Thrills, Chills and Hospital Bills: Maybe They’re Not So Crazy After All

The other day, I examined the pointlessness of a class-action lawsuit ordering Scripps Health hospitals in San Diego to give post facto discounts to uninsured patients who had been charged “too much”, even though most of them had not paid their bills anyway!

Today, we learn the overall payment to charge ratio for uninsured versus insured, Medicare, and Medi-Cal (Medicaid) patients in California hospitals from 2001 through 2005. The authors conclude that, in 2005, private insurers paid about 38% of charges, while uninsured patients paid about 28%, Medicare 27%, and Medi-Cal 27% (from Exhibit 2 on p. w119).

It is an interesting finding: my previous entry points out that most uninsured patients, presenting at ERs, at least, do not pay their bills. So, there must be a fraction that pays the oversized (undiscounted) bills that hospitals often present uninsured patients. Despite this skewness, uninsured patients do end up paying less than privately insured patients, but more than Medicare and Medi-Cal patients, on average.

This confirms what I argued in my paper on the California Health Care Deforminator, ABX1 1: uninsured patients are not such a great burden on hospitals as they claim, which they do in order to demand mandatory “universal” health care. A tiny 5.5% of adjusted patient days were accounted for by uninsured patients during the period. The article reports a charge to cost ratio of about 3.8 in 2005. So, if uninsured patients paid 28% of their bills, on average, that accounts for 106% (0.28*3.8) of the costs they incurred!

In my paper on ABX1 1, I argued that California hospitals are likely profitable, and have little need of a government bail out via mandatory, “universal” health care. This latest article confirms that finding.

(In case the link dies, the article is Glenn A Melnick & Katya Fonkych, “Hospital pricing and the uninsured: Do the uninsured pay higher prices?”, Health Affairs, Vol. 27, No. 2, Web Exclusive, February 5, 2008, pp: w116-w122.)

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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