by Vignesh Subramanian, April 12, 2022
The headlines are the same every year, and have been so for the last half-century: U.S. Health Care Ranked Worst in the Developed World (TIME, 2014); US health spending twice other countries’ with worse results (Reuters, 2018); U.S. health-care system ranks last among 11 high-income countries (Washington Post, 2021). The United States spends more on health care expenditures – both as a proportion of its gross domestic product and on a per capita basis – than any other developed nation, with annual accelerated growth rates in health spending exceeding those of OECD counterparts (Tikkanen and Abrams, Schneider). It is increasingly being understood that the U.S.’s outlier status is the result of higher prices and cost barriers rather than comparatively greater service utilization, with higher payments to hospitals and physicians as well as administrative overheads largely driving the outsized differences in spending (Kurani and Cox). Exactly how egregious the bills sent to American patients can be, however, is hidden in the fine print – an abusive doctrine formulated by medical bureaucracies and providers alike to obscure the truth about how far they are willing to go for profit.
Among the most obvious and decried examples of deceptive charging practices by providers are the various forms of surprise billing that often follow already costly care. Patients who unknowingly receive treatment from physicians who are not in their insurance network are prime targets for additional charges that may amount to tens of thousands of dollars (Kliff and Sanger-Katz). These patients typically do not choose the treating doctors themselves and are not made aware in advance of their out-of-network statuses (usually because of the urgency of required treatment or the availability of specialized providers, as is the case with emergency care or complex surgeries); some may have even sought care at an in-network hospital or urgent care center, reasonably assuming that these facilities employed providers that were similarly covered by their insurance. Nevertheless, these patients end up faced with the prospect of their insurance company refusing to pay an out-of-network balance bill, while collection agencies abandon good-faith protocols as they move to seize debt (Weber). Surprise billing often involves high initial reimbursements demanded by providers, procedures intentionally being redirected to more expensive ‘affiliated’ or ‘consolidated’ sites, and separate facility fees being tacked on; it can also affect non-emergency routine or scheduled care, making the issue a common woe for patients who cannot ‘shop’ for more affordable provider options while under any degree of duress.
The contributions of such bills to soaring healthcare spending cannot be overstated, but represent just the tip of a larger iceberg of unnecessary and inexplicable costs to the average American patient. Surprise bills would not be possible if not for deliberate schemes characterized by so-called “chargemasters” – the comprehensive, hospital-specific compendiums of all services said hospitals may charge for – to keep the realized costs of care hidden until after delivery. Such measures work to withhold, clutter, or bury procedure price lists from or on hospitals’ public sites and web search queries, while selectively publishing ‘starting point’ and ‘prospective’ rates far below those used for Medicare reimbursements and private insurance payments with little basis in market transactions (McGinty). They quietly tuck arbitrarily applied fees, such as those for basic consultation, testing, and diagnostic procedures (e.g. blood draws) or for care that was ‘seriously considered’ or ‘activated’ but not ultimately provided (e.g. trauma response fees), into final bills without patient notification (Gold and Kliff). They enshrine refusals to bring sticker prices for the use of certain technologies (e.g. MRIs) or operative procedures (e.g. hip replacements) in line with those of lower-tier doctor’s offices or otherwise justify or address variation and make comparison feasible across emergency departments, trauma centers, and surgery centers in a given geographic area (Pflanzer). Hospital systems are even willing to charge patients for minimal labor costs (fees charged to new mothers who have just given birth for “skin-to-skin contact” with their newborns are an infamous example), for basic health products like over-the-counter pharmaceuticals, toiletries, and first aid supplies that cost far less at neighboring pharmacies, and for services supporting other parts of the continuum of care at exorbitant levels (e.g. transport services like ambulance rides, despite the fact that EMS crews themselves are not reimbursed for patients not transported to emergency rooms) (Earl, Reed). Collectively, these ‘grab-every-last-dollar’ tactics take gross advantage of the necessity of critical care to bleed American patients dry, making every step into treating facilities as financially punishing as possible while denying them even the fundamental privilege of foresight to predict the final bill.
In a legitimately free market – indeed, of the kind defenders of the U.S. healthcare model contend it is and must remain – the ‘consumer’ is assumed to be able to make choices of free will, with the most accurate information possible on the prices of the goods and services available to them. This premise holds that such informed decisions will in turn guarantee a higher quality of service provided, improving consumer satisfaction while reducing costs as providers compete in a ‘race to the bottom.’ Yet neither that transparency of information nor that freedom of choice are available for U.S. healthcare’s consumer, the American patient. Deliberate and disingenuous attempts by hospital associations and physicians’ groups to bury costs and coerce acceptance of their terms instead take options away from the average American while triggering even more adverse reactions from elsewhere in the market. Insurers, supposedly the representatives of patients’ financial interests, have felt compelled to respond to providers’ effective price gouging by abruptly terminating physician contracts and leaving marketplaces (leaving many patients out in the cold with smaller networks), or else by secretly negotiating with hospitals to establish ‘adjusted payment rates’ and so-called “anti-steering clauses” (long-term agreements to avoid moving policyholders to other providers with lower costs), all without providing adequate notice to policyholders (Miller, Allen, Mathews). Governmental interventions, meanwhile, leave a lot to be desired in substance; recently enacted federal legislation that bans surprise billing and mandates that out-of-network cost sharing must match in-network provider rates, for example, only covers emergency services (and even then does not cover ground ambulances), meaning surprise billing is still possible in a large range of healthcare settings (Mensik). Other promulgated rules requiring hospitals to post price lists and insurers to inform members of discounted rates upfront fail to establish guidelines on making the provided information decipherable, while coming under sustained legal assault by healthcare and business groups seeking to shield their dealings from public view (Chiwaya and Kimelman, Weixel).
