Undercurrent

Sunrise charges nearly 13x markup, one of highest among top hospitals, study shows

By: - June 16, 2021 12:43 pm
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(Bryan Steffy/Getty Images)

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Sunrise Hospital & Medical Center in Las Vegas (Bryan Steffy/Getty Images)

[Editor’s Note: This article has been updated to provide a statement from Sunrise Hospital.]

Las Vegas is home to the hospital with one of the highest bill markup rates, according to new research which studied the 100 largest hospitals, by revenue, in the nation.

Sunrise Hospital & Medical Center’s listed prices for procedures and other billable items are 12.9 times more than the cost of providing care, according to data from Johns Hopkins University released Monday in partnership with Axios.  

Sunrise is ranked second among the 100 largest hospitals for highest markup rates, below just one private hospital in Virginia.

Hospitals say that high listed prices are irrelevant — merely a tool used to negotiate prices with insurers, and a number that most patients will never see. Hospital administrators set prices each year, so rates vary widely from hospital to hospital, and research suggests higher rates are not always associated with higher quality.

In a statement to the Current, Sunrise Hospital CEO Todd P. Sklamberg also noted that the amount patients pay has more to do with the type of insurance coverage they have and said that “government programs such as Medicare and Medicaid determine how much they reimburse hospitals and insurance plans negotiate rates.”

But a 2017 study found that list prices influence what patients and insurers end up paying. List prices especially affect those who are uninsured or out-of-network, forcing them to pay the retail price. High list prices help hospitals generate revenue, the study noted.

“This system has the effect of charging the highest prices to the most vulnerable patients and those with the least market power,” a 2015 study concluded.

Sklamberg said at Sunrise uninsured patients are eligible for free care through its charity care program or can “receive our uninsured discounts, which are similar to the discounts a private insurance plan receives.” Information on those programs can be found here.

Sunrise is a for-profit hospital owned by HCA Healthcare, one of the nation’s largest health care facilities operators. Sunrise was in the news in April for improperly billing Medicare over $23.6 million. Its parent company, HCA, which made $3.7 billion in profit last year, gained notoriety for defrauding Medicare in the ’90s — then the largest case of healthcare fraud in U.S. history.

The Johns Hopkins findings noted that private, for-profit hospitals, on average, make money through markups, while government and nonprofit hospitals more frequently go to court to collect patients’ medical debt. Sunrise didn’t take any court actions against patients in the time period studied, early 2018 to mid 2020.

Though it was the only Nevada hospital included in the Hopkins study, Sunrise is one of many for-profit hospitals in the state. Nevada has the highest percentage of for-profit hospitals in the U.S., with over half of the state’s hospitals for-profit. The national average is less than one quarter. Private hospitals are privately funded and report to shareholders, while public hospitals are government-funded. Private hospitals can turn away patients, which is also a cost-saving measure, while public hospitals are required to treat anyone who walks in the door.

Among the study’s other findings: Sunrise has a better rating for spending money on charity and community health than most of the largest hospitals.

Sunrise was in the bottom half of hospital safety, though, receiving a C grade. Safety was measured by factors like infection rate and problems with surgery. The lowest grade any of the hospitals received was a D. Sunrise received a positive predatory billing grade, which measures the hospital’s lawsuits against patients with unpaid bills.

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