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Hospital and Surgery Costs

Healthcare costs continue to skyrocket, but the federal government's "No Surprise Act" is trying to slow things down. Find out how the bill that became law in 2022 makes hospitals bill patients in a fair way for emergency care.

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Health care is big business, and Americans with medical needs are the ones paying the bill. Total healthcare spending in America topped $4.3 trillion in 2021, with more than 31% of that spent on hospital services.

Hospital costs depend on the hospital, where it is, the patient’s insurance coverage, and more. They can vary wildly. The average per-day hospital cost in the U.S. is $2,883, with California ($4,181) the most expensive, and Mississippi ($1,305) the least. The average hospital stay is 4.6 days, at an average cost of $13,262.

If surgery is involved, hospital costs soar through the roof. Some of the most common surgeries have price tags that top $100,000.

Those are alarming figures, especially for families with limited budgets or no insurance. It is not surprising that 60%-65% of all bankruptcies are related to medical expenses.

Even with insurance, how much of the bill will be covered varies. Medicare ($13,600) and private insurance ($12,600) pay top dollar, while the uninsured ($9,300) and Medicaid ($9,800) pay the least.

To remove some of the sticker shock, the federal No Surprises Act went into effect Jan. 1, 2022. The law makes it illegal for hospitals to charge more than the in-network cost for medical services.

The insurance provided by most employers is often the best way to deal with hospital bills. If you qualify, Medicare and Medicaid provide substantial help. If you don’t have insurance through work, you are eligible for coverage under the Affordable Care Act, with monthly premiums based on your income.

“Rising health care costs for hospital stays and surgeries have created a new financial and emotional epidemic for Americans,’’ said Gail Trauco, an Atlanta-based oncology nurse who also is a pharmaceutical trials expert and a licensed grief mediator.

Hospital and surgery costs can be overwhelming. Taking advantage of options than can help requires being an educated medical consumer and having the willingness to explore funding sources.

Hospital Costs

There is no standard system that determines what a hospital charges for a particular service or procedure. Many factors figure into hospital pricing, including an individual’s health circumstances, the cost of lab tests, X-rays, surgical procedures, operating room and post-surgical costs, medications and doctors’ and specialists’ fees. Surgery costs can cause the price of a hospital stay to skyrocket and varies with the type of surgery and other factors.

Recovering from surgery in an Intensive Care Unit (ICU) or in a recovery room can mean a difference of thousands of dollars, even if the surgery was similar. The cost of gallbladder surgery is different for someone with diabetes than it is for someone who doesn’t have diabetes.

Overall hospital costs vary considerably depending upon where a hospital is and who winds up paying the bill — the patient, an insurance company or a government program such as Medicare or Medicaid.

The bottom line: No two hospitals are likely to be the same. Regardless of a hospital’s published fee schedules for a service or procedure, the best information that a prospective patient can receive is a good-faith estimate. But until the bill is processed, there is no reliable way to assess a patient’s final hospital costs.

How Many People Stay in Hospitals Each Year?

The American Hospital Association estimates more than 33.5 million people stayed overnight at a hospital in 2022. A study of hospital stays before the COVID-19 pandemic looked at the most common diagnoses that kept people in a hospital for one night or more.

DiagnosesHospital stays
Heart failure1,135,900
Diabetes mellitus (with complications)678,600
Acute myocardial infarction658,600
Cardiac dysrhythmias620,000
COPD and bronchiectasis569,600
Acute renal failure565,800
Cerebral infarction533,400

How Much Does an Average Overnight Hospital Stay Cost?

The cost of a hospital stay varies, depending on the diagnosis, whether surgery was involved, and more. In 2021, the average hospital stay cost $13,262. Aside from surgery costs, the type of treatment needed while hospitalized can increase costs dramatically. For instance, an average stay for septicemia can top $19,000.

Surgery Costs

How much does surgery cost? Isn’t that always the first question? The answer almost always is – A LOT!

That’s because there are a lot of people and equipment involved in surgeries. You’re paying for the physician, the anesthesiologist, the nurses, the operating room, instruments and sterilization required, medications, recovery room, possibly a room for extended recovery time, consultations from other physicians … the list goes on and on.

Surgery costs vary drastically depending upon the procedure, hospital, location and even type of insurance, since insurers negotiate with providers over rates. For instance, a 2022 study of several U.S. healthcare systems found that the average allowed in-network charges by private insurance for hip and knee replacements ranged from $25,000 to $70,000.

Some typical average costs for common surgeries are:

  • Heart valve replacement: $170,000
  • Heart bypass: $123,000
  • Spinal fusion: $110,000
  • Hip replacement: $40,364
  • Knee replacement: $35,000
  • Angioplasty: $28,2000
  • Hip resurfacing: $28,000
  • Gastric bypass: $25,000
  • Cornea: $17,500
  • Gastric sleeve: $16,000

With those figures, patients might think they know the actual cost of surgery. But they must think again. There are numerous potential “add-on’’ costs to surgery that aren’t absorbed until after the fact, when financial reality becomes even more brutal. Even with the No Surprises Act, as provider transparency is worked out, add-ons can be major surprises for patients when the bill comes.

