A reasonable citizen might assume that teaching hospitals with their higher mission and values, would embody American health care's best and brightest
   Or at least, it's pretty to think so.
   However...
   They don't.
   Basically, because what most hospitals charge versus what they are paid is straight out of a Persian rug market.
   Why?
   Largely because most hospital officials have little idea of the actual cost of their various goods and services they provide to their patients.
    Usually, their costs are determined via a formula established by what the industry calls a “chargemaster” – which can and does vary dramatically from one hospital to another.
    And nowhere is the disparity more dramatic that in the horrific difference between the actual “cost” of patient care versus the gross charges the hospital bills for its services.
    Which is how and why uninsured patients are the ulitmate victims in the nation's healthcare system – basically because they are legally responsible for the gross amount of their bill as opposed to the discounted amount paid by a patient with healthcare insurance.
    Which is clearly the most disengenious and cruel aspect of acute health care in Amerca.
    Trouble is, at this point in the discussion, the eyes start to glaze over for most thought leaders and elected officials struggling with the Alice In Wonderland World that is healthcare in America.
    And so we have today's  meaningless national healthcare reform snitstorm.
    Now...
    Every hospital works off three pricing units worthy of the Middle East's best rug merchants::
    One – Retail (the Gross Charges for a patient's care – and the amount an uninsured patient is usually charged.))
    Two – Discounted Price (the neogitated amount Medicare, Medicaid and private insurance carriers reimburse a hospital for an insured patient's care.)
    Three – Operating Expenses (the actual cost of a patient's care).
    So....
    Here's how it works – or DOESN'T - using 2007 financial data from Miami-Dade's Jackson Health System, the average Florida teaching hospital and the average Florida hospital:

Miami-Dade's Jackson Health System
(Per adjusted admission*)
Gross Charges                       $39,484
Medicare Reimbursement     $22,308 (56.5% of gross)
Medicaid Reimbursement     $17,175 (43.5% of gross)
Patient Care Cost                   $15,343 (38.8% of gross)
Surplus (Loss)                         $291

Average Florida Teaching Hospital
(Per adjusted admission*)
Gross Charges                        $35,515
Medicare Reimbursement     $9,998 (27.% of gross)
Medicaid Reimbursement      $11,187 (31.5% of gorss)
Patient Care Cost                   $11,094 (312% of gross)
Surplus (Loss)                         $587

Average Florida Hospital
(Per adjusted admission*)
Gross Charges                        $33,197
Medicare Reimbursement     $7,370 (22.2% of gross)
Medicaid Reimbursement      $7,370 (22.2% of gross)
Patient Care Cost                   $8,390 (33.6% of gross)
Surplus (Loss)                         $477

(*A standard healthcare industry baseline that reflects both inpatient
and outpatient volumes)

SOURCE: Agency for Health care Administration