An analysis of hospital expenses in Ohio indicates that the Bureau of Workers’ Compensation paid $1.6 billion for services that cost the hospitals less than $1.1 billion to provide. The mark-up, some $544 million, has been described by various stakeholders as “a positive profit margin”, “outrageous”, “ludicrous”, and “a cash cow for hospitals”.
The basic issue is hospitals are paid a set percentage of charges, a methodology that some suggest is open to misuse, as the hospitals set the charges. Ohio’s hospitals are paid 70% for inpatient and 60% for outpatient services. Scott Courtney, EVP of the Service Employees Union that conducted the study, claimed that “Hospitals arbitrarily set a price that’s not at all relevant to the cost of providing care.”
Both the BWC and the Ohio Hospital Association are disputing the SEIU’s conclusion that hospitals are generating a profit of some 65% on workers compensation, with the Association claiming the figure is in the 15 to 35 percent range.
My own experience examining hospital data, coupled with the experience of MedNet Connect (a consulting client), a firm that works with payers to evaluate bills to assess their
Jul
22
