In 2004, the rates charged to many uninsured and other self-pay patients for hospital services were often 2.5 times what most health insurers actually paid and more than three times the hospital’s Medicare-allowable costs

Explain in words the procedure you followed for each of your calculations.
Be sure to show all your steps when applicable.


Give a real-life example of a medical service for which someone with insurance pays a particular cost. (Hint: This may take research to find the cost of a medical procedure for an insured individual.)
With the same example, suppose that a self-pay patient is marked up 2.5 times the amount that the insured patient pays. How much would the self-pay patient pay?
What are the advantages for the hospital to have markups? What are the advantages for the insurance company to have markdowns? What are the disadvantages?