Have you ever bought a car? Did you pay full sticker price or did you bargain with the dealer? Most people realize that the price is negotiable. If you drive a hard bargain, you can often save thousands of dollars off the listed price. Only a chump would pay the full asking price.

If you have to go to a hospital, the price of almost everything is marked up way more than a new car. An aspirin pill that costs a few pennies in the drugstore could cost anywhere from $5 to $20 per dose depending on the hospital.

Most people never notice such inflated prices because they never look at the itemized bill. That’s because an insurance company pays the lion’s share first. The patient may be responsible only for a modest co-pay.

Insurance companies and the government (think Medicare or Medicaid) arm-wrestle hospitals over costs. These big players have enough clout to negotiate a steep discount on the “list price.” Research published in the journal Health Affairs (May/June 2007) spills the beans [http://content.healthaffairs.org/cgi/content/abstract/26/3/780]. In 2004, Medicare paid only a third the amount hospitals charged individuals paying out of their own pockets. Insurance companies get almost as much of a discount.

This is the most unfair system ever devised. People who cannot afford health insurance and are not eligible for Medicare or Medicaid must pay way more than anyone else.

Think of it this way. A small businessman, say a painter or a garage mechanic, who cannot afford $500 a month for health insurance premiums, suddenly develops a life-threatening heart valve problem that requires surgery. Medicare would pay roughly $38,000 for this hospitalization. But our hypothetical middle-class tradesman could be charged $115,000 for the same care. Where is he going to find that kind of dough?

Those without insurance who must pay out of their own pocket get stuck with the biggest bills. Does that make any sense at all? Some hospitals will negotiate small discounts, but they may not go out of their way to inform prospective patients that this is an option. Very few will offer individuals the same kind of deal they routinely give big insurance companies.

How would you feel if you discovered that people who worked for IBM only paid $12,000 for a Toyota Camry that you had to pay $36,000 for? A car is not a matter of life and death. But a heart valve replacement is not optional.

Nearly 50 million Americans have no health insurance. There is something very wrong with a system that charges these folks so much more than everyone else.

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  1. dd

    I went to the hospital for them to do a blood test and give me a motrin for $7,000, which they billed to the ins company but as you know they will be lucky
    to get $500.
    If they were to send this bill to me, it would go right in the trash.
    Our medical industry is so very corrupt. When you are admitted, in no time is the administrator looking for you to obtain your insurance info that they hope you have. When they hear “self pay” they give you an aspirin and send you on your way and try to send you a $10K bill that they hope you will pay. Yeah, right… keep wasting your stamp.

  2. pillagedbyER

    1 visit to GHS emergency room for chest and back pain…1 person draws some blood…1 person hooks you up to an EKG…1 doctor comes to tell you your heart is fine, talks to you for 1 minute and prescribes you Flexaril as a skeletal muscle relaxant…1 bill comes for $3,791.50. All of this for….1 misdiagnosis…1 unnecessary prescription…1 more visit to emergency room.
    Next visit…1 doctor asks you to take off your shirt, looks at you and says you have Shingles… prescribes multiple pain relievers and an anti-viral. I cannot wait to get the second bill because I sure as hell am not paying the first. The second has made me able to deal with life without suffering so probably will pay that one but god forbid I get another multi-thousand dollar bill for the 15 seconds I saw a doctor along with being handed multiple prescriptions.
    I already knew there were authorized criminals throughout America but this will be the first time I got robbed legally myself. If they did all that to keep me from having a heart attack as supposed…then all I did was earn them some money so that they could in return ensure I have one by sending the bill.

  3. R. F.

    “3 Stitches – $1300” — Kalamazoo, MI
    My brother doesn’t have any health insurance. He mows yards and makes enough to live on but can’t afford any insurance, even a ‘high-deductible’ plan. Fortunately, he is very healthy – – but cut his finger recently, small gash, no nail involvement nor nerve problems.
    When he went to the E.R., he got a tetanus shot and 3 stitches put in by the medical student or resident. He had told the E.R. he wanted the minimum done and that he couldn’t afford much as he was self-pay. My brother said that the E.R. doctor spent less than 5 minutes with him, and that the doctor laughed and said that if he reduced the bill “it would be “fraud”.
    Bill was $600 from the hospital, and $700 from the E.R. doctor (99284, 12001).
    As I am in the health field and realize what Medicare rates are, I called the Billing Departments on behalf of my brother and tried to negotiate this very high bill to Medicare rates. They both said the “he didn’t have Medicare” and that he could fill out two 4 page forms to see if they would consider reducing his bill. That’s right, fill out 8 pages to see if possibly that would make the rate fair! My brother wasn’t asking for charity, but he shouldn’t be made a fool to pay an exorbitant rate.
    How unfair! Here is someone working, who would pay several hundred dollars to obtain the care he needed and yet is billed OVER 3 TIMES THE MEDICARE ALLOWABLE RATE!
    I keep reading about legislative directives to make things fairer for those without insurance. Perhaps the fairest thing would be to allow the uninsured to pay a fair rate, that is, to pay the same amount that everyone else is paying (insurance, Medicare, Medicaid).
    To whoever is writing the laws trying to help the uninsured — Please remember that it doesn’t matter what we are “charged”, as few hospitals and providers are paid that amount. It only matters the amount that the hospitals and providers are accepting as payment. By the way, both the hospital and the E.R. physician Billing Departments wanted me to know it was ‘fair’, as they ‘charge’ everybody the same rate. Too funny!

