WhiteCoat

The High Cost of Medical Care

I read an article in BusinessWeek Magazine about how hospitals are now putting an even bigger pinch on people without insurance. When the patients can’t pay, some healthcare providers are “requiring” the patients to fill out a credit application for a “CareCredit” card. Patients are given the impression that they can just pay a little at a time. If the patients don’t pay a substantial amount every month, the interest rate on what is owed jumps to 26.99%! Over the course of 4 years, these poor people end up owing more than double the initial charges.
Then, if the patients don’t pay, then the 600 pound gorillas in the credit industry, such as GE, US Bancorp, Capital One, and Citibank use heavy-handed tactics to collect full price for the medical services in addition to the hefty interest rates. A .pdf file of the article is here if the above link goes dead.

John Q. Public is getting squeezed.

A small news blurb just out from United Press International states that 20 percent of US adults cannot afford to pay for needed healthcare.

Girlvet recently put up a thought provoking post about how hard of a time self-pay patients have paying for health care.

One of the things that really upsets me about medical care is the variability and secrecy of hospital charges. A hospital might charge an arm and a leg for a procedure, but most of the time the patient never knows what the procedure costs until after they have received the bill. Compare this to going to the supermarket, buying some cereal, a couple cases of soda, some fresh fruit and a jar of peanut butter, getting home and eating everything, then receiving a bill for $500 in the mail.

Market forces cannot work if there is no way to compare charges.

It gets worse. If you get a bill and try to compare charges, hospitals are notorious for listing a bunch of gobbledygook and indecipherable charges. See this MSN article (or in .pdf). Ninety dollars for a 70-cent I.V.? One hundred twenty nine dollars for a “mucous recovery system” that ends up being a box of Kleenex? Patients are going bankrupt and being sued over charges like this?

A friend of mine brought me a bill that her father received for electrophysiologic heart testing at a regional teaching hospital. The procedure lasted a few hours and her dad was out of the hospital in 6 hours. Now I understand that this is a specialized area, and I realize the the equipment is probably quite expensive. But … the total hospital bill was almost $32,000. That didn’t include the physician charges.
MRI machines are more than $1 million, but an average MRI costs about $1500 to $2000 (my estimate). How does EP testing get to $23,493? Notice how the charges are just lumped into “Cardiology” and “Med-Sur Supply”? What are those charges for?

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Want To Fight Back?

  1. Ask for an itemized bill in writing. Fax the request to the hospital so you have proof that the hospital received your request.
  2. If you didn’t receive something, make the hospital take it off your bill.
  3. Don’t pay for any charges that you don’t understand and that the hospital cannot specifically explain to you.
  4. If you don’t have insurance, ask the hospital about whether you are eligible for charity care. Most religious-based hospitals must provide a certain amount of charity care and most non-profit hospitals must provide charity care to maintain their non-profit status.
  5. If you don’t qualify for charity care, ask the hospital about a discount for paying cash. If the hospital has to send something out to a collection agency, they have to pay the collection agency 20 to 30% of the amount collected. Ask for a discount of that much if you pay cash.
  6. Don’t be afraid to go to court. The hospital has to prove that their charges are reasonable in order to collect. If a court finds out that the hospital is charging $129 for a box of Kleenex, chances are pretty good that the court will reduce or eliminate the charges.

I found a web site where you can compare your hospital with others in your state to determine how much your hospital bills compared to the national average: http://www.hospitalvictims.org/ (Disclaimer: No affiliation with the group. Don’t know anything about them. Just thought the database they provide is a neat idea)

A list of payments that Medicare makes for certain conditions is here. If a hospital is charging you 10 times more than the amount they accept from Medicare, how can they claim that what they are charging you is “reasonable”? Show the judge a copy of the payments Medicare makes (and that the hospital accepts) for the same condition.

In addition, www.statehealthfacts.org gives a wealth of data on demographics, costs, and payments.

10 Responses to “The High Cost of Medical Care”

  1. rlbates says:

    “If a hospital is charging you 10 times more than the amount they accept from Medicare, how can they claim that what they are charging you is “reasonable”? Show the judge a copy of the payments Medicare makes (and that the hospital accepts) for the same condition.”

    While I agree with you in the most part. I don’t agree that Medicare reimbursement is ever (or rarely) reasonable to the doctor or hospital. The “real” charges and reimbursements need to be more true to costs all around–probably more like twice (minimally as our costs go up and employees want cost of living raises) what Medicare allows.

    That said–it’s a good post. Nice job.

  2. 241commuter says:

    Bless you for a post that says exactly what I’ve been ranting about to my friends and associates. I’ll go one step further – what about the damn insurance companies that unblinkingly pay?

