Hospital Price-Gouging Widespread

[Scuba]

30. Certainly employees, which sometimes include physicians, get paid, but there are no owners that do.

Not-for-profit means that there are no stockholders being paid dividends when revenues exceed expenses (which includes the salaries of nurses, lab techs and others). Retained earnings are used to replace aging equipment, build new facilities, provide new services, etc., not to compensate investors.

It's important to distinguish between not-for-profit hospitals and other healthcare related business, such as medical practices (physician groups). There are for-profit hospitals in this country. Often these are specialty hospitals owned by doctors that cherry pick the easiest cases (think open heart surgery) to maximize profits while leaving the more difficult (and unprofitable) cases for the non-profits to handle.

What you're seeing in weird hospital pricing is not gouging for profits, it's "cost shifting" to remain viable. If Medicare/Medicaid/Commercial insurance is reimbursing a hospital less than cost for a particular Diagnosis Related Group (DRG) then they have to make it up somewhere or go out of business. Under the DRG system hospitals are paid a flat rate for based on the patient diagnosis, regardless of cost. This system was adopted by Medicare in 1984 and insurance companies shortly followed suit.

Ergo, jacking up hospital prices does not even result in more revenue!!!