I don’t consider myself a hospital advocate, a patient advocate, or even a health care advocate. Sure, I take those roles on from time to time, but what I really consider myself is an information advocate, trying to remain fair and balanced while giving out information that’s true, no matter which way it goes.

There are lots of stories on TV and in newspapers and magazines that paint this picture of evil hospitals and their billing practices. I’m here to tell you that most of the time it has nothing to do with billing, so get that one out of your mind. And these practices that are considered evil are nothing of the sort; most of the time anyway. They follow some standard business practices, and I say some because, unfortunately, health care is a much different animal than other businesses.

Here are 5 things you should know about hospital charges; they’re relatively short explanations, and if you want to know more you can check out the article I wrote that went further with it here.

1. Billing departments aren’t responsible for hospital charges. There isn’t a single billing department in the world responsible for charges. People in billing see very few bills these days, as everything is electronic.

2. Hospital departments are responsible for hospital charges. This is true, but only for the charges themselves. Almost no hospital department directors actually put the dollar amounts on a service, though some do get to recommend a figure.

3. Hospital charges aren’t all over-excessive. Like every other business, hospitals mark up their charges. Unlike other businesses, hospitals almost never get paid what they charge for. Marking some services up 300% or so aren’t evil at all; even marking something up 1,000% isn’t evil, though it depends on what’s being marked up. It depends on what’s being marked up and when that creates issues.

4. Hospitals don’t intentionally charge people for services and supplies they didn’t receive. At least 99.99% of all hospitals are doing the best they can. Sometimes they don’t get it right, which is what allows people like me to have a consulting career. If you saw some of the processes for capturing charges you’d understand why sometimes it’s difficult for people who aren’t adept at financial processes to get it right.

5. Hospital charges have nothing to do with hospital profitability. Once again, this is where things differ between hospitals and other businesses. Since hospitals don’t really get paid by almost anyone for what they actually charge for services, hospitals rely more on activity numbers than anything else. A profitable hospital will reach its inpatient and surgery numbers each year; the charge amounts just help to quantify it in some manner.

There you go. How many other truths are out there? Stay tuned.

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