Hospital Billing And Regulation

[eric von kruse]

I must first say that I am a staunch laissez-faire capitalist. A couple of years ago my wife needed to go to the hospital while we were on vacation in Las Vegas. She was stabilized, we finished the vacation and went home. The bill was outsourced, as is typical, and we recieved a bottom line dollar amount. Our insurance covers certain aspects of hospital cost and we are required to pay the rest. Because the amount was not itemized it was impossible to determine what the insurance should cover. After months of repeated requests to the hospital and the billing company for a breakdown, they would still not provide it and finally we paid the full amount ourselves but not before it showed up on our credit rating.

I do not agree with government regulations (forcing the hospital to itemize the bills) but how else could one be protected from such unethical practices. Furthermore, hospital transactions are much different from going to a retail store and agreeing on a price for a product and making an exchange - essentially, in a hospital, you are giving a blank check without any justification for cost (even after the fact).

Eric Von Kruse

[Proverb]

hospital transactions are much different from going to a retail store and agreeing on a price for a product and making an exchange

I'm assuming you are talking 'ought' not 'is.' In that case I would have to disagree with you. A hospital is a service. The content of the service you get at a hospital can and often does change with every minute. Unless you don't mind getting a non-itemized bills and crapy service, the only way to protect yourself would be to go to a hospital that had terms of service handed to every patient. Which, because of that demand, would be a common service at hospitals in a free economy.

Your only writing a blank check in today's economy because the whole process is based around milking insurance companies for all their worth, which is a consequence of government involvement in that aspect of the economy.

[softwareNerd]

The US healthcare system is shaped in so many ways by government regulations. Often government influence gives some players advantages that they would not have in a private system. Instead of winding back the advantage, the government then intervenes with a law to control the advantage. Any rules insisting that hospitals itemize bills would be a very tiny part of that mosaic. It may well be true that if that a rule like that would prevent an unethical hospital from using some government-granted advantage.

To summarize, it may be right to say that Control-A would be palatable if Control-B was in place to counter it; but the real answer is to unwind the first one.

As you've described the events, it certainly sounds like this hospital did not deserve to be paid until they gave more information. The ace up their sleeve was your credit-rating. I hope you did not pay them all they asked for.

[eric von kruse]

I understand that my premise is assuming the hospitals as they are currently, which is not regulation free, and therefore not directly comparable to an unregulated health industry. But are you suggesting that unjustified billing is caused by government regulation? What is that argument substantiated upon?

I am partially playing devils advocate to understand the greater principle. It's hard for me to imagine that hospitals would not participate in billing like many taxi cab services did in major cities before prices were mandated (although I am apposed to this). The difference is that when life is at stake you don't have time to research billing practices of all the local hospitals - you pick the closest one.

[Lemuel]

Just out of curiosity, did you consider the option of suing the hospital for an itemized bill?

Granted, you've already paid it, so there's no leverage at this point. (And I don't blame you - who wants that kind of dispute to mess up their credit rating?)

But say you were still holding out. In the absence of a law requiring itemized billing, would not the appropriate private action would be to take the hospital to court, sue for: the itemized bill, a court order restraining them from reporting the overdue bill to the credit bureau, and compensation for legal expenses? I don't think the hospital would just roll over and print the bill out at the mere suggestion of a lawsuit, but a lawyer delivering the papers - coupled with a submission of the story to local media outlets - might put some pressure on them ...

[davidmsc]

Been in the healthcare industry for 19 years, got my graduate degree in healthcare administration about 4 years ago, and I can tell you that it is completely f**cked up. Not the doctors, or nurses, or technicians, or administrators -- it's the regulation and bureaucracy and government intrusion that has caused healthcare *as an industry* to become so warped and expensive.

Less than two years left, and then I'm out -- gotta find something more "liberating" to do with my life.

[JMeganSnow]

I understand that my premise is assuming the hospitals as they are currently, which is not regulation free, and therefore not directly comparable to an unregulated health industry. But are you suggesting that unjustified billing is caused by government regulation? What is that argument substantiated upon?

