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Health care costs up to 300% higher for privately insured patients than those with Medicare, report reveals

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Health care costs up to 300% higher for privately insured patients than those with Medicare, report reveals

Most Americans — more than 65% — have private health insurance, but a new report has revealed a potentially very expensive drawback.

Patients who have private (commercial) coverage may end up paying significantly more for their medical care compared to those who have public health insurance, such as Medicare, according to recent data from RAND Corp. in Washington, D.C.

As of 2022, employers and private insurance companies paid an average of 254% more for medical services than what Medicare programs would have paid.

HEALTH CARE COSTS UP TO 300% HIGHER FOR PRIVATELY INSURED PATIENTS THAN THOSE WITH MEDICARE

Several states — California, Florida, Georgia, New York, South Carolina, West Virginia, and Wisconsin — had medical costs that were more than 300% higher than Medicare prices, the report stated.

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The researchers analyzed medical claims data from a “large population” of privately insured patients who were treated at over 4,000 hospitals across the country between 2020 and 2022.

Patients who have private coverage may end up paying significantly more for their medical care compared to those who have public health insurance, such as Medicare. (iStock)

The report also included the names and prices of each hospital.

“Calculating 4,000-plus U.S. hospitals’ overall relative prices has never been done before this study, because it’s so difficult to collect the requisite data and to get permissions to publish the hospital and health system names associated with each relative price,” said Brian Briscombe, a health care analyst at RAND and one of the study authors, to Fox News Digital.

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“This is real price transparency — naming the hospitals and presenting their overall relative prices in a way that anyone could understand.”

The report gives employers a tool they can use to become “better-informed purchasers” of health care services, Peter Hussey, director of RAND Health Care in Santa Monica, California, noted in a news release. 

“Hospitals account for the largest share of health care spending in the U.S., so this report also provides valuable information that may aid policymakers interested in curbing health care costs,” Hussey also said in the release.

medical cost concept

The researchers analyzed medical claims data from a “large population” of privately insured patients who were treated at more than 4,000 hospitals across the country between 2020 and 2022. (iStock)

The wide variance of prices across hospitals is the most important takeaway, according to Briscombe.

“Within a single city, you can find a hospital that (on average across all its services) charges privately insured patients about twice as much as Medicare charges for those same services — but down the street, another hospital charges three times what Medicare charges,” he told Fox News Digital. 

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The difference in prices cannot be explained by differences in quality, he added.

“This is real price transparency — naming the hospitals and presenting their overall relative prices in a way that anyone could understand.”

Dr. Brett Osborn, a Florida neurologist and longevity expert, was not involved in the RAND study but said the findings are “concerning.”

“Hospitals bill private insurers multiples of the Medicare allowable,” he told Fox News Digital.

“The elevated costs are passed onto patients, resulting in higher premiums and out-of-pocket expenses.”

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Medicare

As of 2022, employers and private insurance companies paid an average of 254% more for medical services than what Medicare programs would have paid, according to a new study.  (iStock)

And these costs are on the rise, Osborn warned. 

“People accept job offers because the employer offers health insurance — otherwise, for many, the premiums would be unaffordable,” he added.

Osborn emphasized the significant price variations among states.

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“Hospitals in some states charge less than 200% of Medicare rates, while others exceed 300%,” he said.  

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“Due to its size, Medicare can negotiate lower payments — but private insurers lack this leverage.”

“This discrepancy is due to some hospitals’ market power, making it hard for employers to avoid them. Due to its size, Medicare can negotiate lower payments — but private insurers lack this leverage.”

The doctor also called for greater price transparency from hospitals.

Emergency room waiting

The new report published the names and pricing models of more than 4,000 U.S. hospitals. (iStock)

“Despite a federal rule for price transparency, only 24.5% of hospitals comply — highlighting the need for informed health care purchasing and policy changes to manage costs,” he said. 

“The system is fundamentally flawed, designed to profit from illness rather than promote health,” Osborn continued. 

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“It clearly favors hospital systems, not the patients, reinforcing the harsh reality: There is money in the sick.”

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Dr. Marc Siegel, clinical professor of medicine at NYU Langone Medical Center and a Fox News medical contributor, said the issue of price variations is complex.

“Sometimes these are hidden costs, and sometimes hospitals and other health organizations know they can get away with charging private insurers more while obscuring prices from both the insurer and the patient to help compensate for the shrinking reimbursements from public insurances,” Siegel told Fox News Digital. 

