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Why Does an Aspirin Cost $1 in the Hospital?

WRAL is airing a story this evening that will feature an interview with Dr. Atkinson explaining health care charges.  Here is some background on how this story came about.

At a recent Raleigh Chamber meeting, WRAL’s new General Manager Steve Hammel asked Dr. Atkinson to help him understand the charges he incurred after having surgery at another local hospital.  Dr. Atkinson explained how health care charges are calculated. Steve was impressed by the answer and thought the community would like to hear about it as well.   Dr. Atkinson agreed to an interview and was promptly contacted by reporter Bruce Mildwurf.

WakeMed prides itself on being transparent and always welcomes the opportunity to answer questions health care consumers have.  But, we also know that this is a very complex issue that likely cannot be fully explained in less than two minutes, so we thought we would share some additional thoughts on this blog in advance of the story airing. 

The easiest way to explain what goes into the charge for a medication or medical device is to walk you through what it takes for something as simple as getting an aspirin prescribed and delivered to the patient.  This likely requires more resources than you may think.

The doctor has to order an aspirin, the nurse inputs the order, the pharmacy tech fills it, the pharmacist checks it and then the nurse delivers it to the patient.  The charge for all of these individual staff and the technology it takes to fill the order are rolled into the $1 WakeMed charges for an aspirin.  It would be very easy to sensationalize the fact that an aspirin costs $1 in the hospital and only $.07 or less at Costco, but this would not be a fair comparison. 

A statement itemizing charges is also not a good representation of what a hospital actually is paid for performing a procedure.  Additionally, Medicare ruled long ago that you could not have a separate line item for nursing care or other required support like kitchen staff, housekeepers, laundry staff, janitorial staff, medical records, IT, doctors, lab personnel, human resources, reception, clerical staff, transcription, billing and coding staff, insurance verification, switchboard operators and the administrators required to ensure that everything runs as smoothly as possible. Not to mention the costs of state-of-the-art medical technology, food, telephone, TV, electricity, linens, pillows, mattresses, beds, cleaning supplies, etc.  All of these costs get rolled into the medication, supplies, and procedures listed on a charge statement.

The system is not perfect. In fact it has many flaws that need to be addressed, but for a hospital to survive and meet its mission of caring for all, it must learn to work within the system.  Hopefully, in the near future, we will all see some substantive changes in the way lives are covered and how the medical miracles of today are funded.

Update March 3 9:55 am: Missed the story last night, catch it here.  In a short period of time, Bruce did a nice job explaining many of the issues.

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3 thoughts on “Why Does an Aspirin Cost $1 in the Hospital?

  1. The easiest way to explain what goes into the charge for a medication or medical device is to walk you through what it takes for something as simple as getting an aspirin prescribed and delivered to the patient. This likely requires more resources than you may think.
    Answer: Bottle of Aspirin (generic) at the nursing station like we did it 30 years ago. Simple, cheap, though not making money for the pharmacist I’m sure.

    “A statement itemizing charges is also not a good representation of what a hospital actually is paid for performing a procedure. Additionally, Medicare ruled long ago that you could not have a separate line item for nursing care or other required support like kitchen staff, housekeepers, laundry staff, janitorial staff, medical records, IT, doctors, lab personnel, human resources, reception, clerical staff, transcription, billing and coding staff, insurance verification, switchboard operators and the administrators required to ensure that everything runs as smoothly as possible. Not to mention the costs of state-of-the-art medical technology, food, telephone, TV, electricity, linens, pillows, mattresses, beds, cleaning supplies, etc. All of these costs get rolled into the medication, supplies, and procedures listed on a charge statement.”
    Comment: Seems like to me all of these costs should be included in the room charge, not meds, supplies (depending on the treatments, and procedures (explains itself).

    All this is a lot simpler if you just accept the truth. As you said, there are many “flaws” in the system … and all the people responsible for the system is go along with it. To put it in layman’s terms … it’s all BS!

  2. This is interesting. People tend to forget all the things they are NOT billed for during their stay. Human nature, I guess.

  3. It is interesting. The medical community gives us an answer costing out the price and telling us what percentage each person gets and we are suppose to buy it because it sounds good. Here are my rebuttal questions. There is a charge for the doctor who writes the prescription, isn’t that cost accounted for in the bill you receive from the doctor? So aren’t you then being double billed for the cost of the doctor? Next, what about the charge for a double room? Most hospitals charge over $1,000 a day. What is the cost break down to justify the charge for the room and isn’t there some redundancy there as well? When we are presented with just the cost analysis of the aspirin we tend to be impressed with the justifications presented but if we step back and look at all the inflated costs it’s not so impressive. That’s like the hospital that told me they charge for parking to cover the million dollar cost of their parking garage. No they just want to suck every dime they can out of everyone that walks through their door.

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