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Who pays for hospitals’ high prices? | Marketplace.org

A new Johns Hopkins University study published Monday in the journal Health Affairs says that a number of mostly for-profit hospitals are charging certain groups of patients ten times the rates paid out to Medicare for the same procedures.

The key thing to understand in the realm of hospital pricing is negotiation, or rather, the lack of negotiation.

At hospitals, there’s a price that Medicare pays for its patients, and then there’s the list price charged to everyone else, usually about three times higher.

Dr. Gerard Anderson, director of the Johns Hopkins Center of Hospital Finance and Management and coauthor of the study, says some hospitals mark up their prices about ten times, and some are stuck with that sticker price “because the auto insurers and the workers’ compensation insurers are not able to negotiate prices.”

And that means higher workers’ compensation and automobile premiums for everyone else. The study says this also pushes up costs for everyone else because hospitals can say they’re regularly underpaid when negotiating prices.

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Who pays for hospitals’ high prices? | Marketplace.org.

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