Leaked Southern California records reveal huge 675% markups for health care: The Los Angeles Times

Filed Under: Costs, Health plans, Patients

Hospital Markup scam

“Ridiculous, seemingly arbitrary price markups are a defining characteristic of the $4-trillion U.S. healthcare system — and a key reason Americans pay more for treatment than anyone else in the world,” David Lazarus writes over at The Los Angeles Times. “But to see price hikes of as much as 675% being imposed in real time, automatically, by a hospital’s computer system still takes your breath away. I got to view this for myself after a former operating-room nurse at Scripps Memorial Hospital in Encinitas shared with me screenshots of the facility’s electronic health record system. The nurse asked that I not use her name because she’s now working at a different Southern California medical facility and worries that her job could be endangered. Her screenshots, taken earlier this year, speak for themselves. What they show are price hikes ranging from 575% to 675% being automatically generated by the hospital’s software. The eye-popping increases are so routine, apparently, the software even displays the formula it uses to convert reasonable medical costs to billed amounts that are much, much higher. For example, one screenshot is for sutures — that is, medical thread, a.k.a. stitches. Scripps’ system put the basic “cost per unit” at $19.30. But the system said the “computed charge per unit” was $149.58. This is how much the patient and his or her insurer would be billed. The system helpfully included a formula for reaching this amount: “$149.58 = $19.30 + ($19.30 x 675%).” David Lazarus, “Leaked SoCal records reveal huge automated markups for healthcare,’ The Los Angeles Times.