Why Common Ailments Now Carry High Hospital Price Tags

Why Common Ailments Now Carry High Hospital Price Tags

We all know that medical bills can turn into a significant expense.

But you might have assumed that a budget-busting health cost would be limited to a major medical scare or a surprise visit to the emergency room.


Get started with a free financial assessment.

In fact, even relatively common ailments can now result in enormous hospital charges, the New York Times reports. According to new Medicare data released this week and analyzed by the Times, prices for run-of-the-mill inpatient conditions (like pneumonia or a digestive problem) have sharply increased across the country in recent years—in some cases, at more than four times the rate of inflation. The data, which compared rates at more than 3,000 U.S. hospitals between 2011 and 2012, revealed just how dramatically health care costs can diverge from year to year.

For example, average hospital charges in the U.S. for a patient experiencing chest pain rose 10% between 2011 and 2012, to an average of $18,505. (The nation's inflation rate that year was just 2% in that period.)

While Medicare, or those who hold commercial insurance, will in large part negotiate hospital charges down significantly, these hospital list prices are particularly relevant to those with high-deductible plans, or those without insurance entirely.

So what's behind this major surge in hospital charges? It could be medical centers compensating for the rising costs of drugs and technology, experts say, as well as a decline in the number of patients being admitted to hospitals. Others argue that the ongoing upgrades by hospitals to digital health records are also leading to price hikes.

Still, these scenarios don't completely explain such a rapid escalation of costs. “It just isn’t clear what has gone into the increase in hospital charges for the past decade,” Dr. Hamilton Moses III, chairman of the consulting firm Alerion Advisors and an adjunct professor of neurology at Johns Hopkins University, told the New York Times.

Worried how rising prices could impact you? Start by building up savings of at least six months of net income—after all, major medical costs are one of the seven reasons you need an emergency fund.


Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!