    I found myself up in Redding, CA in a hospital that became infamous a few years ago for performing needless cardiac procedures. At the time (and maybe still…) there were no HMOs there. That hospital had no contract with my provider or insurance company. The bill had all kinds of outrageous stuff in it. $360 pair of tubular crutches that can be had at Savons for $25. A $684 plastic donut to sit on that can be had at Savons for $25. It’s not surprising that the hospital charged what they could because Aetna paid every single penny of it, no questions asked. I called up and asked a telephone flunky why that did that and she was clueless where I’m coming from.

    So, next time your HR department shrugs their shoulders and explains that medical costs are going up and the company can’t afford to pay the share they used to, now you know.

    My guess is that that $129 box of Kleenex is aimed at the Aetnas of the world who pay because they doen’t think it worth there while to fight the handful of out-of-plan emergency cases they process. Afterall, they can just pass the cost along. People who meekly pay that stuff is just an added bonus. I’m with White Coat on this one: The only way to fix this is if 100% of all people who encounter this go to court. Make the cost of being outrageous, outrageous.

  3. Rachel says:

    I work for a large health insurance company and I see this stuff every day. It’s amazing the mark up these hospitals charge. I know that insurance companies (for the most part) have contracts with most hospitals, but I’ve seen bills that are around $50000 that once we’ve taken our discount end up only being reimbursed with a few thousand dollars. There are a lot of companies out there that will review your medical bills for errors and incorrect charges. Most of them will look at your bill for free first to tell you whether it’s even worth paying for their service. They tend to work off a commission based on how much money they save you. Also, a lot of hospitals will work with you to give you the discounts that insurance companies get. Just ask what they can do to help you and usually they will. People tend to never ask for the discounts they can get.

  4. X-Ray Geek says:

    $220 for an EKG???????????!!!!!???????? I can only charge Medicare 13 bucks and some change!!!!! That is flippin ridiculous!

  5. SeaSpray says:

    Good post! I have a PPO insurance plan. The hospitals and most doctors I go to are participating providers. I don’t recall the amounts but if the billing was accurate in the 1st place then they have agreed to huge reductions as part of the contract. The hospital bills were high but I honestly felt that they were being cheated because of how little they reimburse. I make out alright as the pt by comparison. I have a friend who works for her doctor that told me that they do this because they get more patients with the contracts because pts go where they can afford to go. I have wondered if it isn’t some kind of game that both parties play. Hospitals and docs purposely overcharge because they know insurance will deny and so this way they get what they want? I am not saying it is so but have wondered. And as far as other plans or non participating plans paying…that’s all gravy. I am just so grateful urodoc stayed on the plan or I would not have been able to continue with him and his group. I have seen my co-pays and my part of deductibles add up and I really feel for the people who don’t have ins.

    *That credit card with the escalating interest is awful and sounds like a deal with the devil. I know it is hard to get pts to pay but I do not see where making it impossible to pay helps them or the hospital.

    The charity plans do help by covering all hospital expenses but doesn’t cover meds or physicians. I admit I didn’t understand how a self pay pt could accept the charity forms, be given explicit instructions on what to do and then still present the next time without ever having applied and in the meantime their bills were piling up.

    I do know this for sure. Everyone should review every EOB they get because mistakes are made by all the providers but mostly the ins. company and the hospital billing depts and there are various reasons for that. (stories ad nauseam about this) I have been fortunate that my physician billers have been good-just some minor things. Sometimes you will need to address the issue several times with different people. Bottom line…know your plan and if something doesn’t look right…pursue it.

    I have a good friend that works for a radiologist group. She has another position and likes the billers for that group but said they are careless, joke about their mistakes and talk all day. Mistakes are made. Not only is it hurting the radiologists but could be hurting the patients too.

    You are so right Whitecoat about reviewing medical bills!

  6. anon says:

    The other nightmare is the fact that hospitals outsource tons of stuff from labs to specialists. So not only do you get an incomprehensible bill from the hospital, you get incomprehensible bills from a bunch of other people as well. And those folks outsource their billing so the people who send the bill have no idea what is going on either. When my daughter was born, apparently something involving a blood test that I had was coded by the lab as transcribed by a person rather than printed out using a computer printer. The former was not covered by my HMO and according to some state legislation they were supposed to have hvae done the computer printout version because they didn’t have to pay a person to look at a computer screen and write it down. At least, that is as close as I got to understanding it. I personally have no freaking clue what actually happened as I was busy trying to recover from my 36 hour labor while spending all my time in a chair in the NICU breastfeeding my admitted-for-bacterial-sepsis daughter. So two or three months later I letter from the lab’s billing company saying that I owed them $76 and change for the interpretation of the blood test results. I proceeded to spend many hours on the phone with billing company (your insurance company denied the claim so you have to pay us), insurance company (yes you had an approved hospital stay and your plan covers this and it was an approved lab but we don’t cover *this* service from the lab we cover this other one so you have to get them to submit it again as the service we cover because by law we don’t have to cover the other one) the billing company (we don’t know what happened but this is the record we have of the service you got and you have to pay it or else!!!), the hospital (you don’t owe *us* anything and we don’t have any idea who is responsible an outside company handles the lab and it’s not our problem) etc. I finally got it to go away by taking my newborn and going to the hospital and asking questions and questions and keeping going back to the main directory people after whoever they next thought might be able to help me figure it out. I ended up inside the lab in the hospital talking to a series of people before they straightened it out somehow. It was a total nightmare. It’s one thing to dispute a bill with someone you know you’ve done business with. It’s impossible to dispute a bill with the space between a bunch of different people.

