Health care prices continue to rise precipitously despite the Coronavirus Recession, cutting into profits and paychecks, offering a powerful reminder that the nation’s chronic economic problem remains unsolved.

Hospital services make up 44 percent of health care costs in the United States, and the prices hospitals negotiate with private insurance companies keep rising compared to the rates paid by Medicare, the government health care program for the elderly.


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In Texas, private insurers paid 252 percent more than Medicare for the same medical services in 2018, according to a study by the Rand Corp., a Santa Monica, Calif.-based analysis and consulting firm. That’s 20 percentage points higher than the difference in 2016, according to the latest data available.

A hospital’s ability to charge self-insured employers and insurance companies higher rates is why hospitals spend so much on billboards and in newspaper advertising. The last thing they want is more patients on Medicare or Medicaid, the federal-state partnership covering the impoverished and disabled.

Rand took the extra step of breaking the data down by individual facility, revealing that hospitals located in wealthy suburbs charge much more than downtown hospitals, even if both are owned by the same system.

For example, Memorial Hermann Northeast in Humble charges 294 percent of Medicare rates, while Memorial Hermann Memorial City charges 205 percent. In San Antonio, Methodist Hospital charges 235 percent of Medicare rates, while an hour up Interstate-35, South Austin Medical Center charges 332 percent, even though both are part of HCA Healthcare.