  4. Brandon W.

    I just took my daughter to the hospital in fear she may have had a concussion from a fall we did not see. Next day she vomited twice. So went to the er. After she sat in a room for 45 talking to a doctor for 20 minutes, we got billed $1227 for the er room, $188 for the doctor fee and $222.70 for 2 nausea pills she didn’t even need cause she wasn’t nauseous at the time. Charges like this especially for a 5 year child should be criminal.

  5. JTB

    My brother broke his arm (small fracture) and he waits like 5 hours then they come to put a cast on then they put it on he comes home then every Friday for 4 weeks he has to get a check up and when we got the bill it was like 2700$ plus 200$ for the 4 checkups so the bill with taxes was like 3000$ all they did was put on a cast and it costs 2700$ that is dumb. How would it cost 2700$ just to put on a cast? I seriously think that is both offensive and wrong and he had to wait 5 hours that is why I am cautious because I don’t want to have to suffer both physically and emotionally cause it is very expensive.

  6. AMP

    I recent went to a Memorial Hospital in my town after cutting my wrist at a restaurant. After being ignored and about to leave I was told I had to see a discharge Nurse to leave I saw a nurse and doctor Assistant who stitched up my wound with six stitches.
    The hospital Charged $1057.00 to sit on a bed and $345.00 for someone who never went to medical school this is ridiculous

  7. joseph a. c.

    Was constipated for 2 days and started to worry. My wife said “lets go to the emergency” Checking in I suggested an enema. They took me to a room and gave me an MRI. After a 5 hour wait I asked again about an enema which they did with success. Received the bill from the hospital for $10,255.82. I think I was the victim of a “rip off” I am 79 years of age and I can understand why medicare is going broke. I didn’t know where to take this, but maybe 7 on your side can do something about scams like this.
    Thank You,
    Joseph A. Cliff

  8. D.S.

    Just had my first and last visit to an emergency room …without insurance. I was there for 1 hour and 10 minutes, the only thing that touched me in that time was a blood pressure cuff….refused all other tests because no one could or would give me any kind of estimate as to the expense…bill came in today $1555.75…of course they will except payments….bought a tarp to lay down on next time I feel like it might be the end so I am easier to clean up…something has to change.

  9. WL

    I have had two major surgerys in the last 6 years. The first happened one month after I had arrived in the city where I live now. I was homeless and made the choice for life.
    When the bills started comming in I went over them and found I was double charged for the sergon’s services, once by the hospital and once by the doctor. I asked is this legeal, I was told it was.
    I tried to explain that I had just gotten into town at the beginning of the month. That didn’t matter, the man on the other end was nasty and very condesending and refused to accept what I could pay. I was willing to go to work for them, to pay off my bill, but they refused.
    Every single person I owed money to I told them I would be willing to work for them to pay off my bill.
    They all refused and then they got nasty about it.
    It took me over a year to find my first job in this city by the way.
    I got sued by the hospital. I had no way to pay it.
    I tried. I called all of them for months telling them about the jobs I was applying for and asked the people who watched me trying to get work write letters so that these people would know I am trying to pay my bills here.
    Then everybody just stopped sending anything. It all went to collections. I tried to work with them so I could pay what I owed. They wouldn’t accept my money.
    they refused to work with me. It was as if they wanted me to stay in debt so they could punish me for having to have surgery with no insurance.
    Well here it is six years later, and I am being sued by the doctors clinic and the rest of the doctors involved in the orignal surgery.
    They garnished my bank account and now I have to figure out how to deal with all of this.
    When I got the first summons connected with this, I couldn’t get a hold of anyone because all their offices were closed by the time I got home from work.
    I tried when I first got my bills to be honorable.
    I tried to do the right thing.
    But they wouldn’t work with me or help me figure out how to pay the bill and still eat.
    If they had let me work to pay the bill I would have been happy to do so.
    I was under the impression when I got sued the first time all of this was in there too.
    I don’t want to be in debt, but it would seem that the medical system really wants that bad.
    If they really wanted their money, they would accept what you could afford, and be understanding about how hard it is to recoup when your trying to figure out how to live and pay these outragously high bills that come after surgery.
    The last surgery I got lucky with, the doctor of all people told me that the hospital had a program I might qualify for to have my bill forgiven. Thankfully my bills assoicated with that all got forgiven. I got lucky, I had a good doctor who cared enough about me to tell me there was help.
    The first hospital had the same program, but no one bothered to tell me so that I could at least try to see if I qualified for it.
    It all boils down to this, somewhere along the line many of the people who work in the medical feild have forgotten that medicine is not about money, but about healing the sick.
    It is a sad state of affairs when you have to consider dying instead of getting help because you know that thoes people who are sworn by an oath they took to harm none and value life, are the same people who will make your life a living hell after you have the life saving surgery.

