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Talking with the Experts on the Affordable Care Act
On March 16, Dr. Jon Wollenzien of YourTown Health and Dr. Jason Hockenberry, a researcher at Emory’s Rollins School of Public Health, joined the Weekly Check-Up to discuss the Affordable Care Act and what the March 31st deadline would mean for our listeners. As of this date, all Americans must be ensured through their employer or on the exchange or will face a penalty.
Many of our listeners called in to share their thoughts on the new healthcare system, as well as ask questions of our experts in healthcare policy and management. Below is one question received through our website at Ask Dr. Feinberg and the expert answer from Dr. Jason Hockenberry of Emory’s Rollins School of Public Health.
Bruce, I really enjoyed the show today. Last year, I visited the emergency room three times. At each visit, the hospital was unable to tell me whom I would receive a bill from, how much that bill would be, and when I could expect to receive it.
In all three cases, I received three to four separate bills from various independent contractors within the hospital system, sometimes even located in different states!
How are healthcare systems allowed to operate like this? What should I demand while at the hospital and what am I guaranteed access to know at the time of a visit?
Sincerely,
Sore and Confused
Good afternoon, Sore and Confused,
Indeed, few if any other industries operate like this with regard to payment collections. However, few if any other industries also have a third party that pays most of the bills. In the ‘old days’ under indemnity plans, one would pay the bill, and be reimbursed by the insurer. That practice fell out of favor for multiple reasons, not least of which is that medical care is so much more expensive and financing this, even in the short term, is difficult for individuals. It also doesn’t give the insurer much leverage to negotiate better pricing, so what the person pays at the point of purchase and what is reimbursed may differ substantially.
There are multiple reasons for this experience:
1. Regulators have decided it is unacceptable to force payment collection at the point of care (which we might all agree might be best in emergency situations).
2. Due to the complexity of the different types of insurance, and issues around whether deductibles for that year have been met, individual providers might bill too much, the financing issue comes up again.
3. The multiple bills from multiple providers is due in large part to historical artifacts of our system. Physicians in the U.S. have historically remained fiercely independent as businesspersons. This is changing; some hospitals and younger physicians prefer a direct employment model. However, physician and hospital fees are paid differently by Medicare (and therefore most other insurers), so a lot of this complexity still remains.
4. At the base of it all is prices, and they are not clear or advertised in healthcare, partially due to high variability in costs related to differences in patients and their needs.
For an analogy, consider having dinner out at a full service restaurant. Think not of specific menu items, but of the cost of the dining experience. If you walked in and asked a wait staff at a full service restaurant for the price of your entire visit, they can’t tell you, because they don’t know what you are going to order. If you tell them what you plan to order, then yes they can. But what if you didn’t want that third beer? It’s already poured, so who pays for it? When you go to an all-you-can eat buffet, the price is higher than the cost of the food that most people consume. If not they’d be out of business. Oh, and the quality? Not so great usually, right?
Similarly, let’s consider what the options are for paying when you show up for back/neck pain. It might require x-rays, MRI’s, CT scans, immediate surgery because of a clogged artery or pinched nerve posing danger, etc. Thus it is hard to price up front. They could do it buffet style. I am not sure that’s what we want, because the person who simply has a sprained neck gets charged the same price as the person who needs emergency surgery because of cervical fractures and possible impingement of the spinal cord.
Alternatively, they can bill like an a-la-carte restaurant. The issue in that case is that every insurer has a negotiated fee schedule for each little part and party to the care you were given. This, combined with the rules on your cost share varying across plans, makes it hard to pull up a total bill right away. It seems like this could be more automated, but because of the complexity it is currently not at most hospitals.
That may change with improvements in health IT, but the reality is that there are regulations (see HIPPA) that restrict a lot of patient information flow in the name of privacy. Also, the insurer wants an opportunity to review so they can check for, so even if the information flows well, it’s not clear that immediate patient cost obligations are going to be available even in a more automated world.
And in the end, the main reason most hospitals can’t provide detailed information on the who, what, when, where, and why of your invoice is because they do not have the technology infrastructure to support this. Electronic medical records for every aspect of patient care are just not available at this time in most places. Hospitals, in part in response to regulation, are trying to get there, but it will take some time.
Sincerely,
Dr. Jason Hockenberry is an Assistant Professor in the Department of Health Policy and Management at Emory’s Rollins School of Public Health.