    This is all somewhat timely as I received a bill this morning (from the same lab, no less) for $10.50 in charges relating to an ER visit I had two months ago that my insurance company apparently denied. In the services rendered section of the bill it says ‘Balance forward.’ So not only do I not know why I’m getting the bill, I don’t even know what service this is for until I pick up the phone.

    It’s beyond ridiculous. And I’m really lucky in that both times I was treated for things from which I recovered completely relatively quickly. I have no idea how people with serious chronic or terminal illnesses deal with this stuff. Especially folks who don’t have family who can help them. Yikes.

  7. Jamie says:

    My husband and I were without insurance for a while. During that time we had to just not seek medical help because we couldn’t afford it. However, my husband started having absent seizures, so we broke down and took him to the ER. The bill was beyond anything that I could even hope to understand. A couple years later that hospital was involved in a class action suit over their billing procedures and prices.

    Early last year my husband was visiting his daughters out of state when he tried really hard to die. (Not on purpose, but I don’t know fancy medical terminology for stopped breathing and heart stopped beating. I call it dead, but it didn’t stick.) We have county insurance, so out of the county we’re not covered. The hospital’s charitable fund payed te hospital bill that was just over $100,000 but we still owe several thousand more to the lab, radiology, and about 5 or 6 doctors. I don’t understand the bill, but we’ll pay it. They were wonderful about providing services so we’ll keep making those payments. I can’t put a price tag on his life.

  8. CrankyProf says:

    Check out my archives from August; the final bill for my care and the Butter Biscuit’s care was a cool half-mil. The pharmacy charges alone were a hundred grand. Must have been some good shit — wish I could remember.

    Keystone Healthbastards paid all but $500 of it.

  9. T Ellis says:

    We give away the Kleenex, and an IV start is $18. That’s cheaper than an oil change, but I can change my own oil. Can my mechanic start his own IV?

    It would be nice if I could hand them a price menu at triage, but at that point I’m only guessing at what will have to be done.

    We switched from calling them self-pay. Now it’s charity care. I think it better reflects the likelihood that any part of a bill, no matter how big or small, will be paid. We also don’t itemize the medical supplies, linens, etc that are stolen from us daily.

    If a hospital is charging hundreds of dollars for some tissues you can get for $0.89 at CVS, that’s a crime, but I question how many are really doing this. My own recent ER visit resulted in an itemized invoice which was perfectly readable, although I could argue that I’m entitled to a discount because I triaged myself and went to the pharmacy for my own medicines.

  10. Wendy says:

    Well this just confirms my questioning. In the hospital with my third case of Viral Meningitis, no insurance, 8 day stay on IV antibiotics I was given pills to take daily. Colace (understandably~thank you)~ but Lipitor? Never been diagnosed with high cholesterol, never was told-just given, never was discussed “why?” (and I asked)~ and for only several days while hospitalized? How was that helping me? It was just charging me for the cost of pills. Was never given any information about it or any prescription to continue taking. Guess I didn’t really need it huh? Pissed on so many levels for all the bills I’ve accumulated from about 6 different places. Applying for Charity Care is a laugh! I am however grateful for the care I received the first 4 days. Private room: due to the HUGE scare it gave hospital workers to possibly have an infectious disease case on their watch. Actually had a nurse tell me it was all the talk in the cafeteria. (made me feel R E A L special!)Then, due to the upcoming holiday (Memorial Day Weekend) they cleared my floor and moved me to an area full of addicts. My roomie was one and had a male visitor come by occassionally to get a hand job from her. Lovely. In pain, unwilling to swallow any more Perc’s and needing something better than the Tylenol, I finally had someone who wasn’t off for the holiday stop by (7th day) and give me some Darvocet. No horrible side-effects, thank goodness. But by that 8th day I made myself walk the hallways showing them I needed O U T !Dismissed and home, still sick in bed, but home. : ) I haven’t paid a cent yet and need to know the correct way to pay this huge cost. I barely have groceries in my house, work part time (seasonal)that will end Jan.10, 2009. I don’t want to be sued. I don’t want interest to take the bill higher yet. Don’t know where to start. Not sure about any of those credit card options either. Any suggestions? Besides robbing a bank?

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