Marking up health care

The gap between what it costs hospitals to provide services and what they charge for them has widened significantly over the past two decades, a recent study finds.

Researchers at the Jayne Koskinas Ted Giovanis Foundation for Health and Policy found that, nationwide, hospital charges are currently increasing at about twice the rate of costs, according to Fierce Health Finance. Overall, margins rose from 72 percent in 1991 to 343 percent in 2011. On average, large urban medical centers marked up service charges by 262 percent in 2011, the study noted. Furthermore, the report said that hospitals in six states—including California—marked up some charges by 1,000 percent or more.

The study linked the widening gap between costs and charges to tightening reimbursement rates from government and commercial payers.