forum. In the end, it was agreed that the committee would get aggregate industry data, as opposed to hospital-specific information.
When contacted by National Journal, Audrain Medical Center's Johnson was forthcoming without revealing information on the center's payment arrangements with specific insurers. Johnson said that her hospital's discounts range from 10 to 25 percent. The more business an insurer brings to Audrain, the bigger the discount. In some geographic areas, discounts can be as deep as 50 percent.
The charge-master, pre-discount figures -- cost plus markup -- vary greatly from one hospital group to another, largely because the markup varies. At the hospital where William Brockman went for his emergency care, as well as at other Chicago hospitals, the average markup above cost in 2002 for uninsured patients was 155 percent, according to data from HHS's Centers for Medicare and Medicaid Services. The markup was even higher at hospitals in other states, the data show. Nevada's urban hospitals had the biggest markup for medical services, averaging 255 percent above cost. California hospitals in urban areas marked up their prices an average of 205 percent above cost.
Maryland had the lowest markup, at an average of 32 percent above cost, and three states had average markups of 72 percent above cost. Most states had average hospital markups of at least 100 percent above cost. (See chart, p. 3182.)
To be sure, hospital practices vary. According to the SEIU's project report, "Some hospitals approach the problem in a manner that is consistent with a charitable health care mission and others don't." The hospital where William Brockman went turned out to be one of the least charitable in the Chicago area, the SEIU says. According to the union's report, Advocate hospitals served more uninsured than any other private hospital system in Cook County, and they had the highest gross charges and the highest profit margin on those uninsured who paid their bills.
Marty Manning, Advocate's vice president of operations finance, doesn't deny that Advocate's charges are rising, but he argues it's part of a national problem, driven by Medicare rules and market forces. He said that in April, recognizing the impact on the uninsured, Advocate began providing charity care to patients with incomes up to 400 percent of the federal poverty level; this was an increase from the previous ceiling of 200 percent. In addition, Advocate stopped seeking liens on homes when the home is a patient's primary asset, and stopped bringing legal action against unemployed patients.
Moreover, Advocate charges that the SEIU may have targeted the hospital over issues involving a unionization drive. Before the SEIU report was published, the union had approached Advocate with a proposal to organize its workforce, said Advocate spokesman Ed Domansky. Advocate refused to sign the agreement, which Domansky says would have required the company to hand over the addresses of staff, and to refrain from talking to employees about unionization. He said union officials told Advocate that the SEIU was trying to build its presence in the Midwest, starting with Advocate.
For patients, the bottom line is that it would be helpful to know before an illness strikes which hospitals charge the most. But pricing information is hard to come by. In phone calls to two major hospitals to ask the price of a specific medical service, National Journal spent more than 30 minutes on hold at each hospital before receiving extremely limited information from reluctant billing personnel.
Charity Snare Most of the uninsured don't receive charity care and are not even informed that it is available, according to the SEIU report on Cook County hospitals. The report maintains that hospitals in Illinois overstate how much charity care they give by reporting charity care amounts at the sticker price rather than at the cost of providing the care. Hospitals in Illinois reported providing $464 million in charity care in 2001, but the true value of that charity care, at cost, was only $332 million, according to the SEIU.
Moreover, charity care policies often fail to translate into assistance. A January survey of patients sponsored by the Access Project, a program of the Schneider Institute for Health Policy at Brandeis University, found that patients are often kept in the dark about the possibility of charity care. In the survey of nearly 7,000 uninsured people in 18 states, nearly half of respondents said that hospital staff "never" offered to look into possible assistance for them.
Moreover, when a hospital did offer financial assistance, 32 percent of respondents said it was to allow them to pay the full bill in installments, as opposed to discounting (12 percent) or waiving the bill (13 percent).
As a result, nearly one-quarter of respondents with unpaid medical bills said that their debts would deter them from seeking care at the same facility in the future. "This study contradicts a common belief that the uninsured can always get care when they need it -- and do so for free," according to the report that accompanied the Access Project's survey.
Charity care is a mixed bag, said Ginsburg. The amount given, he said, "is influenced not only by what's needed, but by the financial wherewithal to provide it. You have a supply of charity care and a demand for charity care. Whichever is lower will determine the amount of charity care provided."
Defending hospitals, Carmela Coyle, senior vice president of policy for the American Hospital Association, argues that uncompensated care totaling more than $20 billion a year is not trivial for hospitals. However, the term "uncompensated care" is tricky, according to health care analysts. Typically, one-quarter of uncompensated care is charity care, and the remaining three-quarters is bad debt, said one advocate for a patients' rights organization.
