New Report Shines Light on How Hospital Markups Increase Costs for Patients

Despite a narrow focus on drug spending, roughly 30% of every dollar spent on health care in the United States can be attributed to hospitals. A new report from The Moran Company shows how hospitals are driving up costs. Here’s what you need to know:

1. Hospitals charge 500% of what they paid for medicines, on average. For the 20 medicines that were analyzed, hospitals charged patients 234% to 724% more of what they paid for medicines.
2. Commercial payers reimbursed hospitals nearly 200% of what the hospital paid to acquire the medicine. Because patient cost sharing is often based on these markups, this practice ultimately drives up costs for patients.
3. It is estimated that 340B hospitals are reimbursed, on average, almost three times the discounted 340B price of a medicine. Nearly 60% of all hospitals in the United States participate in the 340B Drug Pricing Program, allowing them to purchase medicines at substantial discounts, but not requiring them to share these savings with patients.