Many U.S. consumers are unaware of how and what hospitals charge for their medical care, even as they are responsible for a growing share of health care costs, the New York Times reports.
Experts say that hospital charges are the most confusing and often are completely unrelated to the cost of providing the services. The charges also bear no relation to the amount an insurer will reimburse a hospital or health care provider. Wide variations in prices exist even among patients who receive the same medication and services, according to the Times.
With the exception of Medicare and Medicaid, experts say that the amount paid for services is based on the market power of the insurer and the negotiating power of providers. Larger insurers that command more market power can negotiate lower reimbursement rates, while well-regarded hospitals can command higher prices from insurers. As a result, consumers affiliated with larger insurers tend to be charged less, while the uninsured -- who typically have no bargaining power -- are charged more, according to the Times.
Though consumers are told to shop around for quality care at the lowest price, experts say this information is not always easily accessible. Provisions in the federal health reform law require insurers to provide more detailed information on a plan's benefits and coverage. However, it is unclear how effective that provision is for those comparing the cost of medical services, according to the Times (Bernard, New York Times, 6/22).