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How Hospitals Price Gouge Americans and Rake in Billions

Time Magazine recently profiled a half dozen patients, most of whom were uninsured or underinsured, and the the astronomical prices that they were charged by hospitals, even though the same hospitals would accept much lower payments from insurance companies or Medicare.

In the article, one patient paid $239 for a blood test, but if the patient had been 65 or older and on Medicare, the hospital would have accepted $13.94 for the same blood test.

Some of the more absurd charges include one patient who was billed $3 for the pen used to mark the place where the surgeon would perform surgery, $31 for the strap to hold him to the operating table and $32 for a blanket to keep him warm during surgery.

Another patient was charged $13,702 by MD Anderson Cancer Center in Houston for a cancer wonder drug called 'Rituxan' that Time Magazine estimated MD Anderson
paid $3,000 to $3,500 for.

MD Anderson charges $283.00 for a “CHEST, PA AND LAT 71020,” which is a simple chest X-ray that costs a Medicare patient only $20.44.

When asked by Time Magazine about their enormous price gouging, MD Anderson stated: “The issues related to health care finance are complex for patients, health care providers, payers and government entities alike … MD Anderson’s clinical billing and collection practices are similar to those of other major hospitals and academic medical centers.”

Even though MD Anderson calls itself a "non-profit" hospital, its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531 million.

The president of "non-profit" MD Anderson is Ronald DePinho, whose total compensation last year was $1,845,000.

Time Magazine also reports that 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center are paid over $500,000 a year, including six who make over $1 million.

The McKinsey & Co. consulting firm did a study that concluded that America spent more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia.

France and the U.K. are often demonized for their 'socialized health care" by Republicans, and yet their quality of care ranks much higher than the U.S., according to the World Health Organization.

The McKinsey & Co study also said that the U.S. spent $60 billion cleaning up after Hurricane Sandy, which is about the same amount Americans spend in one week on health care. 

Thanks to medical industry lobbyists, Congress forces Medicare to pay 25% to 75% more for canes and wheelchairs than it would cost at Walmart.

Speaking of lobbyists, the Center for Responsive Politics reports that the pharmaceutical and health-care-product industries have spent $5.36 billion since 1998 on lobbying in Washington D.C.

That's far more than the $1.53 billion spent by the defense and aerospace industries or the $1.3 billion spent by oil and gas industry over the same time period.

The health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington D.C., and Americans wonder why their medical bills are so high?

Source: Time Magazine


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