And what we learned from the article is that hospitals have what is called “the charge master,” which is the hospital’s price list for all its services. And according to Brill, “charge master assigns prices to everything ... It would seem to be an important document.” Yet, when Mr. Brill asked about it, hospital officials seemed to not want to discuss it, even arguing that it was irrelevant.
He concluded: “I soon found that they have good reason to hope that outsiders pay no attention to the charge master or the process that produces it. For there seems to be no process, no rationale, behind the core document that is the basis for hundreds of billions of dollars in health care bills.”
And from what we read, this does seem to be true. Evidently most of the charges on such a list far exceed the actual costs incurred by the hospitals. We understand Medicare, of course, pays but a fraction of what is billed. And other insurance companies also see a reduction, although not as steep as Medicare’s, in what they pay versus what is billed. In fact, the only people who are expected to pay the seemingly outrageous charges as determined by the charge master, are those people without insurance who are not eligible for any sort of assistance with their medical bills. As Brill says: “If you are confused by the notion that those least able to pay are the ones singled out to pay the highest rates, welcome to the American medical marketplace.”
We, of course, having just journeyed through the health care system, were fascinated by the article. It also helped us understand, when we got an accounting of benefits from our Medicare supplemental insurance, why it appeared to us that we were billed for our room and board on Dec. 27 the seemingly amazing amount of $3,020.