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Tennessee 5th in Nation in High Hospital Charges

Press Release, 1/14/14

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 Nurses Warn of Ongoing Harm for Patients Needing Care
 
New data released by the nation’s largest nurses’ organization reveals that Tennessee hospitals are among the most costly in the nation, helping fuel a growing scandal of high hospital charges and costs.  
 
Tennessee ranks fifth nationally in how high it sets its charges over its costs, with a statewide average charge of 430 percent as a percent of total costs. In other words, the average Tennessee hospital charges $430 for every $100 of its total costs. That’s well above the national average of 331 percent.
 
Top 10 Most Expensive Hospitals – Tennessee (by total charges as a percent of total costs)

  1. Lakeway Regional Hospital, Morristown – 925%
  2. Regional Hospital of Jackson, Jackson – 887%
  3. Dyersburg Regional Medical Center, Dyersburg – 864%
  4. McNairy Regional Hospital, Selmer – 810%
  5. Skyridge Medical Center, Cleveland – 795%
  6. Henderson County Hospital, Lexington – 759%
  7. McKenzie Regional Hospital, McKenzie – 749%
  8. St. Francis Bartlett Medical Center – 718%
  9. Volunteer Community Hospital, Martin – 712%
  10. Hendersonville Medical Center, Hendersonville – 699%

 
Notably, the seven hospitals in the state that set the highest charges are all operated by the giant for-profit chain Community Health Systems, Inc., currently seeking to complete a merger with Health Management Associates that would make it the largest hospital chain in the U.S. with even more clout to set inflated prices.
 
The new findings are based on publicly available Medicare Cost Reports as of June 2013, covering the fiscal year 2011-2012, analyzed by the Institute for Health and Socio-Economic Research, the research arm of National Nurses United. For the charge to cost ratio for other Tennessee hospitals, call 510-273-2246.
 
IHSP/NNU also released the top 100 most expensive U.S. hospitals, top 10 for each state, and statewide averages.
 

  • The 100 most expensive U.S. hospitals have a charge to cost ratio of 765 percent and higher – more than double the national average of 331 percent.
  • Despite enactment of the Affordable Care Act, hospital charges recorded their single biggest jump, a 22 percentile point increase from fiscal year 2010-2011 to fiscal year 2011-2012 in the past 16 years for which the IHSP has analyzed the data.
  • There is a strong correlation between high charges and profits. The 10 percent of hospitals with the highest charges over their costs have the largest average profits.
  • For-profit hospitals continue to dominate the list of those with the highest charges. For-profit corporations average charges of 503 percent of their costs, or $503 for every $100 of total costs.
  • By contrast, publicly-run hospitals, including federal, state, county, city, or district operated hospitals, with public budgets and boards that meet in public, exercise far more restraint than for-profit or non-profit corporate chains.  Average charge ratios for government-run hospitals are just 235 percent of their costs.
  • Public oversight, or regulation seems to help constrain excessive pricing. Maryland, probably the most regulated state in the U.S. has the lowest average charges of all the states among its 10 most expensive hospitals.

While Medicare sets reimbursement rates, insurance companies typically negotiate with hospitals on reimbursements. But the higher the charges, says NNU, the greater the ultimate reimbursement that insurers pay. Predictably, insurers will pass those increased costs to ratepayers, with resulting higher premiums, co-pays, deductibles, and other fees for patients and families.
 
Uninsured individuals with far less bargaining power are too often hit with the full list price. Hospitals increasingly tack on steep co-pays, require cash up front before administering care, or hound patients for payment afterwards.   
 
Globally, a Commonwealth Fund study of 11 developed nations released in November found that U.S. adults are the most likely to forego treatment due to cost, struggle to pay bills, and spend the most out of pocket on medical care. In 2013, it found, 37 percent of U.S. adults failed to see a doctor, didn’t seek recommended treatment or did not fill a prescription because of the high cost – compared to just 4 percent of those in Great Britain.
 
NNU Co-President Jean Ross, RN noted criticized those hospitals with high charges for “price gouging that puts far too many patients and families at risk of financial ruin, cutting back on other basics, such as food or shelter, or not getting the medical care they need.” She noted that the numbers for bankruptcy and financial run from medical bills plummet at age 65 when people qualify for Medicare. “The best solution is to expand and update Medicare to cover everyone, and take the financing of healthcare out of the hands of the profiteers,” said Ross.

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