‘Uncompensated Care Scam’: The Story of the $100 Aspirin

Aspirin (Wonder Why)Dr. Keith Smith is a co-founder and owner of the Surgery Center of Oklahoma. His clinic is revolutionizing medicine by using free-market principles to provide quality, affordable surgical care.
One consumer-friendly principle that Smith’s group uses is price transparency: when you show up to their clinic, you know exactly what you’re going to pay when you walk out the door. The group’s website says, “The pricing outlined on this website is not a teaser, nor is it a bait-and-switch ploy. It is the actual price you will pay.”
In a new series of web videos, Smith is now seeking to educate Americans about the causes of high costs in medicine. Smith’s July 11th video tackles the question of the “$100 aspirin.” This practice of charging $100 for a one-cent aspirin is an elaborate accounting scheme devised by large hospitals.
By charging $100 for the pill, the hospital knows they are likely to only be reimbursed $5 by the patient’s insurance provider. But this allows hospitals to claim a $95 “loss,” which they categorize as “uncompensated care” and use as a mechanism to suck more money from taxpayers.
Dr. Smith explains this practice better than I could:

If you’re interested in learning more about the fuzzy math that Arkansas hospitals use — at your expense — check out this recent paper on hospital financing.

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