Try to avoid breaking any limbs in Crestview, Florida. You might wind up in North Okaloosa Medical Center, which charges 12.6 times, or 1,260 percent, more than what it costs the hospital to treat patients.
North Okaloosa, along with New Jersey’s Carepoint Health-Bayonne Hospital, tops the list of the U.S. hospitals with the highest markups for their services, according to a new study in Health Affairs. The study found that, on average, the 50 hospitals with the highest markups charged people 10 times more than what it cost them to provide the treatments in 2012.
Where Are the 50 Hospitals With the Highest Markups?
On average, all U.S. hospitals charged patients (or their insurers) 3.4 times what the federal government thinks these procedures cost. “In other words, when the hospital incurs $100 of Medicare-allowable costs, the hospital charges $340,” explain the authors, Ge Bai of Washington and Lee University and Gerard F. Anderson of the Johns Hopkins Bloomberg School of Public Health. The ratio of hospital charges to costs has only increased over time: In 1984, it was just 1.35, but by 2011, it was 3.3.
In the study, the facilities that marked up their prices the most were more likely to be for-profit (as opposed to not-for-profit), urban hospitals that are affiliated with a larger health system. Community Health Systems operates half of the 50 hospitals with the highest markups. The U.S. Justice Department has investigated the Franklin, Tennessee-based hospital chain for the way it bills Medicare and Medicaid. In February, the company and three New Mexico Hospitals agreed to pay $75 million to settle a case in which Community Health Systems was accused of making illegal donations to county governments, which were then used to obtain matching Medicaid payments.