November 20, 2020
By Seth Sandronsky
Hospital charges were spiking before COVID-19 hit the U.S. A new study from National Nurses United/California Nurses Association (NNU/CNA) looks at Medicare cost reports for 4,203 hospitals in fiscal year 2018. These hospitals “are charging on average over $417 for every $100 in their total costs.”
The study, “Fleecing Patients: Hospitals Charge Patients More Than Four Times the Cost of Care,” was released on Nov. 17. “This is one of the most egregious examples of what you have with a system based on profit, not patient need,” Chuck Idelson, spokesperson for the NNU/CNA, told MultiBriefs by phone.
A case in point is patients who need healthcare but avoid it due to hospital costs. That is especially risky during the COVID-19 pandemic, which is exploding across the U.S.
However, such patient avoidance behavior reflects a 20-year trend in an industry where cost inflation is going up, Idelson said. “Hospital expenditures as a percentage of national health expenditures have increased from 30.8% in 1999 to 32.7% in 2018,” according to the NNU/CNA study.
The U.S. Centers for Medicare and Medicaid Services keeps track of the nation’s health expenditures. “U.S. health care spending grew 4.6 percent in 2018, reaching $3.6 trillion or $11,172 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 17.7 percent.”
Mom-and-pop shops coping with razor-thin profit margins during the public health crisis of 2020 struggle to pay these medical bills. “This study clearly documents what small business owners already are very concerned about — the high cost of healthcare,” Frank Knapp Jr., co-chair of Small Business for America’s Future, told MultiBriefs by email. “A recent Small Business for America’s Future found that 71% of small business owners say lowering healthcare costs should be a top priority for policymakers and they are willing to explore almost any solution to this crisis.”
In the short term, questions about the way forward for small enterprises and their customers, actual and potential hospital patients, remain relevant. In terms of startup businesses, for example, healthcare spending is no small factor facing fledgling entrepreneurs.
Consider this. What happens to patients when they are unable to pay their hospital bills? Hospitals sell patients’ debt to collectors, garnish hourly wages, and use other tactics. One is going to court to place liens on patients’ homes.
A solution is Medicare for All, according to the NNU/CNA study. Jean Ross is NNU/CNA president. (On the campaign trail for the White House, President-elect Joe Biden opposed Medicare for All, stating that he would refuse to sign such a bill.)
“Medicare for All will not only guarantee health care coverage for every person in the United States,” she said in a statement, “it will end medical bankruptcies, medical debt lawsuits, and the health insecurity faced by millions who make painful choices every day about whether to seek the care they desperately need.”
The American Hospital Association, which advocates for hospitals and healthcare networks, declined a request for comment.