What practice involves charging private-pay patients more than the actual costs to offset losses from government programs?

The correct answer is cost shifting. This practice refers to the strategy where healthcare providers increase the prices charged to private-pay patients or insurers to compensate for financial shortfalls experienced from government-funded programs, such as Medicaid or Medicare. These government programs often reimburse at lower rates that do not cover the full cost of care, leading to financial losses for providers. By shifting costs to those who can pay, healthcare providers attempt to balance their budgets and maintain financial viability.

Cost shifting often raises concerns about the fairness of healthcare pricing and can lead to higher healthcare costs for private-pay individuals and insurers. It highlights the complexities in the healthcare system where not all forms of payment provide equitable coverage for the actual cost of services rendered.