These stories have zeroed in on billing practices that can’t help but provoke an outcry. These include attempts by doctors and hospital to gouge patients for hard to account for and difficult to prevent “out of network” charges, which insurers decline to cover. They also include cases involving steep sums owed due to “balance billing,” in which doctors and hospitals not only take insurers’ “acceptable” reimbursements but then demand yet more payment from patients for the uncovered amounts.
Chad Terhune, a reporter for the independent Kaiser news service, found a doozy of a balance-billing case involving a Texas hospital and Drew Calver, 44, a teacher and father of two. Calver, a swimming coach who had been fit and healthy before (see web page photo, above), suffered a blocked artery and a heart attack. His neighbor raced him to St. David’s Medical Center in Austin, where he was treated, recovered, and was released.
Calver’s insurance paid the hospital $56,000 for his four-day stay and treatment.
The hospital decided that was insufficient and launched a debt-collection onslaught against the teacher for an additional $108,951, a sum he says is roughly twice his annual take-home pay. Calver was distraught, fearing he and his wife would be bankrupted and wouldn’t be able to cover necessities for their kids.
Kaiser and Vox both have run consumer-friendly reports, examining excessive seeming bills and trying to help patients. These have included reporting on disputes over: an $18,000 trauma care charge for a vacationing Korean couple whose baby fell off a hotel bed but was deemed fine, and just given a clean diaper and a warm bottle of milk; a $1,500 prescription for to treat a case of toe nail fungus; a $15,000 charge for four tiny surgical screws used in a foot surgery; and $8,500 in costs for physical therapy for a hand injury.
Terhune’s story on Calver, published with National Public Radio, attracted nationwide attention, including in newspapers and other broadcast media, notably CBS TV News.
The hospital then backed down. It decided to settle with Calver for $332.39.
The head suit at St. David’s insisted in a tough-to-read memo to the hospital’s board that this case was difficult but correctly handled, and, maybe if there had been no news coverage, the institutions would have kept up its effort to collect its “customary and reasonable” $100K.
Hospital CEOs’ soaring pay
If the CEO appears tone-deaf, a new study out of Cleveland may help to explain executive haughtiness: Researchers blamed increasing health care costs on soaring compensation for hospital personnel — doctors, to a degree, but especially CEOs. Based on their study of 22 health systems between 2005 and 2015, researchers found that the average compensation for medical center CEOs surged 93 percent to $3.1 million during the period, a rate that far exceeded the 3 percent average increase in registered nurses’ pay.
In fact, nonclinical workers — like CEOs — accounted for more than one-quarter of the increase in wages paid to healthcare workers, which jumped from $663 billion in 2005 to $865 billion in 2015.
The study, published in a medical journal for orthopedists, said it is difficult to defend the nose-bleed pay for CEOs, both in the financial performance of institutions they head and the health outcomes those facilities produce. Doctors, who don’t exactly dwell in poverty, have taken to social media to bemoan not just the high CEO pay but also the giant gap it creates with wages paid to the numbers of key, direct caregivers like nurses. CEOS, the study found, make 44 times what nurses get paid on average. The docs have echoed each other in Tweets, saying something to the effect of which would you choose — several dozen more nurses on hospital units or just one more suit atop the med center C-suite?
Of course, public anger about medical costs and billing, as well as the fiscal legerdemain of health care executives, also may have been fueled by yet more disclosures about the setting of prices of common surgeries, as well as disputes about a government support program for poor patients that apparently isn’t being used as intended.
More guesstimates on joint-replacement pricing
Axios, an online news site, has added its reporting to the convoluted question of what hospitals charge for joint replacements, an issue recently dissected by the Wall Street Journal, based on an efficiency study in a Wisconsin health system and how it handles patients who get metal, plastic, or ceramic fixtures installed in their knees. Axios says it analyzed 2016 federal data to find:
More than nine out of 10 hospitals charge at least $30,000 for joint replacement surgery — one of the most common inpatient procedures — and one out of six hospitals charges $90,000 or more … . Hospitals set prices for any test or procedure at whatever level they want, often well above what Medicare pays. While those prices often aren’t what patients pay, they still help dictate what society at large pays for health care.
