Bitter Pill: Our Strange, First Foray through the Medical Billing Gauntlet

Tuesday Feb 26 | BY |
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medical billing

LOL, when I first downloaded this image I didn’t realize that it was either Chinese or Japanese — which means this bill “might” be without excessive mark up. That is if I could read it…

A friend of mine suggested that I read an article called “Bitter Pill: Why Medical Bills Are Killing Us” recently published in Time Magazine.

When he told me about it, he wouldn’t give me more details than tell me it was shocking, relevant to Renegade Health and said that I should read it as soon as I could.

“Right now?” I asked.

“Right now.” He said.

A few hours later, at dinner alone in Austin, I pulled out my iPad and found it online. I read the entire 11 (web) pages in one sitting. (In fact, I read it again the next morning.)

It’s probably the most interesting article I’ve read on the health care industry in years. It’s also the most disgusting.

Writer Steven Brill exposes how hospitals bill patients and the staggering differences between what they collect depending on if the patient is insured, uninsured or on Medicare.

Essentially, uninsured people sometimes pay 10-100 times what Medicare would pay for the same services administered and about 2-10 times what private insurance companies pay.

To give you a quick example, Janice S. an anonymous, uninsured patient found herself with $21,000 in hospital bills after a heartburn attack. The disparity between what the hospital wanted her to pay and what they usually collect from insurance agencies and Medicare is borderline criminal. Here are some examples:

“The expensive technology deployed on Janice S. was a bigger factor in her bill than the lab tests. An “NM MYO REST/SPEC EJCT MOT MUL” was billed at $7,997.54. That’s a stress test using a radioactive dye that is tracked by an X-ray computed tomography, or CT, scan. Medicare would have paid Stamford $554 for that test.

“Janice S. was charged an additional $872.44 just for the dye used in the test. The regular stress test patients are more familiar with, in which arteries are monitored electronically with an electrocardiograph, would have cost far less — $1,200 even at the hospital’s chargemaster price. (Medicare would have paid $96 for it.”

I’m not going to recap all the details here in this article, you can read that in full here. (Which I think is just short of mandatory reading for all Americans and anyone else who doesn’t like to get fleeced.)

What I’m going do here is tell you a personal story that is a real life example of what Brill outlines — a hospital and billing experience that Annmarie and I went through during the birth of our child, Hudson.

Our situation clearly outlines three major points discussed in the article — bill discounting, ambulance fees and unnecessary doctor visits. I’m not going to mention the hospital, because for the most part — though somewhat luckily as you’ll read — have had a decent experience with them.

What you hope for, may not be what you get.

We had hoped for a home birth. We hired a midwife who we connected with immediately. She was of Eastern European decent which made us happy for two reasons — first, we’ve found many Europeans to be much less prude about anything dealing with private parts — including birth — than us Americans, and second, most Eastern Europeans that we know don’t shy away from being direct. This a quality we wanted in a midwife, since we were getting into something completely unknown to us and needed someone who could assist us as well as direct us through chaos, if it were to happen.

Our choice turned out to be the right one.

During Hudson’s birth, everything was going smoothly in our apartment. Ann’s contractions were strong, but she allowed them to take over her and be calm by not fighting. The only thing bothersome to her was the occasional commercial on our pre-chosen Pandora station (my fault.)

After her water broke, our midwife noticed — during routine heartbeat checks — that the baby’s heart rate was dropping when Ann was pushing. This wasn’t of concern at first, but as time went on, she cautioned us about it and told us that if it continued, she felt it was appropriate to go to the hospital. We both agreed. We’re natural lifestyle people, but we’re not so foolish to disregard a midwife who’s had almost 30 years of experience.

As time passed, the contractions and heart rate drops became more frequent and she gave Ann 15 more minutes. After that, we’d have to go to the hospital.

Fifteen minutes later and still no baby, she told us it was time to go.

In a very crazy 2-3 minutes, I called an ambulance (since driving wasn’t an option, the baby could have been born on the way to the hospital), called the hospital and gathered our go-bag. Within six, we were in the ambulance on our way to the hospital.

