Why do hospitals care about health care costs?

People always talk about how such and such procedure is expensive and the equipment is expensive.
Im curious why hospitals care about expenses when its the patient and their insurance who have to worry about their expenses?
Also, if a patient leaves AMA, why do hospitals care? The patient still has to pay for their services with or w/o insurance if they decide to leave AMA.
Quote from chiuliPeople always talk about how such and such procedure is expensive and the equipment is expensive. Im curious why hospitals care about expenses when its the patient and their insurance who have to worry about their expenses? Also, if a patient leaves AMA, why do hospitals care? The patient still has to pay for their services with or w/o insurance if they decide to leave AMA.

Quote from chiuliPeople always talk about how such and such procedure is expensive and the equipment is expensive. Im curious why hospitals care about expenses when its the patient and their insurance who have to worry about their expenses? Also, if a patient leaves AMA, why do hospitals care? The patient still has to pay for their services with or w/o insurance if they decide to leave AMA.

You're right, it's patients and insurance companies, except they don't worry, they just don't pay.

Quote from systolyYou're right, it's patients and insurance companies, except they don't worry, they just don't pay.

A hospital is a business, and just like any business they expect to profit greatly. Hospitals receive payment from some entity other than the patient directly in most cases. Insurance, medicaid/care are the majory pocket book players. Hospitals know how much they will be paid for any given diagnosis - pretty much. The insurance companies determine how much a hospital will be paid for every service. The hospital, in order to make a profit is acutely aware of how much money they can make off treating you. In fact, they know almost exactly when your insurance company will begin to stop paying for your care. Any care beyond that point will be money that the hospital must find another source of payment for. They know it is very unlikely that you will have 10s of thousands of ready cash to pay, so this usually is when you are offered only certain modes of treatment, or told frankly that your insurance will not cover a treatment, or will be discharged (as long as you are stable). Now it's not that simple, there are very intricate algorithms involved and that is why hospitals have a large base of case managers to be sure that they know what you are capable of paying for - what your insurance plan will cover. The hospital knows that due to EMTALA they must stabilize you. But if it is at all possible, they will attempt to find that golden time when you reach a stable zone and getcha out to a SNF, LTC, etc before you have a complication while inpatient that increases your stay. This helps them limit their financial loss.

Insurance only pays pennies on the dollar for most things. A procedure that costs $15 will only get maybe $5. Do you ever check your EOB's?Hospitals are there to do one thing- make money. Like any business. Not give services away for free.Don't worry, it's a common misperception that hospitals don't need to make money. Like to pay for things. Money doesn't grow on trees, you know. And since insurance companies only pay a small percentage of the actual cost (and the patient often can't), they need to make sure they don't lose money. Because then they would go bankrupt.

People that don't have insurance in many cases just do not pay.There are also people that have insurance that don't pay their co pays, cost shares, etc.Either they can't afford it, or they can and just refuse to pay it.

Why not? Why wouldn't hospitals care?

there is a huge difference between what is charged and what is received. We get about 29 cents for every dollar we charge. From that we have to pay a lot of folks and keep up the facility, etc. The real question in my mind is why do people think they deserve something for nothing?AMA - hospitals are concerned that patients make bad decisions then blame the hospital when things don't work out right. People refuse care then sue because the result was not good due to their own bad decision.

unfortunately, in this system, there are costs that need to be taken into consideration. Like any business, it costs money to run a hospital 24x7,365 days a year, huge energy costs, staffing salaries in addition expensive procedures. What if the patient does NOT have insurance? what if their insurance does/will NOT cover the bill?

Quote from MrWarmHeartedunfortunately, in this system, there are costs that need to be taken into consideration. Like any business, it costs money to run a hospital 24x7,365 days a year, huge energy costs, staffing salaries in addition expensive procedures. What if the patient does NOT have insurance? what if their insurance does/will NOT cover the bill?

The health care system in the US is a perversion of the normal consumer models of capitalist societies. Using insurance to pay for care is possibly the most inefficient way to pay for anything. Were you aware for example that there is one health insurance employee for every doctor in the US (about 1 million physicians and about 470,000 health insurance employees)? There is also huge disparity in the prices charged for procedures (note that I'm using price, not cost) and compounding that, there is very little transparency in the pricing. The price charged for a simple colonoscopy for example ranges from something like $900 to over $3,000. And to the second point, just try calling a clinic to get a price for a colonoscopy (or really any procedure - Lasik surgery excepted). You can't get one because it's not in the best interest of the clinic or hospital to compete on price. There is also the "Field of Dreams" phenomenon. The US has something like 6 times as many CT scanners as does another very similar country like Germany (and 4 times as many MRI machines). So guess which country leads the world in per-capita CT and MRI procedures (hint: It's not Germany - though they are far ahead of us by most measures). And of course there's the drug advertising - I could go on.The point is that system for delivering and paying for health care has become a model of perverted inefficiency. This should be evident to everyone from just a few data points. We spend much more than any other country on health care: In 2007, just over $6,700 per person vs about $5,200 for Luxemburg (the next closest and by far the highest anywhere but the US). By comparison, Norway and Switzerland spend about $4,000, Germany and France just over $3,000. Most first-world countries spend from $2,000 to $4,000 per person. Despite the much greater spending, most outcomes (not just longevity and infant mortality) in the US are not only not better than most other countries (including some 2nd and 3rd world countries) they are worse.I urge everyone to read David Goldhill's excellent article from the Sept 2009 issue of The Atlantic, "How American Healthcare Killed My Father". Despite the title, the article is really a interesting and excellent survey of the health care system in the US and more importantly, contains some very insightful suggestions on how to change the system for the better (note to both conservatives and single-payer advocates - you will be disappointed that the suggestions don't support either of your positions).Link to the article:http://www.theatlantic.com/magazine/...y-father/7617/