Betsy Ryan is president and CEO of the New Jersey Hospital Association. Her blog, Healthcare Matters, examines the many issues confronting New Jersey's hospitals and their patients. Readers are encouraged to join the discussion, because healthcare matters - to all of us.

System Suffers When No One is Willing to Pay Fair Share for Healthcare

There have been some news headlines recently about hospital “charges.” Chances are you’re not affected by this issue, because only about 4 percent of patient cases are actually affected by these charges. It’s complicated, but it’s important to remember that what a hospital lists as its charges and what it actually gets paid for its healthcare services are two very different things. Charges are like the “list price” for hospital services. In all but a very small number of situations, those list prices are ratcheted down dramatically by insurance companies or government health programs.

For example, government programs like Medicare, Medicaid and the state’s charity care program all pay hospitals less than their costs for the care they provide to patients in those three programs. Yes, hospitals lose money when they care for a patient on Medicare, Medicaid and charity care. HMOs and other insurance companies also try to drive down payments to hospitals.

Unfortunately, hospitals’ high charges are the result of a broken system in which no one wants to pay their fair share for healthcare services. Hospitals have worked hard to address this problem by voluntarily adopting billing and payment policies that offer patients discounts on charges, along with workable payment arrangements. In addition, state law limits hospital billing amounts for almost all New Jerseyans except those with high earnings.

Hospital leaders agree that our healthcare system isn’t perfect and that high healthcare costs are a worry for everyone. We’re hoping that those problems will be addressed by a meaningful healthcare reform bill in Congress that provides insurance to more individuals. But until then, New Jersey’s hospitals will continue to do their part by providing healthcare services to everyone who comes through our doors, regardless of their ability to pay.

Written by Betsy Ryan at 17:41

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