The two minute baby.

We had been to the optional course the hospital gives for those expecting to deliver at their facility, but we never expected we’d have to worry about those details. Luckily, our midwife, again, had prepared us well enough that we knew what to expect.

On intake, a nurse asked us if we had a birth plan. This is a plan that we agreed upon beforehand that outlines how we’d like to be treated. Our hospital — I think since we’re in the progressive Bay Area — is extremely progressive and the patient actually does have some sort of choice. I can imagine some hospitals would not be so accommodating.

I explained that we wanted a drugless birth, but if the situation escalated our ultimate goal was a healthy baby and healthy mom — so that meant whatever it took to ensure that this happened. The nurse seemed to take this in stride. I imagine he sees a lot of neo-crunchy people like us. Why wouldn’t he? We do live in Berkeley.

After that quick exchange, Ann was quickly whisked away to a birthing room with a doctor, nurses, mom and me in tow.

Within minutes, with maybe two or three pushes and no medications for mom, Hudson was born.

(I gave a fist pump when I saw his penis and Ann knew right away it was a boy. LOL!)

After his birth, everyone vacated the room for at least two hours of skin to skin time for Ann and Hudson. We were thrilled they allowed this without any additional poking, prodding, weighing, or injecting. They also, surprisingly enough, let us keep the placenta to encapsulate, as long as we signed a waiver that we wouldn’t encapsulate it. LOL.

That evening we stayed at the hospital and the next day, after a few rounds of testing, doctor check-ins, lactation consultant visits, poo counting (for the baby) and my urging to let us leave, Ann was discharged at about 4:00 PM.

On the way out, I needed to go down to financial services to take care of the billing.

The $5000 deductible.

Ann and I have health insurance.

We didn’t have it for years due to a few reasons. First, we were self-employed and there were times when we just couldn’t afford it. Second, we were eating healthy and never went to the doctor. If we did, which I don’t remember a time due to illness, we told each other we’d pay out of pocket. It was much cheaper to pay $100-500 one time than hundreds of dollars a month for coverage we weren’t using.

Once we knew we wanted to have a baby, our thinking changed. We no longer were taking care of just the two of us, so we signed up Annmarie for a $5000 deductible program. This simply meant that we would pay for any hospital care under $5000 — with some blood tests and other visits given at a discount. Basically, this is what you would call major catastrophic insurance. Something that I think is very smart to have — particularly in light of this recent article. Some people can accumulate bills of over $80,000 — the amount of a full 4 years of college education — during one overnight stay. This amount of money is financially debilitating to probably 99% of the American population.

I’ve since gotten the same coverage, and with it came relief that I don’t get the occasional tinge of fear when I think about not being insured.

Anyway, at the financial services desk, the woman behind the counter joked about our very short birth — “you’re the two minute dad!” — and gave me the bill. In this case, I knew what to expect. $5000.

I didn’t have to pay now and she also told me that I can apply for financial aid to lower the bill. She told me I should do it, since everyone gets a discount. I was surprised that she told me I could apply for this so openly, but was happy that I might be able to pay less than the sticker price for the birth. I got all the paperwork and took it home to fill out later in the week. Now wasn’t the time to worry about bills, we had a baby to get to know.

A financial slip up and a fortuitous letter

In our much less frequent free time, we attempted to work with the financial aid office to work out a deal. We faxed tax returns, extension letters, and just about everything that they wanted. But, about a month after our last contact, we had still heard nothing. I dislike loose ends, so I asked Annmarie to call and check in. They told her that we were still missing a few things that we had already faxed over. When Ann told the woman we had already faxed them, she checked and found them filed incorrectly. Our file was complete — it just needed to be reviewed. She also informed Ann that since this was taking so long, she would mark the file so that it wouldn’t go to collections.

A few days later, we received a letter in the mail.

Our bill was going to collections.

But…

As you can imagine, I was mad. I don’t like it when I’m told something is being done and find out later that it is not.

