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I found this site published by David Belk M.D. who was attempting to find out where the cost is in health care. The excerpt below is from one of his posts that brings absolute clarity to what is going on.
Hospitals see no problem in sending bills to insurance companies for five to ten times the amount that they actually expect, because they are simply playing the game that the insurance companies fashioned. But remember, they only produce one kind of bill, and it’s designed to send to someone who holds all the cards (an insurance company), and so can just refuse to pay anything they didn’t already agree to pay. That’s their game. But what happens when you have to play the game with the hospital alone (if you don’t have insurance, or if your insurance doesn’t cover that stay for some reason). Then you’re on the hook for the entire amount. Most hospitals have a policy that allows people to negotiate for a lower amount, but most people don’t know this. And don’t expect the hospital to tell you about it, let alone help out. So even if you can remember to negotiate while you’re convalescing from a long hospital stay, good luck trying to get the deal the insurance company gets.
For the average person, this is no small matter. In the first case, a two day hospitalization that the insurance company got for $2,100 (after the insurance adjustment), would cost an uninsured person over $21,000. The adjusted charge ($2,100) would be a pretty nasty kick in the finances for most families, but they could bounce back. The unadjusted charge, which is what you’ll get if you don’t have insurance, is an almost certain trip to bankruptcy."
Insurance companies base their payments on the usual and customary for an area. Had this hospital billed the insurance company at that rate, they would have gotten 100% of that....
My clinic bills at close to that rate, not 5 or more times that rate and the actual reductions are very small, if any. This is not an "insurance company" game, it's a medical provider game.
As for not knowing the costs, it's funny, I can go to my health insurance company website, put in a procedure and boom, there is the cost...hummmmmm. Is there some reason a doctor can't do that too???? Do they not know how to use a website or what is the problem? Now, if I go in for a procedure, that cost is for a typical procedure, if there are complications, I would certainly expect that cost to go up, but then again, common sense is a skill a lot of people just don't have. My latest "major" procedure actually priced out almost to the penny what my health insurance pricing tool had for my provider.
Insurance companies base their payments on the usual and customary for an area. Had this hospital billed the insurance company at that rate, they would have gotten 100% of that....
There was a time I believed this. But when I had an expensive operation in a private NYC hospital in 1978 they did not cover more than a third of the cost, and this was given as the reason - I had been charged beyond the usual and customary costs. I talked to my surgeon, and he said the insurance company was full of crap and that the cost that I had been charged was right around the usual charge in the area where I lived.
I protested and cited his claim as he was a bit of a mucky-muck in local medical circles, and I began writing a stream of letters asking what they considered my geographic area, etc. Suddenly, one fine day, totally without explanation I received a vastly reduced bill for the difference.
I would dearly like to believe otherwise, but I came to the conclusion while living in the U.S. that private hospitals, insurance companies, doctors and the entire medical industry were a consortium of blood-sucking thieves.
I have received superb surgery and care in an unbelievably fine private hospital in Barcelona at less than half the going rate for the same procedures and a shorter stay in hospitals on the East Coast of the U.S. and in Texas, and I went to the trouble of finding out the costs before committing myself to a surgeon and a hospital.
Insurance companies base their payments on the usual and customary for an area. Had this hospital billed the insurance company at that rate, they would have gotten 100% of that....
My clinic bills at close to that rate, not 5 or more times that rate and the actual reductions are very small, if any. This is not an "insurance company" game, it's a medical provider game.
As for not knowing the costs, it's funny, I can go to my health insurance company website, put in a procedure and boom, there is the cost...hummmmmm. Is there some reason a doctor can't do that too???? Do they not know how to use a website or what is the problem? Now, if I go in for a procedure, that cost is for a typical procedure, if there are complications, I would certainly expect that cost to go up, but then again, common sense is a skill a lot of people just don't have. My latest "major" procedure actually priced out almost to the penny what my health insurance pricing tool had for my provider.
