When it comes to medical devices, articles that impact the function or structure of the human body, how much the patient pays depends on who is paying the bill. If the implementation of such a device is considered medically warranted and is covered in part or in full by the patient’s health insurance, it will cost one price. If the implementation of the device is the patient’s choice, for cosmetic reasons and not covered by the patient’s health insurance in such a case, the same item may cost substantially less.
Breast augmentation provides a good example. A woman receiving a breast implant following a mastectomy, with proper health insurance, will have the entire procedure including implant covered by her plan. On her bill, it wouldn’t be unusual to see the breast implant billed at up to $3,500. A young woman with uneven breasts seeking an implant to give herself uniformity will pay on average, according to the American Society of Plastic Surgeons, $3,718 for the implant and the procedure including the surgeon’s fee. That would suggest she paid much less for the implant than the patient in the first example.
Another example of medical device price discrepancy are knee and hip implants. A 2017 JAMA study showed that insurance companies were billed double the amount paid to the manufacturers for the implants by the hospital.
Why the price discrepancy?
Not all hospitals are non-profit and in those cases, it’s a business. But that business can have grave consequences for some.
One study in 2015 by Health Affairs stated “Collectively, this system [of giving hospitals free rein to mark up their costs] has the effect of charging the highest prices to the most vulnerable patients and those with the least market power.”
The vulnerable they reference would be those who don’t have medical insurance or don’t have enough insurance. If they should become ill, they are responsible for paying whatever the hospital wishes to charge, even if it sends them to bankruptcy court when they can’t pay.
The Health Affairs study found many of the hospitals with high-markups to be in the south. Of the top 50 such hospitals, 20 are located in Florida which offers a friendly environment for for-profit hospitals.
For patients without proper insurance, one course of action would be to determine which hospitals local to them are non-profit and which are for-profit. The for-profit hospitals tend to have higher markups. As long as the ACA exists, it requires non-profit hospitals to give discounts to uninsured patients that meet eligibility requirements.