Some areas that may also be included or associated with surgical costs are:

  • Operating room per-hour costs
  • Anesthesia
  • Surgeon’s fee
  • Hospitalization costs (before surgery)
  • Pre-surgery treatment (such as dialysis and insulin pumps)
  • Anti-rejection medications
  • Visits with the surgeon
  • Insurance deductibles, co-pays and premiums
  • Non-medical expenses (such as childcare, travel and lodging)
  • Lost wages.

Factors Affecting the Cost of Surgery

Some of the factors affecting surgery costs:

  • Type of surgery: Some surgery is minimal, like a biopsy or colectomy, while some is major, like an organ transplant. How involved and invasive the surgery is will have a big impact on how much it will cost.
  • Inpatient or outpatient: If you have to stay in the hospital, the costs associated with that will drive up the cost of the surgery.
  • Anesthesia use: Local anesthesia numbs a small part of the body, for instance, for removal of a lesion on an arm, and is usually given by the doctor or nurse practitioner doing the procedure. Regional numbs a larger portion, for instance, an epidural during childbirth. Major surgery usually requires general anesthesia, given by an anesthesiologist, which renders the patient unconscious. The more extensive the anesthesia, the more expensive.
  • Healthcare facility: Hospitals set their own rates, and the cost of a procedure can vary greatly between hospitals.
  • U.S. region: Hospital and surgery costs vary, depending on the region of the U.S.
  • Health insurance coverage: Insurers and providers negotiate prices, and patients with Medicare may get a much lower price on the same procedure than a patient with private insurance would. The level of your plan coverage (for instance, it may or may not cover some aspects of hospital care, or fees), as well as co-pay and more, can mean differences in surgery costs for different patients.

Paying for Hospital Stays and Surgery

Medicare spent about $900.8 billion on benefit expenses for nearly 64 million individuals 65 or older or disabled in 2021. Inpatient hospital services accounted for $350 billion of that amount. Approximately 36.3 million patients per year are admitted to U.S. hospitals, according to the American Hospital Association, and Medicare pays 90% of the costs for almost 42% of them. Overall, Medicare payments account for 21% of all hospital care costs.

Medicaid, which provides healthcare coverage for people with low incomes, spent about $734 billion on healthcare services in 2021, including $235.3 in hospital costs. Its share of hospital admissions is about 20%, for whom it pays about 89% of all hospital costs. Overall, Medicaid pays for approximately 17% of all hospital care costs.

Private health insurance paid for $1.2 trillion in overall healthcare costs in 2021, with $448 billion paid for hospital costs.

Those who are self-employed or don’t have insurance through their employer can get private insurance through the Affordable Care Act. Monthly premiums are based on income.

Other public health insurance options are the Children’s Health Insurance Program (CHIP), programs with the Department of Veterans Affairs (VA) and the Department of Defense (DoD); workers’ compensation, and other state and local third-party payers.

In the best-case scenario, the patient will have primary insurance to pay most of the expenses, along with a secondary form of insurance that pays the remaining expenses.

But even if you have excellent insurance coverage that pays 80% of the total bill, the remaining 20% can exceed $100,000 for major surgery. Secondary or supplemental insurance can cover the remaining 20%.

Whatever your coverage, you may have to pay co-pays, deductibles or the total cost of hospital care and surgery.

Of the $443 billion out-of-pocket medical expenses people in the U.S. paid in 2021, $34 billion was for hospital costs.

Anyone having trouble paying their medical bills or medical debt should talk to a nonprofit credit counselor to discuss debt relief options, including debt management, debt consolidation and debt settlement.

Knowing what your insurance covers, what your costs might be, and what you’ll pay without insurance will help you navigate hospital costs.

How to Estimate Your Hospital Bill

Even with the No Surprises Act, which requires providing an estimated bill, it may be hard to determine what the costs will be.

The factors that will determine your hospital bill are:

  • Your location: Look online, including your state government site, for information on area healthcare costs.
  • Your network: Providers in your insurance network will cost less; providers not in your network will cost much more.
  • Where you get care: An ambulatory care or service center, urgent care, or a doctor’s office are much less expensive than going to a hospital. Check your insurance coverage, though, to make sure where you are going is covered by your plan.
  • Your insurance: Insurance companies negotiate with providers on rates for certain procedures. Some procedures also may not be covered by insurance. Check with your insurer to find out your options.

How Health Insurance Can Lower Hospital Costs

Health insurance will pay for a big chunk, on an average 90% and in some cases even all, of a hospital stay or surgery. Insurance lowers hospital and surgery costs by negotiating rates with providers and paying much of your bill for you. Insurance through the Affordable Care Act, for Americans who don’t have employer-provided insurance, has premiums that are based on income.

Surgery Without Insurance

If you don’t have insurance — or if you are undergoing a procedure not covered (such as weight loss or plastic surgeries) — you must be your best advocate.