The hidden costs and false illusions of choice of service perpetuated by U.S. healthcare providers amount to a dirty lie – one that paints the patient’s inability to find affordable care as a personal failing rather than a carefully constructed outcome. The American system is not broken, but rather working perfectly as designed: to maximize profits by harassing and charging patients to the point of bankruptcy, by any and all means. It is despicable that those means have come to include openly deceiving patients about the true value of costs incurred, rendering them less willing consumers and more cash cows on which any number of charges may be whimsically levied. As our white coat-adorned saviors in operating rooms and I.C.U.s become existential threats to the pocketbook, it becomes extraordinarily difficult not to ask the question: was I, the patient, really the priority?
Works Cited
Allen, Marshall. “Why Your Health Insurer Doesn’t Care About Your Big Bills.” ProPublica, 25 May 2018, propublica.org/article/why-your-health-insurer-does-not-care-about-your-big-bills.
Chiwaya, Nigel, and Jeremia Kimelman. “You Can Now Get Your Hospital’s Price List. Good Luck Making Sense of It.” NBC News, 15 Jan. 2019, nbcnews.com/news/us-news/hospital-price-list-chargemaster-rules-trump-mandate-2019-n959006.
Earl, Jennifer. “Doula Explains Why Hospital Charged Parents $39 to Hold Newborn in Viral Post.” CBS News, 13 Oct. 2016, cbsnews.com/news/doula-explains-why-hospital-charged-parents-39-to-hold-newborn-baby-in-viral-post/.
Gold, Jenny, and Sarah Kliff. “ER Bills: A Baby Was Treated with a Nap and a Bottle of Formula. His Parents Received an $18,000 Bill.” Vox, 28 June 2018, vox.com/2018/6/28/17506232/emergency-room-bill-fees-health-insurance-baby.
Kliff, Sarah, and Margot Sanger-Katz. “Surprise Medical Bills Cost Americans Millions. Congress Finally Banned Most of Them.” The New York Times, 21 Dec. 2020, nytimes.com/2020/12/20/upshot/surprise-medical-bills-congress-ban.html.
Kurani, Nisha, and Cynthia Cox. “What Drives Health Spending in the U.S. Compared to Other Countries.” Health Spending, 20 July 2021, healthsystemtracker.org/brief/what-drives-health-spending-in-the-u-s-compared-to-other-countries/
Mathews, Anna Wilde. “Behind Your Rising Health-Care Bills: Secret Hospital Deals That Squelch Competition.” The Wall Street Journal, 3 Oct. 2018, wsj.com/articles/behind-your-rising-health-care-bills-secret-hospital-deals-that-squelch-competition-1537281963.
McGinty, Tom, et al. “Hospitals Hide Pricing Data From Search Results.” The Wall Street Journal, 22 Mar. 2021, wsj.com/articles/hospitals-hide-pricing-data-from-search-results-11616405402.
Mensik, Hailey. “Ground Ambulances, Excluded from Surprise Billing Ban, to Get Scrutiny from Federal Committee.” Healthcare Dive, 22 Nov. 2021, healthcaredive.com/news/federal-committee-ground-ambulances-no-surprises-act/610451/.
Miller, Andy. “Patients Are Getting Stuck out-of-Network Due to Rifts between Insurers and Hospitals.” Fortune, 16 Nov. 2021, fortune.com/2021/11/16/out-of-network-insurance-companies-health-care-systems-hospitals-contracts/.
Pflanzer, Lydia Ramsey. “The Cost of an MRI Can Vary by Thousands of Dollars Depending on Where You Go.” Business Insider, 28 Mar. 2017, businessinsider.com/how-much-an-mri-costs-by-state-2017-3.
Reed, Tina. “Ambulance Rides Are Getting a Lot More Expensive.” Axios, 22 Feb. 2022, axios.com/ambulance-rides-are-getting-a-lot-more-expensive-cee897fe-63b7-4412-aa67-718109773e79.html.
Schneider, Eric C., et al. “Mirror, Mirror 2021: Reflecting Poorly | Health Care in the U.S. Compared to Other High-Income Countries.” Improving Health Care Quality, Commonwealth Fund, 4 Aug. 2021, commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly.
Tikkanen, Roosa, and Melinda K. Abrams. “U.S. Health Care from a Global Perspective, 2019: Higher Spending, Worse Outcomes?” U.S. Health Care from a Global Perspective, 2019, Commonwealth Fund, 30 Jan. 2020, commonwealthfund.org/publications/issue-briefs/2020/jan/us-health-care-global-perspective-2019.
Weber, Lauren. “Patients Stuck With Bills After Insurers Don’t Pay As Promised.” Kaiser Health News, USA Today, 11 Feb. 2020, khn.org/news/prior-authorization-revoked-patients-stuck-with-bills-after-insurers-dont-pay-as-promised/.
Weixel, Nathaniel. “New Trump Policy Will Force Insurers to Disclose Prices up Front.” The Hill, 29 Oct. 2020, thehill.com/policy/healthcare/523328-new-trump-policy-will-force-insurers-to-disclose-prices-upfront/.
SBU Brooklogue 