A few years back a Johns Hopkins University study on emergency room prices found they were outrageous. I mean, who knew that hospital emergency departments overcharge? The study looked at 12,000 billing records for emergency medicine doctors nationwide. Researchers found patients were charged 340 percent more, on average, than what Medicare pays for the same service. Charges ranged from 1 to nearly 13 times what Medicare’s fee schedule. The study authors found:
“…massive disparities in service costs across emergency rooms, and that price gouging is the worst for the most vulnerable populations.”
“This study adds to the growing pile of evidence that to address the huge disparities in health care, health-care pricing needs to be fairer and more transparent.”
The hospitals with the highest fees were for-profit hospitals in the southeast and Midwest.
I recall driving by my old hospital employer a few years ago and noticing that they were substantially enlarging their emergency department. They were increasing it by a multiple of its original size. At the time I wondered why a hospital would enlarge the biggest money-losing department in the hospital? What I didn’t know at the time was that ERs became price-gouging profit centers at some point after I ceased to be a hospital accountant and when Obamacare was passed.
In the United States, an emergency room visit costs $2,200 on average, according to the most prominent insurance carrier in the U.S., UnitedHealthcare. Sometimes, a visit to the emergency room can exceed these prices since the actual price you pay out of pocket will depend on your condition and the diagnostic tests and treatments you undergo.
The price of your ER visit will depend on what types of treatments and medications you receive. For patients without health insurance, an emergency room visit can cost less than $2200. If your treatment is extensive, an ER visit can exceed this price. For instance, in some cases, especially where critical care is required and/or a procedure or surgery is performed, the cost could reach $20,000 or more.
Just as the earlier Johns Hopkin’s study, prices vary by region. A service that costs $623 in Maryland could be $3,102 in Florida. These are averages and assume people in Maryland go to the ER for the same conditions as people in Florida. That is not a safe assumption, but prices are undoubtedly higher in Florida. Mira has a great graphic on the 25-most common reasons for an ER visit and the percentage of them that are avoidable.
Physicians who treat you in the ER are paid separately from the hospital. Emergency physicians most commonly work for an ER staffing firm. One positive development is that the physicians who treat you in the ER are no longer allowed to (balance) bill you fees far above what your health plan pays. The No Surprises Act (NSA) was signed into law by then President Trump in late December 2020. The NSA made surprise medical bills from out-of-network providers (mostly) a thing of the past. Prior to the NSA, some private equity firms figured out a way to use physician practices to ambush patients, who could not decline their higher-priced, out-of-network services. Indeed, a recent headline from MedPage Today said:
“No Surprises Act ruined ‘secret sauce’ of Envision, expert says.”
Secret sauce is the term for a business practice that is key to a firm’s success. Envision’s secret sauce was the ability to decline network affiliation and balance bill patients who used the emergency room at fees far higher than what their health plan would reimburse. Envision entered bankruptcy in 2023 to restructure its debts. At the time it said the NSA reduced its profitability. The NSA ultimately reduced the earnings of 30 public companies that used surprise medical bills as a means to enhance revenue, according to the Wall Street Journal. Now if only we could do something about being ambushed by hospitals in the emergency room.