"Not regulation-free?" Geez, that's the understatement of the year. Medical practicioners (especially hospitals) are so hounded by regulations, restrictions, and the like that they essentially don't have any choice but to bill as much as they can while they can.

What sort of insurance do you have? If you belong to an HMO, they may get paid by the diagnosis, not by the treatment. It's entirely possible that the hospital doesn't take your particular insurance at all.

Health care is a mess. I have health insurance strictly for life-threatening emergencies.

[softwareNerd]

... like many taxi cab services did in major cities before prices were mandated (although I am apposed to this). The difference is that when life is at stake you don't have time to research billing practices of all the local hospitals - you pick the closest one.

It's always hazardous to speculate what would happen in a free-economy, in great detail. However, in general, one way to handle a true emergency is pre-negotiation of some sort. A hospital may offer coverage on some terms. Presumably, one would have to pay something for the option, making it a form of insurance, or like a car warranty plan. Some form of health insurance and pre-negotiation would make sense for exceptionally high-cost hospital emergencies.

How do regulations lead to un-itemized bills? As some posters said, the whole system is so corrupted that individual players are focussed on what they can get away with, how they can make you pay for someone else's treatment, and so on. Each "player" feels justified in skinning the others because they see the systme squeezing them. Everyone feels persecuted; and most are.

[Qwertz]

Medicare (US Federally funded health insurance for eligible parties, primarily the elderly and disabled) pays between $0.27 and $0.31 for every $1.00 legitimately billed. There is no recourse whatsoever for providers to collect the balance. Medicare is the single largest payor of health care costs in the US. Private insurance companies are permitted by law to not provide any more extensive coverage than Medicare, so they can get away with paying on average between $0.31 and $0.38 on the dollar billed. Even if a particular procedure is covered, Medicare and private insurance will often only pay a third of the billed cost. The provider may not bill the balance to the patient, because the law considers this "double billing" and falls under the crime of "medicare fraud." Health care providers may not discuss their prices with one another. Health care providers are required by law to provide certain services regardless of a patient's ability (or willingness) to pay for those services. Doctors are required by law to waste literally hundreds of hours a month doing their own billing; they cannot have a billing secretary or an accountant place any mark whatsoever on a Medicare billing form, on pain of prison.

Though it doesn't excuse unscrupulous behavior, I can understand a hospital's refusal to provide an itemized bill (as an example). Without an itemized bill, they cannot bill insurance or Medicare, so the legal recourses for collection from the patient remain open to them. The hospital can get what they bill this way, and try to offset 500 non-paying patients with one paying one. The only hospitals in the US operating in the black are private hospitals with no emergency services who do not accept health insurance. Hospitals which provide life-saving services (and are thereby required to do so regardless of whether or not they can collect on those services) are deep in the red, and must accept government subsidies (and thereby subject themselves to even further regulation) just to keep operating - just to keep saving people's lives. Life-saving healthcare in the US is literally supported solely by the willingness of doctors to immolate themselves before the altar of "patients' rights." For many, it's not even that they enjoy their work any more, but that they have to recoup the extraordinary costs, both in time and money, they wasted on becoming educated and skilled enough to be enslaved by the government. If you get a life-threatening illness in this country, your life is, in a very real sense, at the mercy of the whim of the state, even if you have private insurance. The only way for you and your doctor to take control of the situation is to pay out of pocket at a private hospital.

The welfare state fanatics are always shouting that only the fabulously wealthy can afford decent health care in America: they're right. But their solution is more regulation of an industry which is already strangled by government interference. Every doctor tries to do his very best for each patient, but when he has to ask a bureaucrat for permission to run an expensive test on a patient who clearly needs it and which the patient's insurance will clearly not cover... A test whose price tag is artificially inflated to try to compensate for non-payment... It's super-concentrated wealth redistribution, and it's uglier that hell. Doctors hate it. Hospital administrators hate it. Nurses and lab-techs and everyone else who works in health care hates it. The only reason the hospitals are still open is because all these people are willing to accept their slavery.

Don't let's get me started on malpractice insurance.

-Q