Who’s Profiting From Your Outrageous Medical Bills?
The
same people who should be fixing them.
Ms.
Rosenthal, a journalist and physician, is a contributing opinion writer.
·
Feb. 14, 2020, 5:00 a.m. ET
Every politician condemns the
phenomenon of “surprise” medical bills. This week, two committees in the House
are marking up new surprise billing legislation.
One of the few policy proposals President Trump brought up in this week’s State
of the Union address was his 2019 executive order targeting them. In the
Democratic debates, candidates have railed against such medical bills, and
during commercial breaks, back-to-back ads from groups representing doctors and
insurers proclaimed how much the health care sector also abhors this uniquely
American form of patient extortion.
Patients, of course, hate surprise
bills most of all. Here’s a typical scenario: A patient having a heart attack
is taken by ambulance to the nearest hospital, and gets hit with a bill of over
$100,000 because that hospital wasn’t in his insurance network. A patient
selects an in-network provider for a minor procedure, like a colonoscopy, only
to be billed thousands for the out-of-network anesthesiologist and pathologist
who participated.
And yet, no one with authority in
Washington has done much of anything about it.
Here’s why: Major sectors of the health
industry have helped to invent this toxic phenomenon, and none of them want to
solve it if means their particular income stream takes a hit. And they have
allies in the capital.
That’s
explains why President Trump’s executive
order, issued last year, hasn’t resulted in real change. Why
bipartisan congressional legislation supported by both the House
Energy and Commerce Committee and the Senate Health Committee to
shield Americans from surprise medical bills, has gone nowhere. And why
surprise billing provisions were left out of the end-of-year spending bill in
December, which did include major tax relief for many parts of the health care
industry.
Surprise bills are just the latest
weapons in a decades-long war between the players in the health care industry
over who gets to keep the fortunes generated each year
from patient illness — $3.6 trillion in 2018.
Here’s how they came to be:
Forty years ago, when many insurers
were nonprofit entities, and being a doctor wasn’t seen as a particularly good
entree into the 1 percent, billed rates were far lower than they are today, and
insurers mostly just paid them. Premiums were low or paid by an employer.
Patients paid little or nothing in co-payments or deductibles.
That’s when a more entrepreneurial
streak kicked in. Think about the opportunities: If someone is paying you
whatever you ask, why not ask for more?
Commercial insurers as well as Blue
Cross Blue Shield Plans, some of which had converted to for-profit status by
2000, began to push back on escalating fees from providers, demanding
discounts.
Hospitals
and doctors argued about who got to keep different streams of revenue they were
paid. Doctors began to form their own companies and built their own outpatient
surgery centers to capture payments for themselves.
So today your hospital and doctor and
insurer — all claiming to coordinate care for your health — are often in a
three-way competition for your money.
As the battle for revenue has heated
up, each side has added new weapons to capture more: Hospitals added facility
fees and infusion charges. Insurers levied ever-rising copayments and
deductibles. Most important they limited the networks of providers to those
that would accept the rates they were willing to pay.
Surprise bills are the latest tactic:
When providers decided that an insurer’s contracted payment offerings were too
meager, they stopped participating in the insurer’s network; either they walked
away or the insurer left them out. In some cases, physicians decided not to
participate in any networks at all. That way, they could charge whatever they
wanted when they got involved in patient care and bill the patient directly.
For their part, insurers didn’t really care if those practitioners demanding
more money left.
And, for a time, all sides were basically
fine with this arrangement.
But as the scope and the scale of
surprise bills has grown in the past five years, more people have experienced
these costly, unpleasant surprises. With accumulating bad publicity, they have
became impossible to ignore. It was hard to defend a patient stuck with over
$500,000 in surprise bills for 14 weeks of dialysis. Or
the $10,000 bill from the out-of-network pediatrician who tends to newborns in
intensive care. How about the counties where no ambulance companies
participated in insurance, so every ambulance ride costs hundreds, or even
thousands of dollars?
These practices are an obvious outrage.
But no one in the health care sector wants to unilaterally make the type of big
concessions that would change them. Insurers want to pay a fixed rate. Doctors
and hospitals prefer what they call “baseball- style arbitration,” where a
reasonable charge is determined by mediation. Both camps have lined up
sympathetic politicians for their point of view.
So, nothing has changed at the federal
level, even though it’s hard to imagine another issue for which there is such
widespread consensus. Two-thirds of Americans say
they are worried about being able to afford an unexpected medical bill — more
than any other household expense. Nearly eight in 10 Americans say
they want federal legislation to protect patients against surprise bills.
States
are passing their own surprise billing laws, though they lack power since much
of insurance is regulated at a national level.
Now,
members of Congress have yet another chance to tackle this obvious injustice.
Will they listen to hospitals, doctors, insurers? Or, in this election year,
will they finally heed their voter-patients?
Elisabeth Rosenthal, a former New York Times
correspondent, is the editor in chief of Kaiser Health News, the author of “An
American Sickness: How Healthcare Became Big Business and How You Can Take It
Back” and a contributing opinion writer.