But after reading the short, three or four paragraph letter, we realized that this not a warning and a threat, but a negotiation.

Our hospital wanted to offer us a reduced bill so they didn’t have to sell the debt to a collections agency. If we paid just around $2,600 of the original $5000 in the next few weeks, we could stop the bill from going to collections.

Basically, if I was reading the letter correctly, we was getting around a 40% discount on our bill and the hospital was glad to accept that much. I was completely unaware that it was possible to negotiate with a hospital, nor did I fully believe that a deal like this was legit — I assumed there were strings attached. (When you read Brill’s article, you’ll find this is commonplace, even before a pre-collections letter is sent. In fact, there are agencies devoted to negotiating your hospital bills on your behalf.)

The next day, I contacted the financial office and talked to the representative there. I had three questions for her.

1. If I paid the bill at a discount, would it stop any other collections proceedings?

2. If I paid the bill at a discount, would it increase any of our monthly premium payments or affect our standing with the hospital?

3. If I waited for financial aid, would the bill be less or more than this negotiated figure?

For the first question, the answer was a yes. I didn’t want to possibly damage our credit for a few thousand dollars, but when assured this wouldn’t happen, I was OK with paying the discount.

The second, was a no. I was afraid that by accepting the lower bill, I would tarnish our record with the hospital — just like how getting into an accident can cause your car insurance company to raise your premium or drop you altogether. She explained that this happens all the time and there would be no issue with the hospital moving forward. I was a little shocked, and wondered if this was too good to be true.

On the third question, she told me that the break was just about the same. Furthermore, she explained that we had actually been denied financial aid and would be getting a letter in the next few days. So we didn’t get the aid, but we could get the discount.

I was satisfied with her explanation, paid for the bill on a credit card that we pay off monthly and saved over $2000 (plus got some airline miles.) Not a bad deal and a surprise that we stumbled upon because of a mistake in the notes on our file.

The totals…

If we were uninsured, the total bill for the hospital would have been over $10,000. With our insurance, our deductible and bill was for $5000, but because of good fortune we only paid around $2600. Essentially, we paid about 25% of the sticker price for the services given (or billed.) If we hadn’t had any insurance, I assume we would have paid it in full, since it was just by luck that we received the pre-collections letter. We would have paid over $7000 more than we did — as much as a decent used car.

The Time article affirms that most people (including us until recently) have have no idea that hospital bills for the most part are negotiable — and the fact that they are is because they’re so seriously inflated.

After reading Brill’s article, I wondered if I could have paid less. What if Annmarie was 65 and on Medicare (and pregnant?!?) Would Medicare have paid 5, 10, or 15% of the total bill?

Ultimately, we are satisfied with what we did pay and, of course, the outcome — which was much more important — a healthy mom and healthy baby. We likely would have paid any multiple of what we did to ensure this. Which is part of the underlying problem.

People will pay anything to keep themselves and their loved ones healthy — at least when they have an illness or disease that requires a hospital stay or ongoing care. So the question becomes, how much markup is ethical? Hospital billing practices fall into a gray zone where it’s essential to weigh the cost of care versus the service you’re providing people in your community (in some cases saving lives.) Effective emergency care can mean that you see a loved one again, but you shouldn’t have to live with them in financial ruin afterwards.

Another surprise

A few weeks after paying the bill, we received a letter from the Berkeley Fire Department. Our ambulance ride had cost us almost $2000. This apparently was not covered by insurance. Annmarie called to confirm this and the hospital said sometimes the ride is paid for and sometimes it is not. What we could do is submit it to the financial office and see if they’ll pick up the bill.

In the meantime, Ann called the Fire Department and asked for a deal. They, just like in Brill’s article, confirmed that they don’t give discounts, but would be willing to allow us to make interest free payments of $75 a month until it was paid off. That was agreeable — at least until we got word from the hospital as to whether or not they’d pick up the bill.

We’re still somewhere in this process 7 months later, but based on our previous experience, I’m actually somewhat hopeful we can work something out.

