The practice of charging uninsured patients absurdly high, uncollectable prices can backfire. Collection percentages look low, but even lower if contractual adjustments are not factored in. Unfortunately, the initial charge is always unadjusted because the price rises every time the hospital considers uncompensated care, so the cost is spread to everyone else who can collect.
I had an interesting conversation with a patient who was charged $2800 for a period of hospital observation, less than 24 hours, related to an episode of chest pain.
The "rule-out" is becoming a profit center for many hospitals, especially the ones that figure out how to turn it into an efficient assembly line. I'm not sure how much the average collection (or adjusted charge) is at most hospitals for a "chest pain, rule-out MI" observation not resulting in a hospitalization, but my guess is less than $1000.
Of course this fellow was uninsured and, despairing at the price, ignored the bill. Now his credit is at risk and the collections folks called a couple of days before I saw him for an unrelated problem. He had tears in is eyes as he described how badly he wanted to pay his bill.
So how's that for an irony? Hospital charges ridiculous price in part to compensate for uncompensated care... patient shrugs it off as an impossible sum to even address... hospital collects next to nothing where they may have collected at least enough to cover some costs.
I've said it before, I'll say it again. Medicine and the health care business is both a calling and a social good on one hand and a business and an economic engine on the other. I did not take my management degree at an MBA school because it is not often clear to the students that sometimes the goal is not unfettered pursuit of profit, it is single-minded pursuit of mission.
I suggested he call the hospital and explain his situation. I fully expect they will accept the two or three hundred he can afford to pay, and when you think about the role of a not-for-profit hospital in the community, that's pretty fair, all around.
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2 comments:
This is one of the most morally troubling issues in this area. Frankly, it generates resentment of hospitals and other providers in excess of the financial benefits to them. One of the basic things people want is to be treated fairly - as I am sure this individual said to you - and wide disparity in pricing immediately registers as unfair. In airplane tickets, there is something the consumer can do to get the benefits of disparity - plan ahead - so one doesn't feel treated as unfairly as one does in this situation.
I wonder if there is any state or city that requires uninsured to be charged the same as some other group, like Medicare or like privately insured, and what the financial impact there is. It would make for an interesting comparison and if one doesn't exist, I suspect a politician somewhere is working on making it come to pass.
Re: Charging the same.
That's part of the problem. Medicare requires that the federal government have access to the best discount you offer other customers. The principle becomes consistency of charges across all customer types. If even one patient pays the full inflated charge, it increases the perception of value to those who get a discount. It's like being at the mall the week after Christmas, saying say it's 75% off!
Everyone confuses the "charge" with the "collection."
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