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- More states should pass laws requiring insurance companies to negotiate on behalf of their enrollees when people receive emergent care out of network.
- Legislatures should also consider capping how much hospitals and doctors can charge uninsured patients—how about something less than twice what Medicare would pay for the service?
When Jimmy Kimmel’s child was diagnosed with a serious heart condition, Kimmel realized that people without his wealth (or his generous insurance coverage) would not be able to pay for the life-saving care that his child received, if their children were to be similarly ill. So he gave a moving monologue one evening, explaining why he now believes that healthcare policies should be judged by whether they keep finances from being a barrier to receiving lifesaving care, a view that some now call “The Jimmy Kimmel Test.”
Kimmel’s monologues on this topic have gone viral, but it doesn’t look like hospital ERs have gotten the message. Too often, they charge patients outrageous prices for their services, especially when people don’t have insurance.
Do you think these hospital ER prices are irrelevant for you, because you have insurance? Think again.
Suppose you are on vacation when your diabetes spins out of control. Or you are shopping at a local mall when you have a fainting spell. You are rushed to the nearest hospital by an ambulance crew to an emergency room, where you get an IV, an EKG, and other state-of-the-art care. All is good, until you receive the bill.
According to a recent study, if you happen to receive care in a for-profit hospital emergency department that’s out of your insurance network, you can expect a bill that’s almost six times higher than what Medicare would have paid for those same services. Did you get an EKG? Medicare would have paid $16 for that test. Your bill could be more than $300, a bill that you will have to pay, not your insurance company.
These hospital emergency room estimates were published by a research team out of Johns Hopkins that got hold of national data on physician fees. Fees are not only what doctors charge for their time, but also what they charge for tests and procedures that they order (essentially, medical care that is not included in hospital bills are lumped under the category of “physician fees and services”). The researchers examined how much healthcare providers charged for a wide range of services, when patients were either uninsured or “out of network” (meaning no insurance company had negotiated the fee). The researchers analyzed what factors were associated with high and low prices. Here are some of their findings:
- Emergency room fees are marked up way more than fees from internal medicine offices.
- On average, internists’ charges were double those of Medicare.
- But emergency charges were 4 fold higher.
- For-profit hospitals marked up their prices significantly more than non-profit healthcare systems.
- Non-profits charged about double Medicare fees.
- For-profits charged almost 6 times more than Medicare.
- The more uninsured patients a hospital saw, the more it marked up the cost of emergency services.
- The “little things” were more marked up than the big ones.
- Critical care was marked up only 4 fold in emergency rooms.
- IVs, EKGs, and the like were marked up more than 6-fold.
- Some places, especially ERs, marked prices up almost 10-fold.
Here is a picture comparing internal medicine prices to those found in emergency departments.
What’s going on here? With no one to negotiate prices, ERs in particular charge outrageous prices for their services. You could argue they are trying to make up for all the people who don’t have insurance, and thus won’t be able to pay their bills. But if you jack-up prices that much, you should expect more people to default on your bills, and that is going to force you to drive prices up even more. That’s pricing insanity.
You could say these charges are not what most people pay, since they often work out payment deals at lower rates. But that means people who are poor negotiators, or who don’t realize they can negotiate these prices, will be at an unfair disadvantage. What kind of healthcare system allows this to happen?
If Jimmy Kimmel is on a family vacation and his son becomes sick, he has enough money to afford whatever outrageous amount the nearest emergency room charges for treating his kid. But most Americans don’t have Kimmel’s wealth. We need legislation protecting patients from price gouging. More states should pass laws requiring insurance companies to negotiate on behalf of their enrollees when people receive emergent care out of network. Legislatures should also consider capping how much hospitals and doctors can charge uninsured patients—how about something less than twice what Medicare would pay for the service?
