Does Insurance Status Influence a Patient’s Hospital Charge?

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.