The Red Brick Times

How Hospital Costs Ran Amok

Hospital costs for uninsured Americans are ruinous, like nowhere else in the world. The Wall Street Journal recently pointed to a major reason: Hospitals gain a "charity" tax deduction for the difference between what they collect and their "list" prices. If they can actually collect the money, which they often do by threatening collection lawsuits, they make a tremendous profit. If not, then they deduct from taxable income their phantom "losses" from patients who don't pay.

So, for example, an ambulance ride with a "list cost" of $1000 could bring in $1000 from a patient who pays or a tax deduction of $1,000 from the patient who doesn't, which then can be deducted against other income. Furthermore, the "list" prices inflate other medical costs. The uninsured today are a major source of hospital profits, as detailed in J. Patrick Rooney and Dan Perrin's America's Health Care Crisis Solved. The book describes how a Denver hospital patient tracked down the charges for his treatment paid by medicare and health insurance companies, which totaled $6,000, compared to the $67,000 the hospital demanded.

Posted 5:54 AM by whatley (1) comments

       Comments:

A user revolution? A non-aligned, non-insured member group that, by sheer dint of numbers, can wield power equivalent to that held by the insurance companies to dictate payments. There is no lack of un- under-insured to populate such a group. Remeber the Lumberman's Insurance group? A co-op that gave insurance benefits on a socialized basis. Can people get along just well enough to insure themselves a healthy future?

# posted by  Andy : August 11, 2008 9:07 PM
 
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