"For the uninsured, the difference is critical," the advocate said, explaining the situation in the following way: "If you're low-income and you get charity care, you're not expected to pay all or a portion of your bill. You're protected from discriminatory pricing. If you're low-income and can't pay for your care, then you have bad debt, an unpaid hospital bill. That's where collections step in. Hospitals may send the account to a collections agency. You may have liens placed on your home. Wages garnisheed. But hospitals confuse the issue by lumping them together."
Charity care represents 1 to 2 percent of a hospital's gross revenues, the patients' rights advocate said, arguing, however, that hospitals try to obscure that by talking about uncompensated care, which is 5 to 6 percent.
It's not uncommon for hospitals to allow some form of charity care for patients with incomes up to 150 percent of the federal poverty level, said Coyle of the AHA. To qualify, an individual would have to have an annual income under about $14,000, while a family of four would have to have an annual income under about $27,000. (Brockman, a single man with an annual income of $25,000, was way over the limit. He asked for assistance and was denied.)
Hospitals typically screen patients first to determine whether they qualify for public assistance such as Medicaid or the state Children's Health Insurance Program. Both cover many people with incomes up to the federal poverty level; some states go even higher. If a patient does not qualify, then he or she may be eligible for charity care from the hospital. (Lower-income insured patients can get help with co-payments and deductibles.)
Audrain hospital in Missouri, for example, has written off 20 percent of charges to the uninsured, according to Johnson, and that's not unusual for a hospital. Audrain works on a sliding scale. Uninsured people whose incomes fall below the federal poverty line (about $18,000 for a family of four) get full assistance and are not responsible for any of their bill.
For someone with an annual income below 120 percent of poverty, Audrain writes off 80 percent of the bill. For someone at 180 percent of the poverty level, the hospital writes off 20 percent of the bill. Audrain also has a clause for catastrophic charges. If a bill is twice the patient's annual income, Audrain forgives the entire amount.
Coyle said, "Hospitals would like to be able to help everybody with their needs, but there are fiscal restraints on what can be done."
Hardball Hospitals aren't terribly successful in collecting payments from the uninsured. "Despite collection efforts, most of these people really don't have money, so hospitals are not getting back much of their costs from their uninsured patients," Ginsburg said. Still, that hasn't stopped hospitals from trying.
Hospitals are increasingly instituting multistep procedures to squeeze as much as possible out of the uninsured. Sometimes, the outcome is free care, but sometimes it results in a lien on a house or garnisheed wages. Some cases end up in court.
Earlier this year, financial consultant Michael Zimmerman, chief executive officer of Zimmerman & Associates, gave a presentation to the Healthcare Financial Management Association called "Leveraging Self-Pay Into a Significant Financial Opportunity: Strategies for Senior Financial Executives."
Urging hospital financial officers to become more aggressive in their collection practices, Zimmerman noted that hospitals spent $22 billion on uncompensated care in 2000. That's 6 percent of total hospital expenses, he said. "Americans are burying themselves in debt -- to the point they can't pay our bills," Zimmerman said in his presentation.
And don't be fooled by the word "uninsured," he told hospital executives. " 'Uninsured' does not mean indigent and definitely not uncollectible." Nearly 85 percent of the uninsured are in working families, he noted. Moreover, Zimmerman continued, 40 percent of the uninsured population is between the ages of 18 and 34, "a group that is typically in good health and presumably considers their money better spent elsewhere."
The point? Don't feel bad about going after the uninsured. The solution? Hit patients up before they get out the door.
That's where the emergency-room cash machines come in, and the requests for up-front credit card payments, and the opportunities for instant bank loans. Zimmerman tells hospitals that it's important to take advantage of the "psychological edge" of tapping patients while they are still patients. "Before service, during service, and at discharge, you are dealing with a patient. At collection follow-up, you are dealing with a debtor. Patient priorities are different than debtor priorities." Zimmerman suggests that billing staff visit patients' rooms to arrange third-party coverage or payments; for those "patients with previous bad-debt accounts," Zimmerman advises hospitals to conduct financial counseling "prior to rendering of service in all entry points."
Audrain follows some of these recommendations. It offers a 5 percent discount to patients who can pay their bill within 30 days. The next option is an internal six-month payment plan at no interest. If the bill is $1,000 or more and the patient can pay only $50 a month, hospital staffers suggest bank financing. They make the papers available on the spot for a loan with an interest rate of 9 percent.
For patients who say they cannot pay the bill, Audrain analyzes their income and assets to determine whether they qualifiy for charity care. If they don't, the next-to-last stop is the collection agency. "If the patient doesn't cooperate," said Johnson, "then we will pursue legal action on the account."
By that point, she said, Audrain has "done everything we can to screen this person to see if they have the ability to pay their bills, and their willingness to pay their bills. There's a big difference between people who can't pay their bills and people who won't pay their bills."
