A disturbing number of California hospitals appear to be overcharging patients and arent being held accountable for it, according to a new report commissioned by the Pacific Business Group on Health and the California Public Employees Retirement System, or CalPERS.
Based on 2005 hospital cost data reported to the state, the report found that private-pay patients insured through their workplace pay up to 40% more than they should for hospital care to make up for shortfalls in Medicare and Medicaid payments and for costs of uncompensated care.
Some hospitals in California charged five times higher than others, even after adjusting for wage differences between regions. Statewide, in 2005, private payers paid a total of $18 billion for services provided by the hospitalseven though it cost the hospitals about $13 billion to provide these services, according to the report, conducted by Milliman, a healthcare consulting and actuarial firm in Seattle.
This report underscores what we have long suspected: that some hospitals are basing their prices to private insurers and patients on what they can get away with, Peter Lee, chief executive officer of the San Francisco-based Pacific Business Group, said in a written statement. CalPERS and Pacific Business Group, an association of 50 large purchasers of healthcare responsible for $10 billion in annual healthcare expenditures, said they would press for more transparency in hospital pricing.
The California Hospital Association could not be immediately reached for comment. -- by Rebecca Vesely
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