There's an article on a blog called Kevin, M.D., talking about hospital charges and the uninsured. The writer got it right; hospital charge masters are NOT the cause of bills that self insured patients receive, and hospitals end up writing off much of what they're charged for, both for insurance companies and for self insured patients through many charity care means.

A hospital charge master is a listing of all the services a hospital provides. The reason for a charge master is to make the process of charge capture and general ledger reconciliation easier. Charges have prices on them as well as a number of codes for both billing and reconciliation purposes. In other words, a charge master is a paper tool; nothing more, nothing less.

After a major judgment against a hospital system in Wisconsin in 2005, some hospitals across the country started coming up with ways to give self pay patients a chance to "compete" with some insurance companies when it came to what they were going to be billed. Some hospitals set up allowances that are writing off upwards of 50% in some cases for self pay patients, which may be consistent with reimbursement levels of some insurance payers for those hospitals, depending on which area of the country care is being given. And then, on top of that, patients always have the right to apply for charity care if they still can't pay for those services.

Still, it is probably true that it's harder for those without insurance, who don't qualify for charity care because of their income level, to cover some costs related to their treatment. If someone from a family of 4, which earns around $35,000 a year, has to have surgery in a hospital that comes to $25,000 or more, even being on a payment plan, could cause a lot of pressure to be put upon them. Unfortunately, I don't have any easy answers for those folks.