The medical and health policy blogs have already taken note of the latest study purporting to show that uninsured patients are being overcharged by hospitals. The political blogs won’t be far behind. There are two crucial and unassailable facts that must be absorbed in order to decode this “study” and the “news” articles it has spawned:
Fact # 1: Hospitals do not have separate price lists for patients based on insurance coverage or lack thereof.
Fact # 2: Most hospitals write off about 90% of the charges generated by uninsured patients.
Regarding the first fact, all hospitals bill their patients based on a single “charge master.” When a patient comes in, her account is charged according to the service rendered without regard to insurance. Thus, if an uninsured patient needs an appendectomy, she is charged exactly what she would be charged if she had Medicare, Blue Cross, Aetna, Medicaid, or any combination of these.
The Health Affairs “study” is deliberately misleading. It is actually about discounts rather than charges. When, for example, a Medicaid patient has an appendectomy, the hospital is paid a fixed rate based on a DRG. This rate averages about 25% of charges, and the hospital is required (by law) to write off the balance. The “study” disingenuously compares this 25% discounted payment to the total charges applied to the account on an uninsured patient.
Which brings us to crucial fact number two: in most cases the charges for uninsured patients are mere exercises in bookkeeping—because very few of these patients ever pay anything at all. The Health Affairs “study” and related articles insinuate that uninsured patients are paying far more than insured patients for the same services. In fact, hospitals end up writing off most uninsured care to charity or bad debt. Hospitals receive an average of about ten cents on a dollar for uninsured care.
So, why do we keep seeing media reports claiming the uninsured are charged more? To put it bluntly, these articles emanate from ignorance and dishonesty. The journalists reporting on this issue, being too lazy to learn the facts, are ignorant. The “experts” who produce these “studies” are engaged in a deliberately misleading propaganda campaign whose goal is the imposition of socialized medicine on the country.
Comments 8
Because it’s true?
I’m sure insurers put up with being charged $100 for a liter of normal saline, $47 for a vial of sublimaze, and $38 for IV promethazine.
What insurers are charged versus what patients are charged are COMPLETELY different.
Posted 10 May 2007 at 10:29 am ¶Nope. It’s “one price fits all” in the hospital biz. Moreover, no one actually pays the “list” price, including the uninsured. The self-pay patients who actually pay usually take advantage of our “prompt-pay” discount (exceeding 50%) or use our installment plan.
Posted 10 May 2007 at 10:53 am ¶It is not BS. If you have a PPO or HMO, then you are being charged pre-negotiated rates. This is certainly true for medicare patients! If you do not have the power of an insurance company or the government negotiating rates, you pay more.
To say the article about the uninsured getting charged more is BS is BS. By the way, I am a licensed insurance agent.
Posted 10 May 2007 at 12:13 pm ¶Most uninsured patients get a 100% discount. Others get large (50%) discounts for paying promptly (as most insurance companies do). Still others get no-interest installment plans for as little as ten bucks a month. It is a myth that hospitals are cleaning up on the uninsured.
Posted 10 May 2007 at 1:27 pm ¶I keep hearing about how the uninsured don’t pay. does that mean i will be better off going to a hospital without health insurance or ID to get care? Why pay for something i can have for free? Something must be wrong with this picture, i can’t imagine the hospital not trying to bill me or collect. How do these people get free care?
Posted 10 May 2007 at 3:44 pm ¶John,
The people getting a 100% write off are coming in through the ER. Because of EMTALA, everyone coming in the door of the ER gets treated. As for why hospitals aren’t hyper agressive about pursuing billing in this area, I can think of two factors at my own hospital:
1) The people coming in through our ER could never pay the bill to begin with. I mean what are you possibly going to get from the guy who walked over from the homeless shelter down the street?
2) We get money for indigent patients from the state ‘free care pool’ which insulates us from a lot of the cost of ER cases. If the state will pick up the tab, it is often more feasible to provide ‘free’ care and accept the state subsidy than to try and collect even a small fraction of the true bill from a patient who has no real prospect of paying.
Posted 10 May 2007 at 6:22 pm ¶John, as Chaudhari says, EMTALA requires that (if you show up in our ER) you receive treatment whether you can pay or not. In fact, most hospitals don’t even ask ER patients about insurance until after they have been triaged. And many of the 47 million uninsured you keep hearing about in the media have deliberately stopped carrying insurance because of EMTALA.
Posted 10 May 2007 at 9:15 pm ¶What about the insured? They are actually overcharged because they have health insurance and the care provider takes advantage of this, robbing the insurance company and still leaving a large chunk for the consumer to pay. A person is better off going in stating they have no insurance and then turning the bill into the insurance company and having a smaller portion left to pay. When I see my insurance company not paying a portion because they say it is above and beyond customary, they are saying it is an overcharge. I’ve proven this in my case after a car accident.
Posted 25 Oct 2007 at 5:40 am ¶Post a Comment