A close look at my own hospital bills
I was diagnosed with thyroid cancer a few days before Thanksgiving and a month after turning 26.
The C word is never easy to hear, but the prognosis was good and I had no symptoms. My doctor at the time was getting ready to retire, frustrated with the medical industry’s insistence on 15-minute checkup times. She spent the extra time that day giving me a full and rigorous examination, which made all the difference.
After the thyroid surgery I recovered well. I had plenty of support from my loved ones. But I didn’t realize at the time that this was just the beginning battle in my war with the medical industry.
For my research as a Greenlining Summer Associate, I was doing a case study on not-for-profit hospitals’ community benefit programs in San Francisco. In exchange for their tax-exempt status, not-for-profit hospitals are required to provide “community benefit” in the form of charity care (free or subsidized care for the underinsured), community grants, and other resources to address community health needs. I’m was trying to understand where the money goes and who it helps, and what I am finding is an alarming lack of transparency in community benefit reporting. If we don’t know where hospitals’ community benefit dollars go, we can’t hold them accountable and make sure they address our communities’ most pressing health needs.
Since starting this research, I am digging deeper into my own medical bills, seeing a lack of transparency at virtually every level of the medical system. I spend hours each month on the phone with providers, my insurance company, and billing companies trying to understand my bills and what I still owe. I keep a giant spreadsheet with information on each bill, the payment status of each, and confirmation numbers, but it is still a nightmare. I have come to the conclusion that they want to keep us, the patients, in the dark for their own profit.
While conducting research interviews for my community benefit case study, I talked to a senior hospital administrator from one of the world’s top hospitals and asked, “Can you explain to me why my bill for $72,000? What goes into determining that charge?”
I was shocked when he responded, “Nothing. For 99 percent of hospitals there is no relationship between the amount charged on the bill and the costs of providing the service.” He went on to explain that insurance companies negotiate a price with the hospital and pay about 20-30 percent of the bill that we see. He mentioned that this rate they negotiate with insurance companies was generally 140 percent of the costs of the service to make up for the costs they lost on seeing Medicaid patients. He also explained that uninsured or underinsured people will have the bill forgiven or greatly reduced in the form of charity care or financial assistance. Joseph Newhouse, Professor of Health Policy at Harvard University, supported this claim on NPR’s Planet Money comparing the hospital charge to the sticker price of a showroom car, which isn’t meant to be paid.
This seems like an enormous problem. Insurance companies have leverage and are able to negotiate a rate, and people who are underinsured and low-income may qualify for charity care, but there is a large group of people who are stuck in the middle. There are countless stories of an aspirin at the hospital costing $30 or a single stitch costing over $500.
This becomes extremely alarming if we look at not-for-profit hospitals’ community benefit spending. The bulk of hospitals’ community benefit goes towards charity care, financial assistance, and the unreimbursed costs of Medicaid (Medi-Cal in California). In essence, they count the amount they say they’re underpaid as charity care – community benefit. But given the lack of transparency in my bill for that one night hospital stay and the executive’s comments, are any of those numbers real?
As consumers of healthcare, we are kept in the dark by hospitals, providers, and insurance companies. I see the same story in my own medical bills that I see in my research on nonprofit hospital community benefit programs. Most of us usually don’t think about this until we are faced with it personally, but by then there is little that can be done.
If the facts were brought into the light, maybe we would start fighting to hold the protectors of our health accountable: accountable to us when we are sick and just need to be taken care of without worrying about a mountain of complex bills; accountable to our communities when we give them billions of dollars in tax breaks in return for community investments; and accountable to a society that depends on their services like no other.
Transparency is the first small step toward fixing our broken healthcare system. With so many parties involved, and with such important implications for the decisions being made, bringing the facts out into the open will enable us to finally have a discussion around what it truly means to create real health benefits for communities in dire need.
This post was originally published by the Greenlining Institute in August 2014.