ER "Price Gouging" Affects Poor Women

It’s no secret that emergency room visits tend to be more costly than routine medical services — due to a combination of factors like the time and expertise of the personnel, the resources that it takes to resolve each visit, and the (prime) space dedicated to each patient. But a new study from researchers at the Johns Hopkins University School of Medicine suggests that ERs often charge adult patients far more than the Medicare standard, with many patients seeing a billing markup of 300 percent or more. While adults without health coverage are more likely to turn to emergency rooms in lieu of a primary care doctor, emergency room “price gouging” hits poor and uninsured patients the hardest, according to researchers.

The study looked at billing records filed in 2013 from some 12,000 emergency room doctors in more than 300 facilities across all 50 states to compare how much patients were actually billed to the maximum Medicare allowable amount. After accounting for price variations due to hospital size, location, for-profit status, teaching status, and safety-net hospital status, as well as the poverty rate and uninsured rate of the community served, researchers found that ERs routinely charged patients from 1 to 12 times what Medicare would pay for the same services. The report of the study findings was published this week in JAMA Internal Medicine.

That means a patient coming to an emergency room for a $100 treatment could see a bill for as much as $1,260.

In a Reuters interview, study author Tim Xu said that hospitals often take advantage of patient’s inability to comparison shop in an emergency:

It points to the practice of price gouging by hospitals because patients often can't pick their doctors in the emergency department. People usually can't plan for an emergency room visit so hospitals take advantage of that. They're more likely to set their prices higher.

According to the hospital’s official statement, the Medicare allowable amount was used as the cost standard because it includes the amount doctors are willing to accept from Medicare, the patient’s coinsurance or deductible, and the amount the patient (or any third party) would pay. Other studies have questioned that baseline, suggesting that the deeply discounted fees imposed by Medicare and Medicaid don’t reflect the true cost of delivering medical services.

But the research still points to a disparity in which patients are likely to be charged more to make up that shortfall. Hospitals serving a large African American population or a large proportion of uninsured patients were found to charge more than five times the Medicare rate, on average.

The findings have serious implications for uninsured women, given the current debate around the repeal of the Affordable Care Act and the possible rollback of insurance mandates on essential services including maternal care, cervical cancer screenings, and mammograms. Not having insurance won’t stop women from needing these services, and many have argued that repealing the ACA will make emergency rooms the de facto primary care centers for millions of uninsured women. With the average out-of-pocket cost for delivering a baby up by more than fourfold over the last ten years, these findings suggest that women could face huge “surprise” bills after giving birth — and that those bills might be artificially inflated.