Health Insurance is no Guarantee

It sure doesn’t pay to get sick these days, even if you’ve got health insurance.
During a recent visit from Florida, my mother-in-law shared a story that has become all too familiar to many Americans: a whopper of a medical bill that results in a personal financial disaster.
After eight years of increasing, chronic back pain, she endured an 18-hour operation and four days upside down in a sling in the hospital.
The hospital bill came to $190,000. Fortunately, that was covered.
Her doctor’s bill came to $38,000 and change. That’s how much Blue Cross/Blue Shield would have been billed, but like many physicians across the country, her surgeon doesn’t accept BC/BS because of the hassles and slow payments involved, so she had to negotiate a settlement with the company on her own.
But apparently, some insurers reimburse much less to patients than they do to doctors.
She said her insurer would only reimburse her $7,000 of the $38,000 it would have paid the surgeon. Fortunately, she was able to negotiate the doctor’s bill down to about $20,000, in part as a professional courtesy, since she’s a retired nurse. But that left her with $13,000 to pay out-of-pocket, even with health insurance.
For a retiree, coming up with $13,000 on a fixed income is no small matter.
You hear a lot of similar stories these days. God help you if you don’t have insurance, because that’s about the only help you’re going to get.
The Sept. 21 issue of the Wall Street Journal told the story of a couple who gambled on not having health insurance. They lost.
Paul Shipman, 43, lost his job as a furniture salesman and couldn’t afford health insurance. Unfortunately, he suffered a suspected heart attack. Doctors at a hospital in Fairfax, Virginia gave him a cardiac catheterization and a new stent to open a blocked artery.
But he also got a bill of $29,500 for a 21-hour stay in the hospital, along with a $7,000 bill from the physician and a $1,000 ambulance ride. He and his wife now have medical bills of $40,000 to pay off, and still no health insurance.
Like my mother-in-law, the Shipmans found that there are two standards for payment in America. If Medicaid had been paying their bill, the hospital would have gotten $6,000 instead of the $29,500 the Shipmans were socked with.
Needless to say, money is of little concern when you’re living on a knife’s edge of pain for years at a time, or wondering if you’re going to be alive in the next few minutes from a heart attack.
And of course, it’s dreadfully expensive to staff and run a hospital, provide for all of the new technology and therapies, complete your medical education and the like.
But it sure seems like there should be more consistency in what people are being charged for health care.
If your physician won’t deal with your health insurer, then why should you get the shaft? And if you’re uninsured, why should you pay far more than what an insurance company or the government is billed?
As the Wall Street Journal notes, “The U.S. hospital pricing system is ‘a Persian rug market of negotiations,’ where providers, suppliers and insurers cut their own deals and only the uninsured pay full fair.”
You’d think it would be a simple matter to get a congressional committee together with a panel of physicians, health insurers and hospital administrators and declare a single, consistent, across-the-board payment for each specific treatment.
Hah!
Unfortunately, as First Lady Hillary Clinton learned in her failed attempt to reform health care in 1992-‘93, there is nothing simple about reimbursement. There are different reimbursements for urban care as opposed to rural care; for which diagnosis takes precedence in what is often a multi-system health problem; and for who’s paying the bill, among many other factors. It’s a set-up for a madhouse on par with the U.S. Tax Code, with government and insurers able to tighten the purse strings at whim while hospitals and physicans are expected to provide the best care to the nth degree, cost be damned.
Where will it end? In the presidential election of 2008, probably, when the major political parties will have to nationalize health care, no matter what ideology they profess.
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