Hospital's Computer System Always Marks Up Costs Automatically, Leaked Records Show

'Ridiculous, seemingly arbitrary price markups are a defining characteristic of the $4-trillion U.S. healthcare system — and a key reason Americans pay more for treatment than anyone else in the world,' writes a business columnist for the Los Angeles Times.

'But to see price hikes of as much as 675% being imposed in real time, automatically, by a hospital's computer system still takes your breath away.'

Long-time Slashdot reader fahrbot-bot quotes their report:

I got to view this for myself after a former operating-room nurse at Scripps Memorial Hospital in Encinitas shared with me screenshots of the facility's electronic health record system.... What they show are price hikes ranging from 575% to 675% being automatically generated by the hospital's software. The eye-popping increases are so routine, apparently, the software even displays the formula it uses to convert reasonable medical costs to billed amounts that are much, much higher. For example, one screenshot is for sutures — that is, medical thread, a.k.a. stitches. Scripps' system put the basic 'cost per unit' at $19.30. But the system said the 'computed charge per unit' was $149.58. This is how much the patient and his or her insurer would be billed.

The system helpfully included a formula for reaching this amount: '$149.58 = $19.30 + ($19.30 x 675%).'

You read that right. Scripps' automated system took the actual cost of sutures, imposed an apparently preset 675% markup and produced a billed amount that was orders of magnitude higher than the true price. This is separate from any additional charges for the doctor, anesthesiologist, X-rays or hospital facilities.

Call it institutionalized price gouging. And it's apparently widespread because the same or similar software is used by other hospitals nationwide, including UCLA, and around the world... Healthcare providers routinely ignore the actual cost of treatment when calculating bills and instead cook up nonsensical figures to push reimbursement from insurers higher. For the millions of people without health insurance, those sky-high prices are what they're stuck with (although most hospitals, including Scripps, typically will offer discounts in such circumstances).

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