5 local hospitals answer study's findings of 'gouging'

June 09--TAMPA -- Researchers have compiled a list of the 50 hospitals in the United States with the highest markups over their actual costs, and 20 of those hospitals are in Florida -- with five in the three-county Tampa Bay area.

The researchers said a lack of regulation of hospital charges and no market competition is leading to "price gouging" that is trickling down to nearly all consumers.

The local hospitals are St. Petersburg General Hospital, 16th on the national list with an average markup of 1,020 percent over costs; South Bay Hospital in Sun City Center, 26th with a 970 percent markup; Brandon Regional Hospital, 33rd with a 960 percent markup; Regional Medical Center Bayonet Point in Hudson, 42nd with a 940 percent markup; and Bayfront Health Dade City, 45th with a markup of 930 percent.

The research was compiled by Gerard Anderson of the Johns Hopkins Bloomberg School of Public Health and Ge Bai of Washington and Lee University. It is published in the June issue of the journal Health Affairs.

"There is no justification for these outrageous rates, but no one tells hospitals they can't charge them," said Anderson, a professor of health policy and management, in a statement on the research. "For the most part, there is no regulation of hospital rates and there are no market forces that force hospitals to lower their rates. They charge these prices simply because they can."

Hospitals questioned the validity of the research, saying charge-to-cost ratios are not relevant measures of what consumers, insurers or the government actually pay for services.

"All hospitals are required to maintain a charge master, or a list of prices, for the numerous services they provide," said Tomi Galin, spokeswoman for Community Health Systems, the publicly traded parent of Bayfront Health Dade City. "However, these charges rarely reflect what consumers actually pay for their healthcare."

Hospitals are required by the federal Centers for Medicare and Medicaid Services to have that list of billing rates. The government and health insurers use the list to negotiate lower rates with hospitals for services. The full-price list theoretically applies only to the uninsured or people who are receiving care outside of their insurance network.

But Community Health System's Galin said every hospital in the company's network offers discounts for uninsured patients and charity care for those who qualify. Last year, Community Health Systems hospitals provided over $3.3 billion in charity care, discounts and uncompensated care, she said.

Hospital Corporation of America, the publicly traded parent of the four other locally based hospitals on the list, responded much the same.

"The amount patients pay for hospital services has more to do with the type of coverage they have than prices listed in the charge master," said J.C. Sadler, spokeswoman for HCA West Florida. "As the study notes, government programs like Medicare and Medicaid determine how much they reimburse hospitals, and insurance plans negotiate rates.

"Uninsured patients are eligible for free care through our charity program or they receive our uninsured discount, which is similar to the discounts a private insurance plan gets. In addition, we were one of the first hospital companies to make detailed pricing information publicly available on our web site," Sadler said.

But the researchers said 30 million uninsured Americans would stand to be charged the full rate. Health care cost is the single largest cause of personal bankruptcy in the United States, and vulnerable patients also face damaged credit or simply avoid needed medical services, they said.

Jay Wolfson, a professor of public health and medicine at the University of South Florida, read the Anderson-Bai research with a cautious eye.

"There are all kinds of ways to shake and bake this data, as you can imagine," said Wolfson, who researches and writes about health care law, ethics, policy, technology safety and finance. "I think it's an important statement, but I think you have to dig a little deeper into the data, and avoid using words like 'gouging.'"

He said hospital charges are always more than a hospital gets paid "for all kinds of reasons." Hospitals cost-shift to subsidize categories of care that are not reimbursed or are reimbursed at a fraction of the cost.

What was not reported in the study, Wolfson said, was how patients and families in those hospitals were affected by the charges and collection practices of the hospitals.

The research was released as debate over the Affordable Care Act continues to echo. As part of his signature legislation, the administration of President Barack Obama has been publishing the costs of popular procedures in an effort to get consumers to comparison-shop. Advocates say transparency would help control rising health costs.

Meanwhile, Florida has been in a standoff with the federal government over Medicaid expansion under the Affordable Care Act. And Gov. Rick Scott is facing off with public hospital chief executives who are pushing the expansion, going as far as forming a commission to collect and share data on hospital profitability and grill executives on their hospitals' performances.

Scott's Commission on Health Care and Hospital Funding comes to the University of South Florida on June 17.

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'High markup' Florida hospitals

Among 50 hospitals nationwide, based on research published in the journal Health Affairs.

Rank -- Hospital -- City -- Average Markup -- Parent Corporation

1 North Okaloosa Medical Center, Crestview, 1,260% (CHS*)

3 Bayfront Health Brooksville, 1,250 (CHS)

7 Heart of Florida Regional Medical Center, Davenport, 1,150 (CHS)

8 Orange Park Medical Center, Lakeside, 1,140 (HCA**)

10 Oak Hill Hospital, Brooksville, 1,100 (HCA)

12 Fort Walton Beach Medical Center, 1,060 (HCA)

16 St. Petersburg General Hospital, 1,020 (HCA)

20 Sebastian River Medical Center, Sebastian, 990 (CHS)

22 Osceola Regional Medical Center, Kissimmee, 980 (HCA)

25 Gulf Coast Medical Center, Panama City, 980 (HCA)

26 South Bay Hospital, Sun City Center, 970 (HCA)

27 Fawcett Memorial Hospital, Port Charlotte, 970 (HCA)

28 North Florida Regional Medical Center, Gainesville, 960 (HCA)

31 Lawnwood Regional Medical Center & Heart Institute, Fort Pierce, 960 (HCA)

33 Brandon Regional Hospital, 960 (HCA)

37 Lehigh Regional Medical Center, Lehigh Acres, 950 (CHS)

39 Twin Cities Hospital, Niceville, 950 (HCA)

42 Regional Medical Center Bayonet Point, Hudson, 940 (HCA)

45 Bayfront Health Dade City, 930 (CHS)

49 Kendall Regional Medical Center, Miami, 920 (HCA)

*Community Health Systems, **Hospital Corporation of America

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