Investigation into emergency rooms shows that for-profit hospitals engage in billions in price-gouging


Originally published at:



This is actually near and dear to my own profession - I develop analytics platforms for hospitals to determine where they’re over- and under-“coding” for inpatient and outpatient procedures.

If anyone’s curious, the industry term for what’s described in the article is “upcoding”, where a higher-compensated code is used instead of a similar-but-lower-compensation one, and used incorrectly. This is fairly common in certain types of outpatient treatment areas, including ERs, and the more egregious offenders are monitored, audited and aggressively fined by insurance payers (to include Medicaid / Medicare).

However, this neglects the “under the radar” offenders, and since the detection is primarily statistical, this leads to a huge problem where the baseline creeps up every year, and actually causes healthcare providers that aren’t upcoding to look on paper like they’re under-coding (accidentally assigning lower-acuity codes than they should) because so much of the industry is overdoing it.


Hospital costs are a gamed system. Hospitals charge hugely inflated prices because insurers only pay a small percentage of the bill. About 3/4 of that inflated price never gets paid - UNLESS you, as a private citizen incur a bill or copay from the hospital. Now, they want the full amount, an amount an insurance company never pays. If your $14.00 dollar aspirin is not covered at all, they want the $14.00.

This is part of the reason so many individuals go bankrupt, or in debt to hospitals for years. This is a scandal that nobody talks about.

NEVER pay a bill from a hospital. Call and negotiate a reduced payment, or demand they wipe the books or you are going to contact a news agency about this tactic the hospital uses only on the uninformed public.


Single payer and universal coverage would of course eliminate this.


Agreed! Along with a lot of other problems with the USA medical system.


That’s part of the problem, for sure, but I’ve noticed an even bigger problem at the “ground level” of hospital billing and coding: almost everyone in hospital finance / revenue cycle is a moron.

Most billing mechanisms are hilariously poorly designed, poorly maintained, and at the highest levels are essentially held together with superglue and duct tape. The system as it exists is almost exclusively due to a sort of “blind watchmaker” mechanism.

I don’t know if anybody here has read Zach & Kelly Weinersmith’s new book (of SMBC fame) Soonish, but there’s a hilarious cartoon in it where there’s an amateur biologist saying something like “Nature is a wondrous tapestry!” contrasted with a professional one saying “It’s a goddamn cobbled-together nightmare of idiocy!”.

If people looking from the outside at the medical billing are the amateur biologist seeing a greater design in the whole mess, then I guess I’m the specialist saying “Nope, it’s a blind idiot with a meat cleaver all the way”.

A system structured like this is, if you think about it, really not ideal for either doing business or for making anyone superlatively rich - it just incurs insane overhead/administrative costs. I could easily design a “malicious” system, designed to extract tons of money for shareholders without delivering any extra value to patients, that’s much more efficient than this. No, the current system is was simply “failed into”, as a sort of ground state of incompetence.


I rarely pay a bill from a HCP right away anyways. It takes months for it to become delinquent enough to go to collections, and in the meantime the numbers of what you actually owe ends up up for debate between the HCP and the insurer. In the interim between the first bill and the one you actually pay, sometimes the number changes or completely goes away–but I’ll tell you something, that number has never gone up for me over time.



… and not even a parking voucher :angry:


When I had my pressure cooker accident last month, I went to the closest emergency room with a whole lot of burns.

They put in an IV, gave me some painkillers, and called an ambulance to transport me to a different hospital. Oh, and a few ice packs.

Cost: $2500.


As long as there are ways to game the system for their benefit, people will try, but it would slow it down and eliminate the ruinous uncovered costs on patients.

Luckily everyone else in the Western world has been working on ways to detect and crack down on it for decades now. Pick a system that seems to work and take it from there.


Sure, if you want death panels in every emergency room and bad ol’ government instead of beneficent CEOs running them. I hear from Libertarians that that’s how it works in the hellscapes known as every other industrialised Western country.


These revelations keep coming, people continue to be not surprised by them, and the political will to fix the system still hasn’t manifested.


A scandal to shame the shameless will surely save us.


I don’t think it’s shameless so much as it is there’s just too much blame to go around for any single actor to get too much of the spotlight. The system became this way with the complicity of basically everyone, from the insurance company executives all the way down to individual doctors and claims processors. Everyone is primarily trying to screw the patients out of money, either by mandate or by their own personal interest.


I’m sorry to hear you were injured. Maybe next time you could wear protective gear when cooking?


This information is brought to you by M.I.S.P.W.O.S.O. The Maximegalon Institute of Slowly and Painfully Working Out the Surprisingly Obvious.


It looks like the ACA backfired.




Thank you. A hearty, sincere, non-sarcastic thank you for that contribution. This is why I love bb.