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CARSON CITY -- When Mel Henkin went to the emergency room after falling and injuring his head, his care included a pill for pain relief. Henkin says that pill cost him $3.50.

So he wasn't surprised to hear that a new study has found Nevada's hospital patients are billed three times as much as it costs for hospitals to provide them treatments or medicines.

"Nevada has grown so fast in the last 10 years," said Henkin, a member of the Senior Citizens' Advisory Board for the city of Las Vegas.

"All of our services have fallen behind. Look at the schools. We just don't have enough hospitals here."

The Institute for Health & Socio-Economic Policy study found Nevada ranked seventh among states in the 2003-04 fiscal year in marking up bills over actual costs.

A typical hospital in Nevada marked up its charges by 296 percent. That means the hospital sent out a bill for $396 for care that cost $100.

Last year the same group found Nevada hospitals' average markup was 276 percent, which at the time placed the Silver State sixth among states.

"The result is that more people than ever are priced out of access to care," said California Nurses Association President Deborah Burger, whose organization commissioned the study.

Charles Idelson, a spokesman for the California Nurses Association, said the most profitable of 4,200 hospitals studied nationally were generally those that marked up charges the most.

He compared what a hospital charges with what happens at a car dealership. The sticker price is a starting point for negotiations with buyers, but the dealer never really expects to get that price. "With higher charges, the hospitals expect ultimately to get higher reimbursement," Idelson said.

But Rick Plummer, a spokesman for the Valley Health System, said the marked up -- or billed charge -- has little to do with the reimbursement hospitals actually receive or the profits they earn.

"Hospitals get paid on a small percentage of billable charges," said Plummer, whose company operates Spring Valley, Desert Springs, Valley and Summerlin hospitals.

He said medical costs continue to rise, as do the number of patients who do not pay their bills. Charges are high in part because of the number of uninsured residents -- Nevada ranks fourth in the nation in that area.

"If you go into the emergency room and don't have insurance, the next five people behind you will be paying your bill," Plummer said. "It's the same as a retail store. When someone shoplifts, everyone else pays for it."

Amy Stevens, a spokeswoman for Sunrise, Mountainview and Southern Hills hospitals, agrees.

"What you are seeing is the effect of having a highly managed care oriented market," she said.

Typically, businesses or insurance companies negotiate to pay a small percentage of the billed hospital charges.

Stevens added some contracts call for a set per diem fixed rate that has nothing to do with what care cost the hospital. A state law also requires hospitals to give people without insurance a 30 percent discount from the billed charge.

As the result of the negotiated rate system, larger entities, such as the Culinary union, secure the steepest discounts, according to Bill Welch, president of the Nevada Hospital Association.

None of the hospital officials disputed the study's findings. Idelson said the data cannot be challenged since it came directly off reports the hospitals were required to submit to federal health authorities.

Nevada State Medical Association Executive Director Larry Matheis said the hospitals use the billed charges as the baseline when they negotiate with businesses and insurance companies that are seeking discounts.

"In most cases, the small guy pays higher than the big guy and the uninsured guy pays the highest," Matheis said.

Matheis said that is the problem with negotiated payment systems -- the person with the fewest resources will be asked to pay the highest bill.

Hospital profits nationally increased to a record $26.3 billion in 2004, up from $22.6 billion in 2003. But Nevada hospital profits in 2004 were down from the previous year. Hospitals earned profits of $60.3 million in 2004, down from $87.1 million in 2003.

Both Welch and Plummer said Nevada hospitals are reinvesting their profits in the community.

Plummer said his company has invested $200 million in new facilities and equipment in the Las Vegas Valley over the last five years and will open a new hospital in 2007.

"You won't find many other states with new hospitals opening," Welch said. "We have three more under construction. The corporations that own these hospitals are infusing more into this state than they are taking out."

Nonetheless, the study found Nevada hospitals marked up their charges as much as five times what care cost them.

Lake Mead Hospital Medical Center -- now called North Vista Hospital -- marked up its charges by 523 percent; the markup at Valley Hospital Medical Center was 488 percent.

But North Vista, according to a state report released last February, lost $1.2 million in 2004.

The purpose of the California Nurses Association study was to show how health care in America is failing, according to Idelson. "It is a horrendous scandal," he said. "There are 46 million uninsured Americans. The health care needs to be changed so every individual who needs care receives it, not just rich corporate CEOs."

The nurses association favors a national health care system that is based on a single standard of care for all, Idelson said.

Review-Journal writer Lisa Kim Bach contributed to this report.