Friday, March 10, 2006

60 Minutes Takes On Hospitals' High Prices for Uninsured Patients

There is an old joke in the US that involves completing the phrase "you know you're having a bad day when..." One popular completion is "... there is an interviewer from 60 Minutes knocking on your door." 60 Minutes has become the classic example of high-profile, prime-time investigative journalism.

Last week, 60 Minutes did a feature story on how hospitals attempt to collect huge payments from uninsured patients. This is not a new story for followers of Health Care Renewal. We last posted on it here and here. The gist is that many hospitals in the US, even not-for-profit and/or teaching hospitals whose missions explicitly include caring for the poor, often charge uninsured patients much higher fees than those they accept from insurers (and federal programs like Medicare) for the same services.

The 60 Minutes version focused on two cases. One was that of repairman Carlos Ferlini who fell off a roof, spent 16 days in St. Josephs Medical Center in Burbank, California, and was charged US $246,000. The Ferlini's went for help to KB Forbes, the leader of small not-for-profit, Consejo de Latinos Unidos, who has been protesting how hospitals deal with uninsured patients (see related post here). "Forbes found that, while St. Joseph's was billing Ferlini almost a quarter of a million dollars, it would accept just under $50,000 as full payment from an insurance company for the same treatment." St. Josephs eventually conceded that "Ferlini qualifies for the hospital's Charity Care Program, which would pay for his hospitalization." Note that St. Josephs is part of Providence Health Systems, a Catholic not-for-profit organization whose stated mission is: "Providence Health System continues the healing ministry of Jesus in the world of today, with special concern for those who are poor and vulnerable. Working with others in a spirit of loving service, we strive to meet the health needs of people as they journey through life." Providence Health System recently settled a case involving its aggressive charging of uninsured patients in Oregon.

The second case was Scott Starbuck, a computer consultant who was admitted to the University of Tennessee Medical Center for a mild, uncomplicated myocardial infarction (heart attack). For a three day admission, he was charged $41,000. Starbuck noted he was charged $19,000 just for the insertion of two coronary artery stents, whose manufacturer sold them for $2300 (which may not be a bargain, either). "Then the Starbucks learned that the charge from UT Medical Center for someone with insurance would be $13,800 [total for the admission] - about one-third of what Scott was billed." "The University of Tennessee Medical Center told 60 Minutes that 'patients who receive the same services are charged the same amounts.' That's true, but there's a catch: Federal law does require hospitals to charge every patient the same, whether they have insurance or not. But hospitals can accept different payments from different patients - and they do." UT Medical Center has only agreed so far to discount Starbuck's bill by 25%, according to 60 Minutes. Note that the UT Medical Center's web-site features a letter from its CEO, Joseph R. Landsman, stating, "I say we are totally committed to providing excellent patient-centered care and outstanding customer service to you—our patients—and your families." Furthermore, "But in this complex maze of medicine, we also want to provide a human touch—one filled with caring and compassion."

60 Minutes obtained response from Carmela Coyle, senior vice president for policy at the American Hospital Association, and from Sen. Charles Grassley, (R-Iowa), chairman of the US Senate Finance Committee.

Coyle: "Actually, what hospitals charge for a service is the same for everybody, whether they have insurance or not. What's confusing for everybody is that what a person ends up paying in this country can be very different."

Grassley: "From media reports, from advocate groups, from individuals, and from my own investigation, I think it's very, very widespread. It's an institutional bias against uninsured people. And it's something to be outraged about."

Coyle: "The Senator is very knowledgeable about health care issues. But what's going on is nothing of the sort. I'm saying that the face of what's going on in health care has changed dramatically, literally in the last year."

Grassley: "I've been told bthat they were going to do that. They've told me that. I haven't seen the changes I ought to see. But if I don't see it very, very soon, we'll probably be doing some legislating in that area."

Given that this issue has now attracted major media attention, and that Sen. Grassley is talking about legislation soon, perhaps we can expect some changes, and hopefully fairer pricing for those least able to pay.

In conclusion, what upsets me most about these stories (and similar stories we have addressed previously), is how the hospitals' conduct appears to contradict there stated missions. How can a not-for-profit organization square charging an uninsured patient several times what it accepts from an insurance company for particular services with a mission to help the poor or provide caring and compassion.


Judith Nudelman said...

I recently saw a patient from Nigeria who needed sugery for a large goiter. In Nigeria, it would cost one thousand dollars. She was uninsured. Her daughter asked me to estimate the cost if done in a local hospital. I told her that I estimate about one thousand dollars/day with more for complex procedures. I did send her to the social worker to explore charity grants. Her daughter was strongly considering a trip back to Nigeria.

Judith Nudelman said...

I recently saw a NIgerian patient who is uninsured who requires surgery for a large goiter. In Nigeria, it would cost one thousand dollars. Her daughter wanted an estimate of the cost if done in the US. I told her I estimate a baseline of a thousand dollars a day with additional costs for procedures. I sent her to social service to explore charity care. Her daughter was leaning toward a trip back to Nigeria. The uninsured pay retail.

Anonymous said...

I worked in claims once for a company where the top execs had affiliation with the big healthcare financial management trade association known as the HFMA, and one gentleman openly stated in a meeting that it was a very small industry where people all knew everyone else.

That's the problem! Surely these folks on the inside have known for a very long time how far removed from their missions these faith-based hospitals often are. That they have not moved for reform until now (suddenly, as if by some miracle, the HFMA has come up with this so-called Patient Friendly Billing project as a result of the bad PR) is very very disturbing.

I hope the press does not let them off the hook for a long time to come, because it is just immoral that they've been keeping quiet for so long.

Now, however, the treatment of the uninsured is piddily stuff as compared to the cases of massive fraud that you can read about at Taxpayers Against Fraud's website. What you can find at that website is just plain scary.