Medicare rules don't help the situation, the hospital industry says. Years ago, Medicare compensated hospitals fully when older Americans didn't pay their share of the bill. But the government complained that hospitals, knowing that Medicare would eventually reimburse them, didn't try very hard to collect from beneficiaries.
In 1997, Congress decided to change the system and pay for only 50 percent of a hospital's Medicare losses. The legislation also required hospitals to try harder to collect unpaid bills from Medicare beneficiaries. After lobbying by the hospital industry, Congress changed the law, and now Medicare reimburses 70 percent of what hospitals can't collect from older Americans. But hospitals get nothing unless they've tried -- hard -- to collect the money on their own.
Because hospitals are required to treat Medicare beneficiaries and other payers equally, the American Hospital Association says that hospitals must also take bold measures to collect from the uninsured, or they will risk losing payments from Medicare. "The barrier is so great because the penalty is so great," said Mindy Hatton, vice president and chief Washington counsel at the AHA. "You can get kicked out of the Medicare program, and Medicare is such a significant payer," sometimes providing 70 percent of a hospital's revenue.
The staff at Audrain isn't heartless, Johnson says. "We don't want a patient leaving our facility saying, 'Oh, my gosh, how much is this going to cost?' They need to go home and heal."
Still, some patients feel helpless. Rose Shaffer, a registered nurse and grandmother of seven in Chicago, was working in 2000 at a home health agency that did not provide health insurance. Then she suffered a major heart attack, according to the SEIU report. Shaffer told Advocate South Suburban Hospital that she didn't have insurance, but she never received the financial assistance applications she says were promised to her. Instead, Advocate South sued her for $17,670, according to the SEIU.
"My heart attack and the bills threw my whole life out of kilter -- my house is in foreclosure, my debts have climbed," the report quoted her as saying. In the end, Shaffer filed for bankruptcy. "The hospital saved my life, and now they're trying to take it," she said.
Code Blue for Hospitals Hospitals don't deny there's a problem, but they argue they're feeling the financial heat. Hospitals have rapidly increased their sticker-price charges above costs, in part to recoup some of the losses from lower Medicare and Medicaid payments and from deep discounts demanded by insurance companies that offer managed care and other health plans.
Congress made matters worse in 1997, the AHA says, when the Balanced Budget Act further cut Medicare payments to hospitals. "It's a matter of government budget policy," said Coyle, adding that Congress promised hospitals they would receive full inflationary adjustments annually. Since then, however, there have been only two adjustments. "The bottom line is that government programs are not paying the full cost of caring for their patients," she said.
Meanwhile, in the early 1990s, managed care health plans began pressuring hospitals to take lower payments. Some of these pressures have been relieved, Coyle said, "but we're not back to the place where we were a decade ago."
And then there are the 43 million uninsured Americans. "The only lever hospitals have in meeting their needs is in setting charges," Coyle said. "We've got emergency readiness costs, our members are trying to wrestle with SARS. We've got all those drivers that raise hospitals' costs." The answer, says Coyle, is to do something about the uninsured. "What is troubling is that we have a lack of a system in America for providing coverage for everybody."
Several health care analysts said they believed that hospitals were increasing their charge-master rates quicker than ever, not to bilk the uninsured, but to extract more money from Medicare patients and privately insured patients.
Here's how it works. Medicare and some private insurers pay hospitals based on a diagnosis. So even though treatment costs can vary for different patients, based on severity and complications, Medicare pays the same for each patient with the same diagnosis -- unless a patient is extremely sick and requires significantly more care.
For those sickest patients, the ones who rack up the highest charges, Medicare and many private insurers pay extra "outlier" payments. To decide whether a patient qualifies for "outlier" payments, Medicare determines how great the difference is between the hospital's charges and its costs of providing the care. And here's the rub. The cost lists that Medicare uses to make this comparison are two years old. Therefore, if a hospital has sharply increased its charges, then those high charges of today will mark a greater difference from the two-year-old costs.
"They jack up the charges sky-high and use old cost-to-charge ratios, and they're benefiting from the float," said one health care analyst. "The system catches up to you in two years unless you raise charges again. After you raise charges by a high amount, you end up with charges that are amazingly high, but, by and large, no one pays the charges, so it doesn't matter -- except a few uninsured."
The Centers for Medicare and Medicaid Services took action earlier this year to shut down this practice. Indeed, they are now using more-up-to-date cost information to determine whether outlier payments are warranted.
Moreover, said the analyst, hospitals also increase charge-master rates to keep insurance payments up. Of course, every time insurers renegotiate their discounts with hospitals, they can negotiate larger discounts from the higher prices. But sometimes hospitals benefit from a lag time, said the analyst.
Regardless of why the charge-master rates are rising, the uninsured are caught in the middle. Even if Medicare changes its outlier rules, hospitals probably won't lower their charge-master rates, say health care experts.
