World’s Most Expensive Babysitter

Another chapter in the saga of hospitals that gouge their patients — this time new parents

by Jennifer Fallon | 26 Feb 2017 at 9:33 PM

If you’re going to deliver a baby any time soon, know that your stay in the hospital may not mean getting extra help or rest.

Alex Cortes and his wife had their daughter, Penelope, at Baptists Memorial Hospital in Oxford, Mississippi. Although Cortes and his wife cared for Penelope for the majority of the time in their room, they did send her to the nursery so that they could get about two hours of sleep.

Since the nurse didn’t mention any additional cost for this — they didn’t anticipate the $1,420 bill that came a few months later.

“I get bugged when we go to a Mexican restaurant and they don’t tell us that extra guacamole is going to cost $2 more,” Cortes told LifeZette. But most nurses aren’t privy to billing information and wouldn’t think to explain the extra charges.

Since the Cortes family has an insurance plan with a $12,600 annual deductible, they ended up paying for the entire nursery cost out-of-pocket. They ended up paying their entire deductible and close to $9,000 in premiums that year — and had to use money they had set aside for a down payment on a house to cover the bill.

Where Is the Money Going?
The average nurse makes about $35 an hour. The rest of this charge could be overhead for keeping the lights on and supplying diapers and blankets — but that’s still $710 an hour per baby to run a nursery.

“It is really a scam and hospitals have gotten away with it for years,” said one patient advocate.

Surprisingly, nursery care and nursery cost is one area of hospital care in which there’s actually very little markup, according to Dr. Karoline Mortensen, professor of health sector management and policy at the University of Miami in Florida. Anesthesiologists, for instance, typically charge 112 times the cost of delivering their services.

“The big-picture academic data suggests that the [nursery] charges are pretty well in line with the cost,” Dr. Mortensen told LifeZette.

However, other factors also drive up those costs. Patients who receive health insurance coverage from smaller companies may not have the negotiating power to drive down charges that big companies such as Blue Cross or Aetna might have, Dr. Mortensen explained. There’s a difference between the facility charges and the physician charges. The facility might be in one's insurance network, but the physician on call during delivery may be out-of-network. All those costs add up.

One doctor even told Alex Cortes he wasn’t technically the patient — the insurance company was the patient, that doctor said.

An Ongoing 'Scam'
“It is really a scam and hospitals have gotten away with it for years,” said Teri Dreher, RN and CEO of NShore Patient Advocates, in Chicago, Illinois. “When I delivered my daughter, they basically took her to the nursery for one to two hours per day, and I got billed $1,400 per day for nursery charges even though I was rooming in with my baby. It’s ridiculous.”

Despite the negative press hospital systems have been receiving for overcharging their patients, prices have continued to rise, mainly due to lack of competition. The hospitals in Northern Mississippi, for example, are spread across a wide geography. If a patient is in need of immediate medical care, you’re not going to take a detour to a hospital with less expensive rates. Since most hospitals in rural areas are the only reputable health care provider within a 20- or 30-mile radius, patients are hard-pressed to explore other options. Lack of competition means health care systems can continue jacking up prices with impunity.

Related: Healthy Babies Don't Need This

How to Protect Yourself
Patients may have more power over some of these costs in the future. A cost transparency movement has been picking up momentum across the country. For-profit hospitals overcharge their patients more often than nonprofit hospitals, which could become an influential factor in where people choose to receive care.

If you receive an egregious bill in the mail, you can always try negotiating with the hospital, said Dr. Mortensen. “They put these bills out there assuming some people are going to pay it and some people aren’t, and some people are going to call up and negotiate,” she said. We don’t think about it often — but we are usually our own best advocates.

Otherwise, ask before you accept or agree to any procedure or service. And aways assume there will be a cost.

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