There is no shortage of hospital billing horror stories circulating in the U.S. culture, with many websites, social media accounts, and other media outlets exclusively devoted to these infuriating tales. Both are, like so many things related to healthcare, a uniquely American phenomenon. We will share a story ourselves, in this blog entry and delve into the possible causes.
$700.00 vs. the price of a cup of coffee (1)
While taking a remotely taught chemistry class, college student Claire Lang-Ree started experiencing intense lower abdomen pain. Her mom, a nurse practitioner, was worried it was appendicitis and found a nearby hospital in the family’s health insurance network. After waiting in the emergency room for quite some time, Claire eventually received morphine, an anti-nausea medication delivered through an IV, along with undergoing a CT scan of her abdomen and a series of tests. If it can be categorized as such, the good news was that Claire’s pain came from a ruptured ovarian cyst. These can be a harmless part of the menstrual cycle, but they also can be problematic and painful, as in her case. After a few days, her pain went away. The bad news arrived in the form of the hospital bill: $18,735.93, including two $722.50 fees that were for a nurse to send drugs into her IV, a process that takes seconds. The insurer’s negotiated amount owed came to $6,999 for her entire visit.
The intriguing and surprising things, aside from the overall cost, are the comparative prices dependent on the setting and delivery of care. For example, some of those “push fees” were incurred when the nurse sent an anti-nausea drug, Ondansetron (2), through the IV. Claire had previously taken the tablet form of the medication, which is approximately the price of a cup of coffee. The question she has is why that wasn’t offered that option. Another example is that when performed in an emergency room, CT scans are frequently many times more expensive than in other settings. That scan accounted for $9,885.73 of the total before the insurer’s negotiated charges.
These two line items, one representing the form a medication takes and the other where a procedure is performed, are part of the nonsensical discrepancies found in current medical billing. The other thing worth noting is the trend of “disaggregation.” This term refers to when a product or service is no longer grouped into an overall charge. The practice is now common in the hospitality industry. An in-room refrigerator with drinks and snacks is now considered a profit center. In some cases, even opening the fridge can incur a charge. Airlines do it too with each additional checked bag or requested amenity. Hospitals have learned this lesson well, and in healthcare, this practice, known as unbundling, can generate additional and considerable revenue. Even every aspirin delivered represents a new fee, with care being broken down into increasing smaller components – and charges to the insured.
What can be done?
First, know what and where to expect higher charges, especially since healthcare has some of the least transparent pricing of any sector of the economy. According to the U.S. Bureau of Labor Statistics data, a report from National Nurses United found that hospital markups have more than doubled since 1999.(3) Also, remember the “captive audience” idea: whether you are on a plane, hotel room, a movie theater, a theme park, and especially a hospital, the price of things will be multiple times more than in other settings. A hospital patient, as in the other examples, has fewer choices than outside of these venues.
The key here is to not reflexively utilize a service or product without considering that a charge, and sometimes a considerable one, will be incurred. Obviously, this might not always be possible in a hospital setting, but try to remember that fact whenever possible. Remember that there are also less expensive places that this care could be available, such as a doctor’s office, imaging site or outpatient center.
Another counterintuitive fact: in the final analysis, insurers are not your staunch allies. Sure, they (usually) cover a large percentage of claims. However, insurance companies do not have the negotiating power that most consumers assume. More importantly, insurers may not even negotiate as aggressively as they can, since ultimately, they profit more with higher claims.
Arm yourself with data, in addition to remembering those previously mentioned guidelines. Ask for the itemized bill from the service provider, especially when fighting a charge. It is also a good idea to request an itemized explanation of benefits from the insurance company too, which will explain what the service provider actually received for each procedure. You can even find out if you were overcharged. There is something called the Medicare price lookup tool, which can help establish a benchmark, and publicly available data on health claims in at least eighteen states can assist too. (4,5)
In the final analysis, being an educated consumer is your best protection against excessive hospital charges.
A follow-up visit
Claire, the patient in our example, has seen related pain return on a few occasions, albeit less severe, and pointedly avoiding another trip to the hospital. She ended up paying $1,420.25, which mainly was coinsurance, after intensely working on getting it to that number. Ultimately Claire and her nurse practitionermother relented, fearing a damaged credit score if the issue drug out any further. She recommended to others facing similar charges to try and actually enjoy the process, thinking of it as hunting for savings and fighting the costs.