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Does Insurance Status Influence a Patient’s Hospital Charge?

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Abstract

Background

There is obscurity regarding how US hospitals determine patients’ charges. Whether insurance status influences a patient’s hospital charge has not been explored.

Objective

The objective of this study was to determine whether hospitals charge patients differently based on their insurance status.

Methods

This was an analysis of the Florida Hospital Inpatient Data File for fiscal years 2011–2012 (N = 4.7 million). Multivariable regression analysis was used to adjust for patients’ age, sex, length of stay, priority of admission, principal ICD-9-CM diagnosis, and All Payer Refined Diagnosis-Related Group subdivided by Severity of Illness subclass. Hospital fixed effects were included to account for differences in hospitals’ markups.

Results

Compared with those with no insurance, patients with private insurance received hospital bills that were an average of 10.7% higher and patients with Medicare received bills that were an average of 8.9% higher. The impact of Medicaid coverage was imprecisely estimated, but the magnitude of the point-estimate was consistent with 3.5% higher charges to Medicaid patients, relative to the uninsured.

Conclusion

Conditional on patient characteristics, length of stay, and expected intensity of resource utilization, patients with private insurance and patients with Medicare were charged more (before discounting) than their uninsured counterparts within the same hospital.

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Acknowledgements

We thank the Florida Center for Health Information and Policy Analysis for assistance obtaining the data used in this study. The Florida Agency for Health Care Administration disclaims responsibility for any analysis, interpretations, or conclusions created as a result of the data they provided.

Author contribution

Woodworth contributed to the conception and design of the study, and performed all statistical analyses. All authors contributed to the interpretation of the results and assisted in the preparation of the manuscript.

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Authors and Affiliations

  1. Department of Economics, University of South Carolina, Columbia, SC, USA

    Lindsey Woodworth

  2. Division of General Medicine, University of California, Davis, School of Medicine, Sacramento, CA, USA

    Patrick S. Romano

  3. Department of Emergency Medicine, University of California, Davis, School of Medicine, Sacramento, CA, USA

    James F. Holmes

Authors
  1. Lindsey Woodworth
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  2. Patrick S. Romano
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  3. James F. Holmes
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Corresponding author

Correspondence to Lindsey Woodworth.

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Funding

This study was supported by a Grant from the Agency for Healthcare Research and Quality (AHRQ) through the Quality, Safety, and Comparative Effectiveness Research Training (QSCERT) Program (T32HS022236).

Conflict of interest

Woodworth, Romano, and Holmes declare that they have no conflicts of interest.

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Woodworth, L., Romano, P.S. & Holmes, J.F. Does Insurance Status Influence a Patient’s Hospital Charge?. Appl Health Econ Health Policy 15, 353–362 (2017). https://doi.org/10.1007/s40258-017-0308-z

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