Figure 1: Hospital Bill
The first bill is for a patient who spent two days in the hospital, and has private insurance (a Medicare advantage program). Let’s see how the numbers add up. In the bottom right corner is the Account Summary. From the first line, you can see that the total bill came to $21,274.49, or about $10,000/day for two days. (The services leading to that cost are on the left: a couple of $2,500 CAT scans, a $4,400 ER charge, etc.) On the next line is the amount the insurance company paid: $2,052.95—just less than 10% of the total due! Ouch! Doesn’t that leave the patient on the hook for the remaining $19,172.54 (still about $10,000/day, which would be a little hard on most of us)? No, because the next line is the insurance Adjustment, which is the amount that the insurance company miraculously convinces the hospital to forgive. In the end, the hospital charges twenty-one thousand dollars, the insurance company pays two thousand dollars, the patient pays fifty dollars (that’s right, just $50) and the rest just goes away.
The hospital charged over $21,000, the insurance company paid a little over $2000, and the patient wound up with $50.
This would not be true for a cash patient. They would owe the full $21,274.49!!!
Figure 1: Hospital Bill
The first bill is for a patient who spent two days in the hospital, and has private insurance (a Medicare advantage program). Let’s see how the numbers add up. In the bottom right corner is the Account Summary. From the first line, you can see that the total bill came to $21,274.49, or about $10,000/day for two days. (The services leading to that cost are on the left: a couple of $2,500 CAT scans, a $4,400 ER charge, etc.) On the next line is the amount the insurance company paid: $2,052.95—just less than 10% of the total due! Ouch! Doesn’t that leave the patient on the hook for the remaining $19,172.54 (still about $10,000/day, which would be a little hard on most of us)? No, because the next line is the insurance Adjustment, which is the amount that the insurance company miraculously convinces the hospital to forgive. In the end, the hospital charges twenty-one thousand dollars, the insurance company pays two thousand dollars, the patient pays fifty dollars (that’s right, just $50) and the rest just goes away.
The hospital charged over $21,000, the insurance company paid a little over $2000, and the patient wound up with $50.
This would not be true for a cash patient. They would owe the full $21,274.49!!!
While I have no doubt that happens, and more often than we would like, I also know of hospitals and other health care providers that do offer significant discounts to patients with no insurance. For starters there is a sign in the ER registration office of two of our local hospitals stating that uninsured patients can be offered significant discounts, and instructing them to contact the billing department ( at a later time, of course), for details and to set up a payment plan. One time when I commented on that sign the clerk told me the hospital offers a 70% discount to uninsured patients. I have also been told by a couple folks who had lost their jobs and health insurance that they were also offered significant discounts by physicians and hospitals for emergency surgery and care after a traumatic injury.
While hospitals might tend to charge the entire billed amounts to uninsured patients IF they think those patients have the money, they also know that most people don't have that kind of money, and going after these folks via collections, lawsuits or liens is very unlikely to get them their money if they have no assets either. And collection agencies know this too, but that is a whole other issue. So they will be likely to try to get what they can from these patients by offering discounts and payment plans. Not saying that billing department personnel might not try to intimidate or discourage patients from asking about
discounts ( which isjust wrong, IMO), and one might have to ask about it, insist on it, or talk to other people in the department to get it. I've also seen where patients and families were set up with emergency Medicaid by hospital social workers when they claimed they had no money for the bills. We used to see this particularly with South Americans and folks from the Caribbean who came or brought their children to the US for treatment of a life-threatening or chronic condition.
While I have no doubt that happens, and more often than we would like, I also know of hospitals and other health care providers that do offer significant discounts to patients with no insurance. For starters there is a sign in the ER registration office of two of our local hospitals stating that uninsured patients can be offered significant discounts, and instructing them to contact the billing department ( at a later time, of course), for details and to set up a payment plan. One time when I commented on that sign the clerk told me the hospital offers a 70% discount to uninsured patients. I have also been told by a couple folks who had lost their jobs and health insurance that they were also offered significant discounts by physicians and hospitals for emergency surgery and care after a traumatic injury.