A revolving door of doctors.

Before I wrap this up, there was one other thing that happened to us during our stay that the article possibly confirmed.

Until I read the Time magazine article, I would joke with friends and family about how many doctor visits we were subjected to the next day in the hospital. There were so many, in fact, that we asked them to stop coming in — we didn’t want to be bothered.

Apparently, this could have been evidence of a practice of providing too much care to pad a bill.

On this practice, here’s another clip from the article:

“One of the benefits attending physicians get from many hospitals is the opportunity to cruise the halls and go into a Medicare patient’s room and rack up a few dollars,” says a doctor who has worked at several hospitals across the country. “In some places it’s a Monday-morning tradition. You go see the people who came in over the weekend. There’s always an ostensible reason, but there’s also a lot of abuse.”

I don’t want to accuse this facility of doing what is suggested above, but it’s a very compelling argument as to why we had at least three different doctors come in to examine the baby on more than one occasion in less than 6 hours — all with the same examination and advice for us.

What does this all mean?

Our story, is a slightly similar example of the stories featured in the article. The exception is that we, or at least I feel, got a decent deal. We ended up on the lucky side.

The people Brill profiles were taken advantage of and ended up dealing with a lot of misery they could have avoided completely. Yes, some were completely uninsured and took that risk. But others were insured and had limits to their payouts — something that was either confusing or not fully clear when they signed up through their employers.

The good news is that until, now — the publication of the Time article — it meant that very few people, knew about the full extent of hospital billing and how little they’d actually accept for payment.

Furthermore, the publication of an expose, if you want to call it that, like this will undoubtedly do two things.

First, it will allow patients who don’t have insurance or have coverage caps and are stuck with huge bills to negotiate — knowing that they can (a positive.)

Second, it will put the hospitals on guard for this behavior. So that either means they’ll tighten up their negotiating guidelines (a negative) or they’ll lower their absurd prices (a positive.)

What happens because of it is yet to be seen, but our personal experience while it seemed somewhat shocking and fortuitous at first, appears much more commonplace.

Ultimately, your (and my) responsibility is to share this hard hitting article with just about everyone you know. (Not my article, but the one from Time!) You can do so by visiting their site (here) and liking it on Facebook or emailing it around to friends. I truly think it’s that important for others to know what is going on and hopefully start the conversation that will put this outrageous billing to an end.

I’m all for capitalism, but only with fair pricing.

Almost all businesses require a markup to make money and make a difference in the world, so I don’t think hospitals should give their services away for free. But I think the health care industry needs to be checked with either a universal markup key or a cap on percentages at which a service or product can be sold — particularly if they’re operating under non-profit status — and I imagine this would have to be instituted through public policy, which some of you oppose and others embrace.

Regardless, something needs to change. We’re not dealing with fancy cars, 10,000 square foot houses or other expendable items that have little ethical pricing structure consideration. This is an issue that requires examination of some deep and possibly unanswerable questions. One of them is this: how much can you charge to save a human life without being greedy?

Just because someone would pay millions of dollars to keep their loved one healthy doesn’t mean they should have to.

Your question of the day: What do you think about the medical billing process? Have a story like this?

Kevin Gianni

Kevin Gianni is a health author, activist and blogger. He started seriously researching personal and preventative natural health therapies in 2002 when he was struck with the reality that cancer ran deep in his family and if he didn’t change the way he was living — he might go down that same path. Since then, he’s written and edited 6 books on the subject of natural health, diet and fitness. During this time, he’s constantly been humbled by what experts claim they know and what actually is true. This has led him to experiment with many diets and protocols — including vegan, raw food, fasting, medical treatments and more — to find out what is myth and what really works in the real world.

Kevin has also traveled around the world searching for the best protocols, foods, medicines and clinics around and bringing them to the readers of his blog RenegadeHealth.com — which is one of the most widely read natural health blogs in the world with hundreds of thousands of visitors a month from over 150 countries around the world.

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