Our Healthcare Payment System is Beyond Broken

A family member recently experienced a healthcare emergency.  Said family member was taken to an emergency room known to be in that family’s network.  The ER staff was great.  After stabilizing the patient, the ER doctor said the patient needed to be transported to a different hospital, still within network, for evaluation and further testing that hospital could not perform.  The patient asked if personal transportation were allowed.  The doctor was adamant that the patient needed to be transported by ambulance. 

Fortunately, the patient is on the road to recovery.  Unfortunately, the patient received an almost $1,200 bill for an ambulance ride because the ambulance was out of network.  The patient was never consulted on choice of ambulance providers.  Had the ambulance been in network, the ambulance company would have been reimbursed $342.  To add insult to injury, the family has already hit its in network deductible, making the full amount due by the family.

Imagine if we all ran our businesses that way.  If I told someone, “Sorry, your labels took longer to produce than we thought, here’s your new bill,” I’d either be out of business or in court a lot.  I have come to find out that it is common practice for ambulance companies and even anesthesiologists that work at hospitals to be out of networks, even if a person goes to an in network hospital. 

The healthcare payment system needs radical changes.  Here are a few ideas:

  1. If hospitals charge non-insured people more than insured people, they lose non-profit status.  How a hospital systems that nets hundreds of millions of dollars in operating income is a non-profit is beyond me.  Both the Mayo Clinic and Cleveland Clinic make hundreds of millions of dollars a year and pay no income or property taxes.

https://en.wikipedia.org/wiki/Cleveland_Clinic

  • If you go to an in network facility, all services determined to be medically necessary must be covered as in network by the insurance company. 
  • All prices must be available online in a format that a grade schooler can understand.  “Facility fees” should be banned.  As part of Obamacare, hospitals are allowed to charge additional fees for using their facility even if you see a doctor that is employed by that hospital. 
  • Any relationships that involve a hospital, doctor, or other service provider receiving payments of any kind must be disclosed.  I wonder if the ambulance company pays the hospital a “Provider fee” or some other payment that would be an illegal kickback in any other business. 

Doctors, hospitals, and insurance companies have to understand that people are incredibly frustrated by the current payment system in our country.  Insurance companies are the easy targets for politicians and the media.  I submit they are part of the problem, but so are the doctors and hospitals.  As our Democratic presidential candidates love to say about successful people in the private sector, “It’s time to hold them accountable.” 

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