  10. PFS

    There is no fairness in this system. No one should lose their jobs, home or wages because of being unable to pay huge medical bills. It’s not like buying a car…that is a choice. Illness is not a choice. People who are unable to pay what the hospital or doctor wants are treated worse than a criminal.

  11. bk

    Medicare is my primary & union ins. I pay big premiums for is 2nd. Why is medicare paying largest amount & ins I pay monthly pays very very little. Shouldn’t it be half & half at least, then medicare wouldn’t be going broke.

  12. P

    Here’s a better one–in NY, not only do you pay more for the servicce if you are uninsured, you also get charged 8.95% for being self-pay!

  13. STP

    Still reading your blog. Lots of interesting things here. I have an experience with this particular topic, from the offending side, you might say.
    Several years ago I worked for our local hospital’s collection department.
    Please don’t “boo” me just yet.
    After about a year I left that job, and one of the reasons I left was because of the un-fairness of how paitents are billed.
    According to my beloved boss, who has since passed away, this is how the billing works.
    Insurance pays a pre-negotiated rate for customer #1, Customer #2 Can’t pay, Customer #3 Won’t pay, so Customer #4 Gets Charged 3 to 4 times the going rate to make up for the difference in what insurance didn’t pay for Customer #1 (the negotiated rate) and for customers #2 and #3. #4, of course, being the pitiful soul who can’t afford insurance but has a wage earning job that could be garnished, so he is the most likley to get tagged with the bill. Not very nice, not very fair and in my opinion, possibly criminal.
    Again, in my opinion, if it were me facing these bills and if I could prove that someone else is getting the same service for 3 to 4 times less, I believe I would consider suing that facility for discrimination.
    Thanks for letting me share.

  14. Paul Salmon

    I had to laugh at the ignorance in the statement that someone finds it inexcusable not to carry a high deductible insurance policy. That shows how little he/she knows about healthcare insurance policy costs. I worked for an insurance company and it is absurd the monthly cost for individual policies, regardless of the deductible, especially if the individual is over 40 years old and has any past medical history that will affect the individual’s rating for the policy. There was a couple (husband and wife), who were 48 years old… they elected the highest deductible policy available at the time (this was less than 2 years ago); their monthly premium equalled $2,800. I find that ridiculous.
    It’s not the hospitals to solely blame. There is so much Medicare fraud that occurs in this country, it’s ridiculous. Check with the Dept. of Justice with each state to find out how much money is recouped each year with Medicare fraud. It’s unbelievable.
    Every state has a UCR (Usual, Customary, and Reasonable) charge allowed for practically every service (CPT code) performed in hospitals or any medical entity. Each state has an allowed amount for each service (it varies a little bit for each state). If you don’t have insurance coverage, simply ask the doctor, surgeon, and/or hospital to only charge you the allowed amount(s) for services rendered (the allowed amount is the amount the insurance companies get reimbursed). They may not do it, but it doesn’t hurt to try.
    People don’t look at the Pharmaceutical companies or the companies who provide medical supplies… they are the worst for driving up costs. Look at how much medications cost. Look at how many people in this country take Ambien (a sleeping pill), yet, there is no generic out there for it. Anyway, I’ve said too much, but there are many medications that are life-sustaining drugs that are ridiculous in cost, yet, nothing is done about it. Check it out for yourself. How about making these Pharmaceutical companies giving money to healthcare for the uninsured. Just a thought. -paul

  15. caroline collins

    At age 49 and with no pre-existing conditions, not smoking, not overweight, the lowest premium my husband could find was $176/month. For someone who makes $8/hr,taking home about $1200/month, that’s more than ten percent of their income! In Canada the premiums for a family of 3 with full coverage–not a “high deductible” plan, is under $100/month.

  16. Lisa

    I am one of those without insurance, my husband and son are too, sadly this is the pathetic healthcare system that the richest country in America offers to its citizens. Is it working? Obviously not, will it ever work? That depends on who you ask and who is reaping the benefits. Can you say insurance companies? As long as nothing is done about this crisis there will be more and more Americans dying young and simply giving up. I have chosen the latter. I feel sorry for my son’s future, it looks nothing but bleak not only for the healthcare woes but the amnesty issue as well.

  17. Bettye Davis

    It is terrible for hospitals to take advantage of people who cannot pay these exorbitant hospital bills. Even more so that illegals can get emergency room care free.
    I know to check hospital bills for outrageous charges.

  18. Tammy

    I personally think that it would only be inexcusable if the insurance companies had affordable prices – some people only have a limited income and may not be able to pay thoses types of prices.
    Maybe everyone should get together and file some sort of civil suit to force hospitals to change their corrupt pricing methods as this is what seems inexcusable!

  19. Keith Gormezano

    It is also a good idea to find out if your hospital is required under state law as is the case in Washington State to write off the bills of patients making less than the poverty level or reduct them if they are making between 100-200% of this level.
    Personally, I find it inexcusable not to carry a high deductible health insurance. They don’t cost that much.

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