Sunday, March 15, 2009

Bargaining down the medical bills

A recent article in the New York Times health series, March 13, 2009[1], discusses the ways in which patients, particularly those who are uninsured and without adequate resources, can and do bargain with doctors and hospitals for reduced charges and payment plans. At one level, it is very distressing. As one of my closest and wisest friends says: “How sad--a ‘how-to’ guide for bargaining over medical expenses”.

At another level, given the horrific situation in which so many people find themselves when facing medical expenses, I’m sure that this “how-to” guide can be very useful and important. It is not only the poor and uninsured that are affected; many, many people who thought that they had adequate health insurance find themselves very unpleasantly surprised when actually confronted with medical bills. Remember, all of the people featured in Michael Moore’s film “Sicko!” had health insurance!

But it remains true that one of the most nauseating facts about the “business” approach to medical care is that it leaves those who are least able to pay with the greatest bills. The norm in business is to give discounts to large purchasers, but when this is applied to the health care of people, it is bizarre and offensive – large purchasers get big write-offs, poor people get charged full price! And this is not just a “little” more. I told the story of my hernia surgery – outpatient, in at 7 am, home by noon – and the $10,000 hospital (not doctor) charge. My insurance company paid $1,600, told me to pay $400, and the hospital wrote off the $8,000 as “contractual adjustment”. But if I was uninsured I would have gotten a $10,000 bill! How wrong is that? And, if I couldn’t pay and the hospital (after dunning me, sending me to collection agencies, and ruining whatever credit I might have left) finally wrote off my bill, they would claim $10,000 in “uncompensated care”, even though the insurance company would have only paid the $2,000. And our federal government exacerbates the situation by forbidding providers to charge anyone less than they charge Medicare. Charge Medicare; not what Medicare will pay. This is meant to ensure that Medicare is getting the “best rates” compared to private insurers, but it is the uninsured patient caught in the middle. If we charge $100, and Medicare will pay $45, it is illegal to charge the uninsured patient less than $100.

Therefore, I applaud the Times for showing how most hospitals and doctors are willing to negotiate rates and payment plans for needy patients. It is a small tool for the individual person to have in dealing with giants. Of course, the greatest beneficiaries will be the educated New York Times reader who has lost her job, lost his insurance, fallen on hard times through illness, but still has the skills to engage in such negotiation. I suspect that the vast majority of people who need these special arrangements are unlikely to read the New York Times, and often are poorly educated, non-English-speaking, and generally disempowered, making them both unaware that such “deals” can be struck, and without the skill sets necessary to negotiate successfully.

The whole system of charges, contractual adjustments, allowables, payments, is a nightmare maze of “gaming” between providers (e.g., hospitals and doctors) and payers, catching actual people in the middle. I have used “horrific”, “nauseating”, “bizarre”, and “nightmare” above to try to describe the current system, but feel as yet unsatisfied. “Indignity” doesn’t begin to describe it; “insane stinking mess” comes to mind. People should not have to learn how to bargain to get the best deal on their health care. When Michael Moore, distinguished health economist Uwe Reinhardt of Princeton, and director of the Health Insurance Association of American Karen Ignani appeared on “Oprah!” some months ago, Oprah asked Ms. Ignani (and I paraphrase, I don’t have the transcript): “So if I need a $200,000 procedure, why don’t you just pay it?” Flustered, Ignani said, “Well, you presume that the $200,000 is in fact what the procedure is worth; other hospitals may chart less …” – Oprah interrupted her: “I’m sick!”, she said, “I don’t have time to go shopping around to six different places to see where I can get the best deal!” Unsurprisingly, the audience, made of of regular people, not pundits, applauded wildly.

Clearly, we need a way out, and the way out is universal health care, where everyone gets a covered, for the same amount for the same services, preferably (mainly because of the cost savings it allows) by a single payer. As in civilized countries. Where hospitals are globally budgeted and physicians know what they will be paid for a particular service to a patient, whether s/he is a millionaire or a homeless person.

[1] Alderman L, “Patient money: Bargaining down the medical bills”, New York Times, March 13, 2009.

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