top of page

Cost and value of medical care 

Healthcare value is the cost of quality healthcare services. Unlike other services and products, healthcare in general and hospital care specifically have historically lacked accountability and transparency about cost. With increasing co-pays and other expenses, it is more important for us as consumers to have an understanding of the value of the health care service we receive. While this may not be possible or advisable in some situations, i.e. emergency care and need for very specialized care, many situations do lend themselves to decision making based on value. Individuals, insurer and providers need access to information about the value of health care services to make informed decisions.

This section will help you learn about the cost and value of healthcare services provided by the hospital. The information includes co-pays and other charges. It also includes ways to get the best value.  



The legal requirement for price transparency


A provision contained with Section 2718 of the Patient Protection and Affordable Care Act (ACA) contains a requirement for all U.S. hospitals to make charge information publicly available.  This provision specifically states:

“Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups established under section 1886 (d)(4) of the Social Security Act.”


Has anyone seen/read this Washington Post article about the Health Affairs study on US hospitals price-gouging the uninsured? This seems to me like a gratuitous and intentional high cost of care. I would love to hear anyone's balanced perspective since reading this makes me feel like the hospitals should either pay a penalty fee or partially reimburse patients.


WP: June 8, 2015 By Lena H. Sun 
Fifty hospitals in the United States are charging uninsured consumers more than 10 times the actual cost of patient care, according to research published Monday.


All but one of the facilities are owned by for-profit entities and the largest number of hospitals — 20 — are in Florida. For the most part, researchers said, the hospitals with the highest markups are not in pricey neighborhoods or big cities, where the market might explain the higher prices...[please see attached link to full article]

Health Affairs abstract:
Using Medicare cost reports, we examined the fifty US hospitals with the highest charge-to-cost ratios in 2012. These hospitals have markups (ratios of charges over Medicare-allowable costs) approximately ten times their Medicare-allowable costs compared to a national average of 3.4 and a mode of 2.4. Analysis of the fifty hospitals showed that forty-nine are for-profit (98 percent), forty-six are owned by for-profit hospital systems (92 percent), and twenty (40 percent) operate in Florida. One for-profit hospital system owns half of these fifty hospitals. While most public and private health insurers do not use hospital charges to set their payment rates, uninsured patients are commonly asked to pay the full charges, and out-of-network patients and casualty and workers’ compensation insurers are often expected to pay a large portion of the full charges. Because it is difficult for patients to compare prices, market forces fail to constrain hospital charges. Federal and state governments may want to consider limitations on the charge-to-cost ratio, some form of all-payer rate setting, or mandated price disclosure to regulate hospital markups.


Attached resources:


bottom of page