Healthcare executives like to talk about transparency, but what efforts are made to ensure that very sick patients understand that payment schemes involving out-of-network physicians and services could add tens of thousands of dollars to their out-of-pocket expenses?
The Kaiser Family Foundation published a study this year which found that one in three Americans has difficulty paying for medical debts. KFF data further shows that 70% of people with medical debt are insured, and that people with employer-sponsored coverage represent 54% of medical debt cases.
In other words, responsible working people who are trying to provide health insurance coverage for themselves and their families and to protect their assets still face a likelihood of incurring life-altering medical debt if they get sick.
One reason for this is because most healthcare consumers are not experienced or sophisticated enough to protect themselves when they come into contact with the complicated, labyrinthine payment schemes designed by physicians and hospitals to extract money.
Case in point: The New York Times and the Tampa Bay Times recently detailed the practices of "drive-by doctoring" and balance billing—schemes that have been around for a while, but which have found new enthusiasts among providers as reimbursements shrink. The cases highlighted in the two newspapers are galling and brazen and indefensible.
There are common themes that run like this: An insured patient has a medical emergency that requires her to go to the hospital, arriving at the emergency department in great pain and duress. Fortunately, the hospital is in her network.
Unfortunately, and probably unbeknownst to the patient, the emergency physician, the hospitalist, the anesthesiologist and the rehab bed are contract hires who don't accept her insurance plan.
Healthcare executives like to talk about transparency, but what efforts are made to ensure that a frightened and injured patient understands that these out-of-network physicians and services could add tens of thousands of dollars to her out-of-pocket expenses?
And frankly, even if the patient knew this, what could she do about it while strapped to a gurney with a tube sticking out of her throat? What alternatives does she have?
Is there any other industry where that sort of business practice is allowed, or even legal? Imagine, for example, buying a house and learning after the fact that an appraiser you never met was hired without your knowledge or permission for a service you didn't ask for, and then sent you a bill for $10,000, and threatened to dun your wages and ruin your credit if you didn't pay. By this measure the home loan industry is a paragon of virtue when compared to the billing shenanigans practiced by some hospitals and physicians.
"It does happen all the time and people do get caught by it," says Karen Pollitz, a senior researcher with the Kaiser Family Foundation. "I don't know why it's showing [up in the media] now like we just discovered it. This isn't a new problem. But it does surprise people when it happens to them and as we found in some of our case studies in our medical debt report, this can bankrupt people. In one extreme example, one family lost their house."
Pollitz recalls speaking to one woman who was told that her seriously ill husband would be moved to a rehab bed within the hospital that was managed by an out-of-network provider.
"The wife was told, but what was she going to do? He's got a PICC line. He is barely breathing. He can't be discharged," Pollitz says. "They said 'we can't really move him anywhere but to the next floor' so she said 'OK." What was she going to say? 'No. I'm going to shop around. Just leave him in the elevator while I look.'"
We shouldn't lay blame on any one group, because there's plenty of blame to go around. And the response from providers and payers is to point the finger at one another. Do physicians and administrators making solid six-figure incomes stop to consider how these questionable billing practices have the potential to bankrupt their patients, most of whom reside in far lower tax brackets?
The median household income in the United States this year was $53,800, which is 4.8% lower than it was at the start of the Great Recession in 2007. One of the biggest reasons for wage stagnation is the rising cost of health insurance.
Everyone in the healthcare industry must understand the potential for blowback when a sizeable number of patients come to believe they've been fleeced by people they thought they could trust. Using social media patients can organize quickly, compare notes, and identify perpetrators. Patients have compelling cases and legitimate complaints that resonate with the larger public.
It's probably naïve to think that payers and providers can resolve this amongst themselves. This will require government. The Tampa Bay Times notes that the Patient Protection and Affordable Care Act offers some protections against insurance companies charging patients more for out-of-network emergency care, but it does nothing to address drive-by doctoring and balance billing by hospitals and physicians. Mandatory annual caps of out-of-pocket expenses are only for network care.
There are hodge-podge laws in several states that mitigate the expenses. New York State is considering a bill (Section H, page 160) that provides protections against billing schemes leveled at emergency medicine patients. They need to make it law.
Someone has to stand up for the consumers who are stuck with the tab for a dysfunctional relationship between payers and providers.
John Commins is the news editor for HealthLeaders.