Two large hospital systems, however, are making an effort. Tenet Healthcare is considering extending its insurer discounts to the uninsured. HCA hospitals, meanwhile, have adopted a graded scale of discounts for the uninsured.
But it's complicated. Tenet has asked the Centers for Medicare and Medicaid Services to bless the change so that Tenet will have some assurance it isn't violating Medicare rules. After several months, however, communications with Medicare have yielded no guarantees, says the AHA.
And Medical Savings Insurance's Suttles criticizes HCA's effort. "A 50 percent discount on a 500 percent-inflated price is still 250 percent inflated," he said. "Sure, if they give an extra discount, they look like a good guy."
So, what's the solution to this complicated problem? Hospital representatives say the answer is getting Medicare to pay more for medical services and somehow getting coverage to America's 43 million uninsured people. (Advocates for the uninsured share the latter goal.) Hospitals also want to see Medicare rules clarified, so that they can know what kinds of changes they can make in their charges without incurring penalties from the Medicare program.
Although the issue of coverage for the uninsured has received broad attention from Democratic presidential candidates, members of Congress have been tied up with other priorities, including creating a prescription drug benefit for Medicare beneficiaries.
The Energy and Commerce Committee will explore more-immediate solutions next year, according to the panel's staff. The SEIU says that hospitals should be required to report detailed financial information about where they get their revenues. In addition, states should play a greater role in overseeing and regulating hospital billing practices, according to the union. Illinois is considering legislation to require hospitals to provide services at cost to patients whose income is less than 300 percent of the federal poverty level.
Still, said Vladeck, the focus for a solution should be on the uninsured. "The real issue is that we have all these people uninsured and underinsured, and this doesn't work well for them."
Escalating Hospital Markups Hospitals charge the uninsured their top rates, some averaging more than 200 percent above actual costs. And hospitals have raised their top rates significantly over the past five years. This chart shows the average markup -- the percentage above cost -- in hospitals' charges to the uninsured in 2002 and in 1997.
Urban Rural 2002 1997 2002 1997 Nevada 255% 195% 111% 94% California 205 158 143 100 Alabama 196 150 153 123 Florida 192 152 179 152 Arizona 190 152 111 79 New Jersey 181 118 N.A. N.A. Pennsylvania 167 144 100 85 Kansas 163 124 70 53 Texas 162 125 107 80 Louisiana 157 113 107 88 Oklahoma 156 110 111 81 Illinois 155 111 105 71 Missouri 152 125 111 88 Alaska 145 93 48 29 Hawaii 144 118 93 89 Colorado 143 106 88 64 Dist. of Columbia 141 92 N.A. N.A. Nebraska 134 102 83 52 Arkansas 133 85 130 104 Tennessee 133 88 119 80 South Carolina 128 111 119 102 Mississippi 125 91 136 92 Wyoming 124 95 63 33 Virginia 122 102 84 96 Georgia 119 97 121 96 Michigan 117 106 78 71 Minnesota 117 77 71 59 Iowa 112 89 68 50 New Mexico 112 115 94 86 Kentucky 110 99 105 89 Rhode Island 106 73 N.A. N.A. Indiana 105 79 90 68 New York 105 76 68 53 South Dakota 104 85 81 56 Ohio 103 81 77 69 Connecticut 102 81 96 80 Utah 102 68 71 56 Montana 98 106 87 66 Massachusetts 95 80 79 68 North Carolina 95 87 115 111 Delaware 94 98 107 104 Wisconsin 93 68 68 54 New Hampshire 91 74 70 67 Oregon 83 71 73 57 Idaho 79 80 84 62 West Virginia 76 67 82 83 Maine 72 62 93 74 Vermont 72 64 67 77 Washington 72 51 68 50 North Dakota 64 54 80 49 Maryland 32 31 22 23 SOURCE: Percentages calculated from data collected by the Centers for Medicare and Medicaid Services Who Pays Hospitals What While the uninsured are charged top rates, Medicare, Medicaid, and private insurers pay significantly less to hospitals. This chart shows that in 2001, Medicaid paid the least, an average of 2 percent below hospital costs nationally. Medicare paid 1 percent below costs, while private payers (mostly insurance companies) paid 13 percent above costs.
Medicare Medicaid Private Payers (Mostly Insurance) 1991 -12% -18% 30% 1992 -11 -9 31 1993 -11 -7 29 1994 -3 -6 24 1995 -1 -6 24 1996 2 -5 22 1997 4 -4 18 1998 3 -2 14 1999 1 -3 12 2000 0 -4 13 2001 -1 -2 13 SOURCE: Percentages calculated from a MedPAC analysis of data from an American Hospital Association survey of members. National Journal