Why are hospitals able to charge different purchasers prices for the same medical services?

Hospitals are able to charge different purchasers prices for the same medical services for a number of reasons, including:

1. Insurance status: Hospitals typically charge higher prices to uninsured patients or those with high-deductible health plans than they do to patients with more generous insurance coverage. This is because insurers negotiate lower rates with hospitals in exchange for agreeing to cover a large number of their members.

2. Payer type: Hospitals also charge different prices to different types of payers, such as government insurance programs (Medicare and Medicaid), commercial insurers, and self-funded employers. Government payers typically pay lower rates than commercial insurers, and self-funded employers may be able to negotiate even lower rates.

3. Volume discounts: Hospitals may offer discounts to patients or payers who purchase a large volume of services. This is common for large employers or health insurance companies that have a large number of members in a particular area.

4. Geographic location: The cost of medical services can vary significantly from one geographic area to another. Hospitals in high-cost areas may charge more for the same services than hospitals in low-cost areas.

5. Type of hospital: The type of hospital can also affect the cost of medical services. For-profit hospitals typically charge higher prices than non-profit hospitals, and teaching hospitals may charge more than community hospitals.

6. Hospital policies: Some hospitals have policies that allow them to charge different prices to different patients based on their ability to pay. This practice is known as "chargemaster pricing" and it has been criticized by consumer advocates who say that it can lead to unfair and excessive charges.

The ability of hospitals to charge different prices for the same medical services can make it difficult for patients to comparison shop and find the best possible price. It can also lead to financial hardship for patients who are uninsured or underinsured.