This month’s article will deal with the economics of our hospital system, especially as related to charges made to uninsured patients. This has been partly reviewed in previous articles.
As a reminder, hospital care absorbs almost exactly 25% of the yearly medical budget (Inst. for Health Metrics and Evaluation, “Most Comprehensive Study on US Healthcare Spending by County Reveals Wide Variation”, February 14, 2025).
In fairness, it should be acknowledged that hospitals, like any business, need to charge enough for its services to allow continued operation. We know that hospitals have enormous overhead to pay for workers’ salaries (many of whom are highly trained and quite expensive), costly instruments, inpatient wards and specialty units (e.g., Intensive Care Units, Operating Rooms…), its own malpractice insurance, and many, many other things. Hospitals also need to invest capital constantly in new technologies to keep up with the pace of medicine. No patient wants care in a dirty, understaffed, or antiquated hospital. All reasonable people expect that as a given.
However, hospitals are unique entities as they treat you first and then tell you how much you owe them later. Especially in “for-profit” hospitals, these relative giants often, in truth, gouge patients after discharge with very little that the patient can do about it (although there have been some improvements in this aspect in the last few years).
As a concrete case in point, allow me to borrow hospital billing figures from blood tests collected from a recent hospitalized patient in my current home state, North Carolina in May 2026. One should note that Medicare fees are fairly good at estimating actual lab costs. Laboratory work is useful for comparison because (for example) a complete blood count (CBC) assay is exactly the same thing in one hospital as another. Thus, prices can be compared on an “apples to apples” basis.
Test Billed cost in local hospital Actual cost as per Medicare
Comprehensive Metabolic Profile $510 $15
Complete Blood Count with differential $283 $10
Urinalysis with Microscopy $85 $5
Culture of Urine $249 $10
Lactate , serum $202 $12
Lipase, serum $293 $10
In the above, Medicare costs are rounded either to the mean or slightly upward. Even with a quick review of the 2 columns, one can note of a tenfold or greater ratio of billed prices to hospital costs which most of us would consider “gouging”.
Of note, there have been recent small efforts to address situations such as the above. One such example is the “No Surprises Act” of 2020 which offers some protections to the insured and uninsured. Even before that, the “Affordable Care Act” of 2010 helped, to some extent, reduce the excessive hospital bills given to patients if primarily by allowing patients to purchase solo policies as individuals when otherwise unavailable. Some states are addressing excessive charges in addition to the federal government. However, as one who has seen the incredible amount of creativity and energy hospitals used to justify costs to patients, I hold very modest hope that federal and state laws alone can significantly slow down the ever escalating cost of medical care, especially from hospitals.
So, I offer 2 paths for meaningful reduction of hospital prices.
The first path would be to implement a full restructuring of the American Health System as well described in multiple previous articles (indeed, this is the primary goal of this magazine). The needed restructuring would include the following-A primary care physician for citizen of the United States with interval visits (annual physicals, acute care management, chronic disease management, etc.), a single-payer system (since, paradoxically, multiple carriers in a market paradoxically worsen the cost of services), universal healthcare for all citizens which will emphasize preventative services and early interventions for acute problems “upstream”, global capitation which would force physicians and other caregivers to focus on best medical practices and penalize low or no value medical services (and since everybody would have insurance, there would be no tenfold markups to the uninsured), financial incentives to patients who take good care of themselves, and a single medical record for all patients obviating the need multiple copies of patient records spread all over hospitals and physician offices. If implemented, strong evidence suggests that these changes would be the most optimal way to reduce the cost of hospital care (and, indeed, the full palette of medical care).
The second (possibly temporizing) path is to ask each hospital in the United States to declare their cost of treatment for the top 50 (arbitrary) hospital admissions using an “apples to apples” comparison of costs. An independent organization would generate an “average” treatment protocol for each diagnosis, e.g. community acquired pneumonia (CAP), and then enumerate a detailed treatment plan for that hospital to care for the “patient”. So, in the case of CAP, the hospital would be asked to supply the costs for blood cultures×2, 4 morning CBC’s, 4 days of oxygen by nasal cannula at 2L/minute, 4 days of ceftriaxone 1g IV q.d. + azithromycin 250 mg p.o. q.d., 4 days in a “floor” bed, 4 days of nursing services, etc. Clearly, all CAP’s do not have the same profiles with regard to length of stay or severity. However, an independent organization would supply the same profile to every hospital of an average CAP treatment plan which the hospital would itemize and then sum. Ultimately, using a supplied treatment plan for each of the 50 most common admissions, hospitals could be compared by estimated costs. Then, patients, larger companies which purchase employee insurance plans, and the insurance companies themselves could compare hospitals by cost and make better decisions. As noted above, there is some glacial movement toward this type of a reckoning with the hospitals already under federal law and some state laws but the above would be far more detailed and therefore much more useful.
In the recent Forbes article “Increasing Burdens of Medical Debt and Bankruptcy Are Uniquely American” by Joshua P. Cohen (April 5, 2026), it is noted that 100,000’s of Americans file for bankruptcy related to medical debt. Specifically, it is stated that “… estimates suggest that inability to afford costs of medical care contributes to at least 530,000 personal bankruptcy filings annually. Approximately two-thirds of personal bankruptcies in the U.S. are associated with medical expenses or illness-related loss of work.” By charging the uninsured patient tenfold or more above the cost, hospitals impose devastating social costs quite often on the most financially vulnerable part of the population. The bankruptcy aspect may be developed at a future point but the key fact is the underinsured and uninsured are more likely to be financially destitute and unable to pay for these predatory costs of hospital services.
The second method offered above might be a temporizing measure until the first can be implemented as it should not be too great a burden on hospitals. However, the first method is the goal of this publication. The time to address this problem is now.