I have been a physician for35 years. The vast majority of my practice has been in the non-profit setting, where I have had the privilege of treating patients regardless of ability to pay. I used to be able to remain blissfully ignorant of what insurance my patients had; I didn’t want it to influence my treatment recommendations. Insurance companies took that luxury away, demanding not only that we are aware of which company and plan, but also that we beg permission (known as prior authorization) to do anything.
We now have – roughly – three main groups of patients: those with insurance (with varying degrees of co-pay); the truly indigent without coverage or resources; and those stuck in the middle. I say stuck in the middle, because the insured are pretty much assured of getting treatment (though sometimes not at the facility they desire). They may have a high deductible health plan (HDHP) that puts them in credit card debt (or worse), but they do have access to the healthcare system. The truly indigent can apply for charity care and also access the system, although without knowledgeable and aggressive social work support, this can be a difficult process (not to mention any associated delay in care). The patients who get hit the worst by our complicated healthcare coding and billing system, in my experience, are the working, uninsured poor. They do not have insurance, are not old enough to get Medicare, and have too much income to qualify for charity.
Why is this an especially difficult position to be in? To grasp the complexity of the problem, one has to understand that what a facility or provider charges for a service is not in any way related to either the true value of that service or what an appropriate payment for that service is. Let me give you one small example of the disconnect between charges, adjustments, and payments.
I treat many patients with prostate cancer. Once they complete their course of treatment, they come back for follow up visits and to have their PSA (prostate specific antigen) blood test drawn to monitor response to treatment. At the most basic level, that follow up visit consists of two things: blood work and seeing me for results. My standard Medicare reimbursement (the standard for comparison) for a level 3 (average) follow up visit is $88.65. The cash price to have a PSA test at CHI’s Express Lab on West Frank Ave across from the hospital is $35. Together, that comes to $123.65.
Within a healthcare system, however, the hospital’s chargemaster, which is akin to MSRP in the car buying market – takes over. The chargemaster details a code and price for every component of a healthcare interaction. Each of those codes is assigned a massively-inflated price – historically a multiplier of Medicare reimbursement designed to make up from private insurers for the low and unsustainable reimbursement from the government for Medicare patients. For example, the same PSA run by the same personnel on the same equipment that costs $35 cash across the street from CHI has a “price” of $512. And though the needle stick (venipuncture) cost is rolled into the cash price across the street, it is assigned a “price” of $55.10 if done in my hospital-based clinic. Finally, that follow up visit, which Medicare says is worth $88.65, has a ghost price of $387 identified as a room charge, despite the fact that the hospital does not bill for follow up visits. Bottom line, what costs the patient (or his insurance) $123.65 is being billed out at $954.10.
Back to the broad categories of patients, those with insurance have the inflated price/charges adjusted based on negotiated contracts. For the patient above in question, his BCBS HMO negotiated that the PSA was worth $61.05, paid $48.65 (80%), and required the patient to pay $12.20, his 20% copay. The room charge was zeroed out. (My fee, billed separately, would be paid in a similar 80/20 fashion.) If this patient had not had insurance and could not qualify for charity care, he would be saddled with the full and entirely ridiculous $954.10 hospital bill, even though the true value is sixty one bucks.
Let me be clear: this is not unique to CHI; this is a systemic problem of the US healthcare system. NPR (National Public Radio) has a series they are doing with Kaiser Health News, Bill of the Month, where they look at real-life surprising medical bills and how the system is failing patients.[1] I can think of no other area where a customer buys a product – often on an urgent basis – without knowing what the cost is going to be. When that product includes ER visits, cancer treatment, major surgery, etc., the financial toxicity can be devastating.
I previously shared[2] data that up to 85% of cancer patients leave the workforce during their initial treatment, and more than 50% of cancer patients at some point experience bankruptcy, house repossession, loss of independence, and breakdowns in their relationships and that 42% of cancer patients deplete their life savings within 2 years of diagnosis, as published by Adrienne Gilligan, PhD, in the American Journal of Medicine.[3] Even within a broken system, there are some workarounds. Most patients don’t know that they can negotiate for lower medical bills[4] or use programs like MDSave to shop for procedures at discount rates.[5] However helpful, these solutions don’t fix a broken system that is bankrupting an astounding number of patients.
We need to revamp the entire healthcare pricing/billing/coding system on one hand and increase access to adequate insurance coverage and/or indigent care on the other. Compassion demands it. No patient should be forced to spin the healthcare Wheel of Fortune only to end up bankrupt.
[1] https://www.npr.org/series/651784144/bill-of-the-month
[2] https://drsidroberts.substack.com/p/the-financial-burden-of-cancer-care-19-01-13
[3] https://doi.org/10.1016/j.amjmed.2018.05.020
[4] https://khn.org/news/article/an-arm-and-a-leg-how-to-negotiate-for-lower-medical-bills/