“At the same time, more out-of-pocket costs are transferred to the consumer in terms of copays and deductibles, as middlemen take the profits.”

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“The system is fundamentally flawed, designed to profit from illness rather than promote health.”

With the lack of price transparency, there is no way to introduce competition, Siegel said, as the true costs and prices are hidden. 

The study did have some limitations, the researchers acknowledged. 

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“We didn’t have sufficient claims data to publish all U.S. hospitals’ relative prices,” Briscombe told Fox News Digital. 

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“Some states in the U.S. don’t have All Payor Claims Databases (APCDs), so we have to collect claims from one data contributor at a time – usually from employers that operate in that location and whose employees and dependents use those hospitals.”

doctor using iPad

“Despite a federal rule for price transparency, only 24.5% of hospitals comply, highlighting the need for informed health care purchasing and policy changes to manage costs,” according to a doctor who spoke with Fox News Digital. (iStock)

Overall, he said, the researchers had a “sufficiently large sample of data” to estimate the overall relative price of each hospital and health system included in the report, Briscombe said, “but it would be nice to have even more claims data in order to publish the relative prices for all U.S. hospitals.”

Fox News Digital reached out to the Centers for Medicare & Medicaid Services and the American Hospital Association requesting comment.

For more Health articles, visit www.foxnews.com/health.

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Your June 2024 Horoscope: What’s in Store for You Based on Your Sign

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5 myths about schizophrenia, according to a mental health expert: ‘Huge stigma’

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5 myths about schizophrenia, according to a mental health expert: ‘Huge stigma’

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About 1% of Americans, or nearly 3.5 million people, are affected by schizophrenia — yet the mental disorder remains highly stigmatized and misunderstood, experts say.

The reason, according to Brooke Kempf, a psychiatric mental health nurse practitioner based in Indiana, is a general lack of knowledge about schizophrenia.

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“People may see somebody hallucinating and think, ‘That is schizophrenia,’ when there’s so much more to the illness,” she told Fox News Digital in an interview. 

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“It’s important for people to recognize that schizophrenia is a diagnosed and treatable medical condition.”

For World Schizophrenia Day, Kempf shared some of the most common myths and misconceptions surrounding the disorder.

Approximately 1% of Americans, or nearly 3.5 million people, are affected by schizophrenia — yet the mental disorder remains highly stigmatized and misunderstood, experts say. (iStock)

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Here’s a look at five. 

Myth No. 1: People with schizophrenia are violent

One of the greatest and “most harmful” myths is the notion that people living with schizophrenia are “scary” or “violent,” Kempf said.

“There is a long history of conflating TV or movie characters who are behaving in odd, confusing or frightening ways with a diagnosis of schizophrenia,” she said. 

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“However, we have to remember that these are made-up, dramatized situations. A diagnosis of schizophrenia doesn’t have anything to do with what we see on the screen.”

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When patients with schizophrenia experience an acute episode — perhaps having delusions or hearing voices — they might behave differently than they typically would, sometimes seeming angry or violent.

“The person is likely experiencing something within themselves that they might be arguing about or responding to, but they aren’t targeting anything toward another person,” Kempf said.

schizophrenia split

When a patient with schizophrenia is experiencing an acute episode — perhaps having delusions or hearing voices — they might behave differently than they typically would, sometimes seeming angry or violent. (iStock)

When symptoms are managed with medication, “you would probably have no idea of their diagnosis,” she noted.

“Through my long history of working in community mental health and hearing their stories, I know that people living with schizophrenia are good, caring, loving people,” Kempf said. 

“They are more likely,” she added, “to be the victim of a violent crime than the perpetrator of one.”

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Myth No. 2: People with schizophrenia have multiple personalities

There is a misconception that people with schizophrenia have multiple personalities, which could be because the Greek word “schizophrenia” means “split mind,” Kempf noted.

“However, people with schizophrenia do not have split personalities,” she said. 

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“They might have different behavioral characteristics when they’re ill and experiencing an episode, but it’s not because they have a split personality.”

Myth No. 3: People with schizophrenia are not intelligent

This assumption is completely false, according to Kempf.

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“If the illness isn’t well managed and continues to progress, or they have repeated relapses, patients will lose gray matter in their brains, and their cognitive function may decline,” she told Fox News Digital.