Hospitals bend intent of charity program
Indeed, besides “spit balling” costs for these government-covered procedures rather than basing them on facts or evidence, hospitals and their administrators also may be hitting up taxpayers like you and me by bending the intent of a multibillion-dollar government program charity program known as 340B.
As the New York Times explained of 340B:
[It] requires pharmaceutical manufacturers to sell drugs at steep discounts to certain hospitals serving larger proportions of low-income and vulnerable people, such as children or cancer patients. The participating hospitals may charge insurers and public programs like Medicare and Medicaid more for those drugs than they paid for them and keep the difference.
That isn’t exactly how it all has worked out, though, the newspaper explained:
By one estimate, the program saved hospitals $6 billion in 2015 alone. The original intent of the program, enacted in 1992, was for hospitals to use the revenue to provide more low-income patients a broader range of services. Many institutions that serve mostly low-income and uninsured populations say they need the program. … But there is concern that 340B has come to include hospitals that don’t need the extra help and are not using its windfall as originally intended. The program has grown considerably, most recently as a result of an expansion included in the Affordable Care Act. As of 2004, about 200 hospitals benefited from the 340B program; by 2015, over 1,000 were participating. The program now encompasses 40 percent of all hospitals and an even larger number of hospital-affiliated clinics and pharmacies.
Austin Frackt, a physician, health care researcher, and a professor at Boston University’s School of Public Health, runs through the evidence-based New York Times “Upshot” column a raft of studies on 340B, reporting:
[A] study in [the medical journal] Health Affairs found that 340B hospitals have increasingly expanded into more affluent communities with higher rates of insurance. The 340B program may have also inadvertently raised costs — for example, by encouraging care in 340B-eligible hospitals that could have been provided less expensively elsewhere. A study in Health Services Research found that hospital participation in 340B is associated with a shift of cancer care from lower-cost physician offices to higher-cost hospital settings. The program may also encourage providers to use more expensive drugs. The more hospitals can charge insurers and public programs for a drug — relative to how much they have to pay for it under the program — the greater the revenue they receive. They also receive more revenue when the drugs are prescribed more often.
Big Pharma and big hospitals, with government regulators falling somewhere in between, are battling over 340B and the amount that should go into it, maybe even its continued existence, Frackt says. But what of patients?
In my practice, I see the harms that patients suffer while seeking medical services, and their struggles to access and afford safe, effective, and even excellent medical care, especially as they’re sick or injured and they and their families thrash their way through the bureaucrat thicket surrounding medical bills that can ruin their finances. Just think how much greater the support and use of the American medical system might be if the energies now devoted to sending profits ever skyward, instead, were dedicated even a fraction to improving patient care and its outcomes.
It’s terrific that news organizations like Kaiser Health News, Vox, NPR, the New York Times, and many others act as watchdogs and hold medical practitioners and institutions accountable, especially for their dodgy financial practices. But as Kaiser has acknowledged in its follow-up to teacher Calver’s harrowing experience, there aren’t enough hours in the day or reporters on any media organization’s staff to deal with extreme and incomprehensible medical bills, whether with out-of-network charges, concerns about deductibles, doubts about balance billing, just the flurry of confusing documents flying back and forth, or you name the practices that make patients all but weep.
Indeed, as the Kaiser news service reported, patient Calver turned up yet another questionable medical billing case just by talking about his experiences with a colleague in his workplace.
What does it say about medical care in this great country, the wealthiest in the world, when 1 in 3 of thousands of campaigns launched each year on a major online site that promotes “crowd funding” for an array of causes, seeks to assist patients in dire need to pay for treatment needed for illness or injury?
Elisabeth Rosenthal is a physician, a former New York Times health and medical writer, and the author of “An American Sickness: How Healthcare became Big Business and How You Can Take It Back,” a book that takes a deep dive into modern medicine’s confounding economics. She also leads the Kaiser News service and has pushed her staff to tackle the infuriating “Bill of the Month” cases.
Rosenthal counsels patients that they need to gird themselves in their every experience with the health care system to fight for their rights and to demand explanations so they don’t get gouged or ripped off. That’s an excellent prescription, pathetic though it may be in how telling it can be about the state of relations among doctors, hospitals and the people they’re supposed to hold highest in their sights and care — us, they’re patients. Something needs a lot of healing, stat.