Rising deductibles and out-of-pocket costs are increasingly leaving patients responsible for bloated medical bills, writes Axios. A new analysis by Johns Hopkins University (JHU) reveals that many of the top 100 hospitals by revenue in the U.S. use predatory tactics to pursue patients with unpaid bills.
Medical debt comprises 58% of all debt collections in the U.S, with some of the top 100 hospitals being huge contributors to the problem. Between January 2018 and July 2020, these hospitals filed tens of thousands of lawsuits and other court actions against patients. According to JHU’s data, these patient lawsuits are most prevalent among governmental and nonprofit hospitals. Nonprofit hospitals enjoy tax exemptions in exchange for charitable measures, but our analysis shows that most of these hospitals have failing grades on the Lown Institute Charity Care Rating, meaning they’re not meeting their obligations.
Axios highlights how private hospitals make their money, through massive markups. Most hospitals charge more for a procedure than what it costs them. The top 100 hospitals, on average, charged patients 7x the cost of service, with markup calculated from the American Hospital Directory’s cost-to-charge ratio. Private hospitals have significantly higher markups than governmental or nonprofit hospitals private, with for-profit hospitals averaging nearly a 12x markup.
For their analysis, Axios used data collected by Johns Hopkins University. Data was collected on the largest 100 hospitals in the U.S. by revenue for the time period of Jan. 1, 2018 to July 31, 2020. Data on lawsuits and other court actions against patients was gathered from state and county court records. The average bill markup was found by taking the ratio of a hospital’s total costs to charges as listed in the American Hospital Directory.