While hospitals might tend to charge the entire billed amounts to uninsured patients IF they think those patients have the money, they also know that most people don't have that kind of money, and going after these folks via collections, lawsuits or liens is very unlikely to get them their money if they have no assets either. And collection agencies know this too, but that is a whole other issue. So they will be likely to try to get what they can from these patients by offering discounts and payment plans. Not saying that billing department personnel might not try to intimidate or discourage patients from asking about
discounts ( which isjust wrong, IMO), and one might have to ask about it, insist on it, or talk to other people in the department to get it. I've also seen where patients and families were set up with emergency Medicaid by hospital social workers when they claimed they had no money for the bills. We used to see this particularly with South Americans and folks from the Caribbean who came or brought their children to the US for treatment of a life-threatening or chronic condition.
Figure 1: Hospital Bill
The first bill is for a patient who spent two days in the hospital, and has private insurance (a Medicare advantage program). Let’s see how the numbers add up. In the bottom right corner is the Account Summary. From the first line, you can see that the total bill came to $21,274.49, or about $10,000/day for two days. (The services leading to that cost are on the left: a couple of $2,500 CAT scans, a $4,400 ER charge, etc.) On the next line is the amount the insurance company paid: $2,052.95—just less than 10% of the total due! Ouch! Doesn’t that leave the patient on the hook for the remaining $19,172.54 (still about $10,000/day, which would be a little hard on most of us)? No, because the next line is the insurance Adjustment, which is the amount that the insurance company miraculously convinces the hospital to forgive. In the end, the hospital charges twenty-one thousand dollars, the insurance company pays two thousand dollars, the patient pays fifty dollars (that’s right, just $50) and the rest just goes away.
The hospital charged over $21,000, the insurance company paid a little over $2000, and the patient wound up with $50.
This would not be true for a cash patient. They would owe the full $21,274.49!!!
A MA plan and a traditional insurance plan do not pay claims in the same way. MA plans are horrible, and not really an insurance plan in the traditional sense. This is WHY doctors do not like MA plans....
Insurance companies base their payments on the usual and customary for an area. Had this hospital billed the insurance company at that rate, they would have gotten 100% of that....
My clinic bills at close to that rate, not 5 or more times that rate and the actual reductions are very small, if any. This is not an "insurance company" game, it's a medical provider game.
As for not knowing the costs, it's funny, I can go to my health insurance company website, put in a procedure and boom, there is the cost...hummmmmm. Is there some reason a doctor can't do that too???? Do they not know how to use a website or what is the problem? Now, if I go in for a procedure, that cost is for a typical procedure, if there are complications, I would certainly expect that cost to go up, but then again, common sense is a skill a lot of people just don't have. My latest "major" procedure actually priced out almost to the penny what my health insurance pricing tool had for my provider.
What is the website? I have not had an insurance company make such a tool available to me.
I found this site published by David Belk M.D. who was attempting to find out where the cost is in health care. The excerpt below is from one of his posts that brings absolute clarity to what is going on.
For the average person, this is no small matter. In the first case, a two day hospitalization that the insurance company got for $2,100 (after the insurance adjustment), would cost an uninsured person over $21,000. The adjusted charge ($2,100) would be a pretty nasty kick in the finances for most families, but they could bounce back. The unadjusted charge, which is what you’ll get if you don’t have insurance, is an almost certain trip to bankruptcy."
I spent 5 days in the hospital for a CHF (Admitted to ER with over a 300 BP reading) got out and hospital bill was $42K and change. (This is Legacy Hospital Group WA/OR) I was at the Salmon Creek hospital. So, I get out, get the bill, puke and call "Send us your 1040 form" they said.
I did, the final bill? $0...Yep ZERO but only from the hospital, I still got billed for the doctors..Never paid them, I called asking for a reduction due to being on Unemployment. They refused and so I told them "Take me to court, I'm not filing BK till you do"
What is the website? I have not had an insurance company make such a tool available to me.
Look on your own insurance company website....it's there
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