The Economix blog at the New York Times has a guest article that discusses hospital procedure pricing and revenue sources. From our experiences in a small dental practice, much of the same discussion on revenue sources applies as well. However, the range is more tightly bound than the orders of magnitude difference described in the practice.
From the article, it seems:
- Medicare (Federal) tries to pay at hospital cost
- Medicaid (State/Federal) on average pays far under hospital cost
- Private insurance generates the bulk of profit
- Uninsured gets screwed
- The range of prices paid by a private insurance vary widely, by orders of magnitude, and there are seemingly few consistent rules that dictate what prices will be
- Pricing is enormously complex and (except in CA) nearly completely opaque