Markups on Care Can Fatten Hospital Budgets–Even If Few Patients Foot the Full Bill

April 7, 2017

(Kaiser Health News) – Few patients pay a hospital’s full price for a procedure or test. But a new study shows why those charges still matter. Economists at the Federal Reserve Board and the American Enterprise Institute found that list prices, often dismissed as meaningless by the hospital industry, are a critical gauge of which hospitals ultimately receive higher payments. An additional dollar in list price was associated with an additional 15 cents in payment to a hospital for privately insured patients, according to the study, which relies heavily on data from California. It was published Monday in the journal Health Affairs.