Percentage of Charges Model – 50% Off Double The Price?
Hospitals are generally not paid 100% of billed charges; however, hospital outpatient
departments are routinely reimbursed as a percent of billed charges by commercial payers……
“[On] average, hospitals charge 479% of their cost for drugs nationwide…. Most hospitals (83%) charge patients and insurers more than double their acquisition cost for medicine, marking-up the medicines 200% or more. The majority of hospitals (53%) markup medicines between 200‑400%, on average. A small share of hospitals — one in six (17%) — charge seven times the price of the medicine.”
Hospital Charges and Reimbursement for Medicines: Analysis of Cost-to-Charge Ratios (PDF)The Moran Company, for the Pharmaceutical Research and Manufacturers of America [PhRMA]