New Delhi: Getting medical treatment in hospitals is becoming more expensive as hospitals have started charging patients extra based on demand, similar to how airline ticket prices increase when more people book flights. This practice, known as “surge pricing,” is now being applied to surgeries and other medical treatments, which has significantly raised healthcare costs for patients.
If more patients are admitted to a hospital, new patients may have to pay a higher price for their treatment. Hospitals are applying this system, especially when their operation theaters are nearly full, charging patients extra fees referred to as “peak charges.”
How Surge Pricing is Affecting Patients and Insurance Companies
The concept is quite simple: when a hospital’s operating rooms are almost fully booked, the cost of using them increases. This results in higher medical bills, not only affecting patients but also causing issues for insurance companies. Earlier, insurance companies could offer comprehensive medical packages with fixed prices, but now, due to fluctuating hospital charges, insurance companies are facing difficulties in covering these extra expenses.
According to a source from the health insurance industry, these additional costs are making it difficult for insurance companies to predict and manage healthcare expenses. This trend has forced insurers to offer new policies that exclude certain procedures or come with higher premiums.
Treatment Costs Are Rising Sharply
Healthcare costs have been steadily rising year after year, with hospital inflation growing at a rate of over 14% compared to the regular inflation rate. Hospitals have introduced these surge pricing methods, which have caused treatment costs to soar by 20%. Even common surgeries, such as laparoscopies and hysterectomies, now come with additional surge charges if performed during peak times when hospitals are busy.
New Pricing Models Are Impacting Routine Procedures
Hospitals are also unbundling their services to increase revenue, further driving up the cost of treatment. For example, procedures like angioplasties, which used to be offered as a single comprehensive package including angiograms and stents, are now split into separate charges. Hospitals are billing patients for each component of the treatment individually, making healthcare far more expensive than it was before.
Patients and insurance companies are now facing the brunt of these rising costs. As hospitals continue to adopt new pricing models and surge pricing becomes more common, it is becoming increasingly difficult for people to afford even routine medical treatments.