Shop around for the best deal, since providers’ costs vary greatly. Make sure the provider is complying with the No Surprises Act, which should give you an understanding of what you will have to pay.

Do your homework and estimate your costs, including all of the expected expenses, including surgeon’s bill, anesthesia expenses, hospital care before and after surgery, labs, medications, X-rays, testing and doctor visits. Plan for contingencies (such as complications) that can increase costs. Establish what your payments will be.

Talk to your provider about your situation and find out what the options to lower costs are.

If you can’t pay your medical bills, never ignore the hospital’s calls. If medical bills are in collections, the billing department can help you set up a payment plan, and even allow you to pay the rate that insurance companies have negotiated for the procedure, reducing your costs.

How to Pay for Surgery Costs

There are many creative ways to cover the cost of surgery if you are not insured, it’s not covered by your plan, or if your plan caps the amount it will cover.

Borrowing from Retirement Savings

Borrowing from your 401k or 403b retirement plan means taking out a loan against your balance. You pay yourself back through payroll deduction. Most plans will allow you to withdraw 50% of your vested balance (up to $50,000) for health care expenses, without a penalty.

Payment Plans

This is a common option for patients who are paying for surgery without using insurance. The payments are usually monthly and may be in the form of a loan through the provider. Hospitals are usually happy to establish a payment plan, especially with an unplanned or emergency surgery,. Monthly payments are more attractive than no payment. Such plans, when paid on time, will keep the debt from appearing on your credit report as a negative account.

Medical Crowdfunding

GoFundMe and other crowdfunding sources, powered by donors, can sometimes be an effective way to pay for medical needs, but if you go this route, don’t base your medical bills budget on the outcome. Campaigns are often not successful. One study over a five-year period found that 16% of such campaigns raised nothing, and fewer than 12% reached their goal. And even if it is successful, be sure to budget for the percentage the campaign platform takes, usually 2.9% per donation.

Using the Nest Egg

Spending your life savings on surgery is definitely not ideal. But if the surgery improves your quality of life, it could be money well spent.

Home Equity Loans

Home equity loans are borrowed against your home’s equity, which is the value of the home minus what you owe. Home equity loans usually allow up to 80% of equity to be borrowed. The benefit is that if you have good credit and equity, the loan won’t be hard to get. The downside is if you can’t make payments, you can lose your house.

Unsecured Loans

Mortgages and car loans are “secured” by the property the lender can take back if you don’t pay. Loans that don’t have this collateral are called unsecured loans, and usually have higher interest and are harder to get, requiring a guaranteed income and good credit. Surgeons might have their own loan programs, but the bottom line is the interest rate. If you can get a better rate than what the provider is offering, go for it.

Shop Around

Studies show that most patients don’t seek pricing information or comparison shop. They should because hospitals and doctors charge different rates. If you’re not tied down to a network, it pays to shop around. Many state governments have set up online comparison tools, so patients can look up procedures and compare prices in their state.

Ask for Reduced Rates (Or Pay in Advance)

There are discounts available, but you must ask for them. You can also pay what you can. Don’t be shy about asking. Even a $5 monthly payment toward a hospital bill is an effort accepted in good faith.


Pediatric cancer patients can seek treatment at St. Jude’s Children’s Hospital, where all treatment is free. Shriner’s Children’s Hospitals offer free services for pediatric orthopedic patients. Nonprofits and other organizations also provide financial help for cancer patients and others who need help. Search online to see if any apply to your situation.

Speak Up

Trauco said it’s helpful to become your own patient advocate. “If you are truly in need, write about it and talk about it,’’ Trauco said. “Contact your local newspapers and TV stations to get the word out. Good Samaritans are still among us, And a medical expert may offer assistance to a patient at no cost. Tell your story because someone else is also living a parallel trauma.’’

Debt Relief for Credit Card or Personal Loan Debt due to Medical Costs

Hospital and surgery costs, and other medical bills, can add up fast. Maybe you paid with your credit cards, and now they’re maxed out and you’re having trouble paying the bills. Or maybe the medical debt, or loans you took out to pay it, are too much for your budget.

If you’ve had a medical crisis, the last thing you need is the stress of paying bills.

Talking to a credit counselor at a nonprofit credit counseling agency can be the first step to help you reduce your outstanding medical costs and get help with your medical bills.

A session with a counselor at a nonprofit credit counseling agency is free, and they are trained to help people who are seeking debt relief find the right option for their situation. They will review your budget and discuss various debt relief options, as well as what your options are specific to your medical bills, if needed.

You sought medical help when you needed it. There is no reason not to take important steps when you need help with debt and paying medical bills.

About The Author

Maureen Milliken

Maureen Milliken has been writing about finance, banking, investment, entrepreneurship, real estate and other related topics for more than 30 years. She started as the “Business Beat” columnist for the now-defunct Haverhill (Mass.) Gazette and currently is one of the hosts of the Mainebiz business-focused podcast, “The Day that Changed Everything” in addition to her daily writing. She also is is the author of three mystery novels and two nonfiction books.


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