“But that does not mean they’re not intelligent.”

Man talking to a doctor

One expert said she’s worked with a multitude of “very successful individuals who also happen to live with schizophrenia.” (iStock)

Some patients may experience cognitive decline in the early stages of the disease — referred to as the “prodromal phase,” Kempf said — but early diagnosis and intervention can help prevent that.

Kempf said she has worked with a multitude of “very successful individuals who also happen to live with schizophrenia.”

“People with schizophrenia do not have split personalities.”

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In many cases, she noted, people can no longer see the “highly intelligent individual” behind the disease.

“As long as individuals with schizophrenia get the proper treatment — ideally with a long-acting injectable (LAI) medication — they can keep their symptoms controlled and function very well,” Kempf said. 

Myth No. 4: Symptoms of schizophrenia only involve hallucinations and delusions

Schizophrenia consists of what is clinically termed “positive” and “negative” symptoms, Kempf noted.

“Delusions and hallucinations, as well as changes in behavior and thoughts, are considered positive symptoms,” she said. 

schizophrenia symptoms

“Delusions and hallucinations, as well as changes in behavior and thoughts, are considered positive symptoms” of schizophrenia, the expert said.  (iStock)

Patients experiencing these symptoms may hear voices or have extra thoughts, delusions or fixed false beliefs, the expert explained. 

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“Hallucinations are not just hearing voices,” Kempf said. “They can occur in multiple ways based on our senses — seeing, hearing, smelling or feeling things.”

Negative symptoms are when people lose interest in the world around them, withdraw or don’t take an interest in everyday social interactions, according to Kempf. 

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“Patients with schizophrenia may get labeled as ‘lazy,’ or they don’t seem as put together,” she said. “But it’s not about laziness. The person’s brain doesn’t connect these things as being important.”

People with schizophrenia may also experience what are referred to as “psychomotor” symptoms, Kempf said — they might seem abnormally slow, and their speech and thought processes can be somewhat delayed or disorganized.

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“Unfortunately, if these negative symptoms continue and there isn’t treatment, they can impact cognitive functioning.”

Myth No. 5: People with schizophrenia require long-term or lifelong hospitalization

Hospitalization for a person experiencing acute schizophrenia symptoms is usually very short, according to Kempf. 

“For someone having an episode of schizophrenia, the average length of stay may be about five days.”

“In an inpatient setting, for someone having an episode of schizophrenia, the average length of stay may be about five days,” she said.

“If a patient doesn’t respond to medication and can’t function safely on their own, they might have to go to a longer-term, higher-level setting.”

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Today, health care providers aim to give people with schizophrenia community-based services so that they’re able to function on their own, Kempf noted.

This might mean supporting them with employment services and housing opportunities to ensure that they have an affordable and safe place to live. 

“Some patients continue to live with their family members; some might live in a group home,” Kempf said.

“People living with this disease deserve to be treated like human beings and with the same care we would provide someone diagnosed with a physical illness.”

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From a medical perspective, schizophrenia has different levels of severity, the expert noted. 

“But, again, if managed well, with early intervention, an individual can remain high-functioning and live independently,” she said. 

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“Our goal is the least structured environment possible, enabling the person to live a normal life where they can work, grocery shop and drive on a day-to-day basis.” 

Ultimately, Kempf said, schizophrenia should be viewed as a disease, not a choice. 

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Female doctor with male patient

“While schizophrenia is a mental health diagnosis, it should be thought of no differently than a physical health diagnosis of diabetes, heart disease or kidney disease,” an expert said. (iStock)

“While schizophrenia is a mental health diagnosis, it should be thought of no differently than a physical health diagnosis of diabetes, heart disease or kidney disease,” she said.

“It just impacts a different organ: the brain.”

Other brain disorders, such as epilepsy, tend to be more accepted by society, she said — but there is still a “huge stigma” surrounding diseases like schizophrenia, “probably because of the fear of the unknown.”

“It is treatable, and both medication and support services are available,” she told Fox News Digital. 

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“We all have a role to play in helping to dispel myths, foster understanding and reduce stigma,” she continued. 

“People living with this disease deserve to be treated like human beings and with the same care we would provide someone diagnosed with a physical illness.”

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The Crossfit Diet: What It Is, Risks and More | Woman's World

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