A recent article in Time magazine, Bitter Pill: Why Medical Bills Are Killing Us, the article yet again focused on the outrageous bills that uninsured or underinsured patients are stuck with following medical services received. The article enraged the general public by comparing the cost of simplistic, over-the-counter items that can be found at your local drug store for a fraction of the cost of what is charged by most hospitals. Furthermore, the author continued to focus on the disparity in healthcare pricing across the country, using common procedures with up to ten of thousands of dollars variance depending on geographic location.
What is always interesting about these types of articles is that information is always one-sided; insinuating that hospitals ‘do not care about the patient’ or simply ‘out to make a profit at the expense of the innocent’. Having worked a significant portion of my career in healthcare, this couldn’t be further from the truth. The article failed to mention the process of financial assistance offered by all non-profit healthcare facilities that have discounted rates for patients up to 600% of the federal poverty guidelines (see grid below). What this translates to is that discounts are offered for annual incomes up to $141,300 for a family of four (not exactly ‘poverty’). In addition, most facilities also have catastrophic coverage of a maximum of 25% of a household annual income can be applied to medical expenses.
2013 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES
Persons in family/household
|For families/households with more than 8 persons, add $4,020 for each additional person.
As mentioned above, the article also relates the retail cost of an item at a local drug store to the amount charged by a facility, such as the classic example of a generic acetominophen charged at $4-5 per pill where a bottle of 60+ pills can be obtained for $8 over-the-counter. Again, the one-sided image of healthcare ‘costs’ does not take into consideration the direct labor costs associated with the registration personnel that checked-in the patient to the pharmaceutical tech and nurse that administered the drug. And shall we not forget the indirect labor costs associate with the environmental service staff, administrative directors, financial analysts, billers, coders and collectors all associated with converting the revenue from an ambiguous ‘charge’ to actual ‘cash’. These costs can count for upwards of 60% of the charge billed to the patient. In a future world of health insurance exchanges, this will only become more complicated for the patient but healthcare facilities are proactively responding by the creation of new roles of patient navigators in emergency departments and other ancillary locations to assure patients are directed along the correct path, both clinically and financially.
As we all have probably experienced less insurance coverage with higher premiums and out-of-pocket costs, what are your thoughts on this subject?