HealthCare Advocate Blog

Constantly hearing in the media about three particular major shortcomings of the healthcare system in the U.S. and a recent encounter of a friend, has lead me to pursue “The Uninsured Patient Experiment.”

The three shortcomings of the U.S. healthcare system I’m referencing are the increasing cost of healthcare, the number of uninsured people and bankruptcy filings due to medical bills. Every time you visit a provider or try to renew or obtain health insurance you are seeing the effect of the increased costs. There are over 40 million people without health insurance coverage and everyday that number is increasing. The combination of the first 2 issues leads to the third. Rising prices and no insurance have made medical bills a leading cause of bankruptcy in the U.S.

A close friend of mine (we’ll call him Mr. X who was uninsured at the time) needed some laboratory tests performed at the direction of their doctor.

hese tests included a routine chemistry profile (12 tests), a thyroid profile (3 tests) and the quantitative measure of 3 other hormones. I spent 25 years in the in-vitro diagnostics industry as a salesman and manufacturer for many of the reagents used in these tests and therefore I have a unique perspective on their actual costs and the significant markup hospitals mandate. When the bill arrived and was $579 due in 30 days a shocked Mr. X promptly came to me for advice. He wondered if it was possible to negotiate a cheaper price? Certainly the insurance companies aren’t the only ones who get to bargain with the hospitals…or are the only people that pay list price really those who can least afford it? Sure, hospitals must make money to continue to offer high quality services, but at whose expense? Should there not be room for the uninsured to bargain or should they be forced to pay a price that ultimately may lead them to bankruptcy and put a further burden on society?

I armed Mr. X with some information and told him to call them and try to bargain. He called the hospital and spoke with a billing person who said that because they had no insurance there wasn’t a negotiated fee schedule and they had to pay the full amount. However, the hospital would be happy to work out a payment plan which spread the payments out over 18 months with no interest. Mr, X had no other recourse other than to pay the full price over 18 months. Now, $32 a month shouldn’t force a bankruptcy, but what about more expensive procedures such as surgery or diagnostics? This piqued my interested, so began “The Uninsured Patient Experiment.”

My hypothesis was that most hospitals would not give an uninsured patient the discount they give insurance companies, but may give a payment plan. What I found is encouraging and disturbing at the same time.

The experiment starts by calling 11 hospitals in 5 states posing as a patient who made too much to receive government assistance but not enough to pay for health insurance. The procedure that was used to get prices on was a Computed Tomography, lumbar spine; with contrast material, in layman’s terms a CT scan. I chose a CT scan because they are normally not an emergency procedure so there is opportunity to shop for this service. The table below shows the data collected.

		Cost & Terms for the Un-Insured for CT Scan
State	Hospital	Terms	# of Beds	List Price	Best Uninsured Price	Un-scaled Medicare rate
Mass Hospitals	Beth Israel Hospital	If paid in full at time of service a 30% discount is applied. If not paid in full 50% down and remainder on a payment plan	509	$2,401.00	$1,680.70	~$372.75
	MetroWest Medical Center	Patient accounts quoted that the procedure is normally $1300-$1500. If patient does not have insurance, Metrowest Medical Center charges them the medicare rate of $204.07	360	$1,400.00	$204.07	~$372.75
New York Hospitals	Mt Sinai Medical Center	Needed to call the doctor to find out what he charged for the last 3 CAT scans	1171	Would not divulge		~441.62
	St Vincents Midtown	Patient must come in and speak with a financial counselor or a physician about cost	150	Would not divulge		~441.62
Texas Hospitals	Hendrick Med Center	50% discount payable in full at time of service or 25% discount and a payment plan for the balance. Person believes it is interest free but is not positive.	362	$1,013.39	$506.70	~$340.6
	Christus Spohn Shoreline	Financial counselor said if patient brings in proof of income there is a 60% discount up front, payable at time of service. If no proof of income then a 40% discount is applied. Further payment plans need to be discussed w/ counselor.	148	$3,970.00	$1,588.00	~$340.6
North Dakota Hospitals	Meritcare Health System	They offer a 10% discount and payment schedule. Balances of $500-$1000 to be paid in 3-5 months but will allow 8 months. The reading charge of $175 they want pd 3-5 months	582	$1,275.00	$1,147.50	~$299.93
	Altru Hospital	Patient services quoted approx $2600 for 1 view. They want 1/2 down and balance paid in 6 months. If 1/2 payment can’t be put down, payment arrangements can be made.	277	$2,600.00	$2,600.00	~$299.93
	Mercy Med Center	Quoted $2178.54 plus a reading charge (didn’t know what it was). Hospital gives 20% discount if paid in full within 60 days. Financial application must be filled out before terms can be set up	87	$2,178.54	$1,742.83	~$299.93
Florida Hospitals	Tampa General Hospital	Patient accounts quoted $2095 full cost/will apply 30% discount($1466.50) of which they want 70% down at time of service($1026.50)/have to sign promissory note for balance/interest free payment plan initiated	818	$2,095.00	$1,466.50	~$353.79
	Heart of Florida Regional Hospital	Offer 50% discount. If payment can’t be made at time of service balance can be financed.	142	$2,487.19	$1,243.60	~$353.79

Here are some quick observations:

• The list price varies by 75% ($1,013 to $3,970).
• The best uninsured price varies by 92% ($204 to $2,600).
• List price discounts range from 0% to 86%.
• To get many of the discounts hospitals offer the balance needs to be paid in full at the time of service or a large down payment made, to receive it.
• Some hospitals are unwilling to divulge the price over the phone and others will not call back.

The process to collect the information was laborious requiring numerous phone calls and conversations with people in multiple departments. Although the idea of shopping for procedures is a good one, the reality is the information is not easily obtained or not the answer you were hoping for. The healthcare industry stands alone with its lack of shopping convenience and pricing consistency. The most important thing to recognize is that when a hospital’s Medicare/Medicaid admissions constitute 50% or greater of their total admissions and gives significantly reduced prices, it shows that the lower prices are financially acceptable. How can they then justify the astronomical markup they charge the uninsured?.

What if the government mandated that any hospital that accepts Medicare/Medicaid, must also allow the uninsured to pay based on the same fee schedule? It’s not universal healthcare, but it’s a step towards fixing the much broken system.

While we wait for the government to act, there are steps you can take to reduce your potential burden of medical expenses. Knowing your local hospitals policy for the uninsured today can save a tremendous amount of money and hardship if you have an emergency tomorrow. If you don’t know the hospital’s policy upfront, you may be subjected to higher prices, perhaps even the threat of bankruptcy if the procedure or procedures you need done exceed your financial means. Instead of going to the emergency room for routine and non life threatening tests, consider a stand alone walk-in clinic or one that you are starting to see show up in your local pharmacy or discount mega-store. New tools are being introduced every day to help consumers navigate the health care system. Find them and use them, before you have to and recognize that all hospitals are not equal.

What can providers do to reduce the burden that the high price of medical care puts on the uninsured? First and foremost, set reasonable list prices for procedures or offer discounts that an uninsured person can actually get without paying the majority or entire balance in full at the time of service. Perhaps introducing a sliding scale pricing structure based on income would be a fair way of helping the uninsured. A whole other can of worms that parallels this issue is the rate at which hospitals are litigating against patients for unpaid bills. Maybe instead of paying the lawyers, they could give the proper discounted rate to the uninsured and avoid the legal cycle and debt disputes from the onset.

Some hospitals will work with the uninsured proactively and should be recognized for it. How would you suggest approaching this financial and societal crisis?

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