So I started writing a column about some of the things you need to know getting the most out of your medical care, but after discussion with a few of you, I found that the questions I was answering weren’t really the ones you were asking. So I will start by answering a bit more in depth, some of the issues that have come up. Please share any knowledge you have in the comments and ask more questions.
Why can’t anyone tell me what my procedures and appointments cost?
Here’s how the system works: Hospitals and providers contract with insurance companies for set prices for each level of appointment or procedure each of which is identified by a billing code. These negotiated amounts are dependent on market saturation of insurers and hospitals and vary insurer to insurer, and within that, plan to plan; and hospital to hospital. Generally speaking, insurers will pay a percentage of the amount billed. Some insurances have contracts with hospitals so that you don’t get billed for any balance after they pay. Some pay 80% and you pay the rest. But in most cases it’s the rest of what the insurance company would have paid. So if you have procedure A, which the hospitals bills (full price) as $5000 and your insurance pays 80%, that’s a balance of $1000. BUT! The contract that your insurance plan has with the hospital may cause the ‘full price’ cost to be $4000 (80% of cost) of which they will still only pay 80%, which is $3200, leaving you will an $800 bill instead of a $1000 bill. Or, if you have really good insurance a $0 balance as they may be contractually prohibited from charging you the balance. This means, theoretically, that the hospital takes a hit. This hit can be mitigated by billing different amounts to different insurers and having uninsured or under-insured people pay full price.
Now, the really complicated thing is that the specifics of this complex billing vary not just from insurer to insurer, but plan to plan. One person’s Aetna or BC/BS coverage is not the same as another’s. Now add another layer of complexity by going ‘out of network’: your insurer has no contract with the hospital or provider, which generally means they will bill the insurance company the full price amount which is then reimbursed by them at a lower percentage, if at all. But, maybe not. Because they may actually have a contract with your insurance company for some insurance products, just not yours. In that case, you may get billed a ‘courtesy rate’; the discounted rate that they bill the company on products for which they have a contract. So, say you are covered 50% of out of network costs. If there is no ‘courtesy’ discount, you will get billed the whole $5000, of which the insurance company will pay half. If there is, you may get billed the $4000 or any amount in between. There is often no formal, written rule about this, resulting in yet another layer of complexity and obfuscation.
If you are uninsured, you will be billed full price. But you may be able to get a discount. The discount will vary from hospital to hospital and may take your income into account. Or not. And some providers are more willing to negotiate than others. I’ve known physicians who have treated uninsured patients for free – thousands of dollars worth of services out of the goodness of their hearts. I’ve known others that have sued them for the bills. Total crapshoot.
And that’s basically why it takes an act of God to tell you how much your procedure will cost you.
How can I make sure I’m using in-network providers?
Theoretically this should be simple: You go to the website, you punch in your plan number and a list pops up. But it’s a tad more complicated than that. If you are at a small hospital and have an operation, you know to choose a surgeon in your plan and make sure the hospital is in your plan. But what about other providers? The anesthesiologist and the pathologist? At larger hospitals these providers are generally on staff and their costs are generally, with few exceptions, billed through a physician billing service that has the same contracts as the hospital. But in smaller systems these may be doctors who are credentialed to see patients at the hospital, but bill and negotiate contracts with insurers independently. In addition, the effort and cost of becoming contracted with insurers for a solo practitioner or small practice is often more trouble than it’s worth, which means they may very well be out of network. Biopsies may be sent out to a lab that may or may not take your insurance. These are things that, shockingly, you will not be told in advance. In addition, the hospital may have a contract with a lab that does not accept your insurance and will be unwilling to send lab work or biopsies elsewhere because they contract with a particular lab.
Sadly, the onus is on you – the sick, anxious patient to contact the hospital to ask about all possible billing sources and then to check with your insurance company to make sure they are covered. This is, of course, impossible in an emergency. If you break your leg, you’re sure as heck not going to be vetting the lab, the radiologist and the orthopedist. Again, it’s less of a concern in a large, urban teaching hospital where the providers may bill separately, but generally have all the same contracts as the hospital and all lab work and imaging is done on site. But out at East Potato Patch General in Idaho? More likely to be a fragmented system with few on-site staff, labs or specialists.
Why do I have such shitty insurance?
Because you get it through your employer who wants to spend as little as possible. It’s one of the reasons there are so many different plans even from the same company. Microsoft, with its thousands of employees gets a better plan for less money than Joe’s Tackle and Bait Shop with its 20 employees. Larger numbers of covered people lowers the overall risk for the insurer, resulting in lower costs to the employer per employee. One person with an expensive diagnosis at a huge company is a blip on their bottom line. In a 20 person company, it’s an obvious outlier. Therefore, Joe’s Tackle and Bait, with fewer resources and higher per person costs, buys a cheaper plan with more restrictions and fewer benefits. And if someone at Joe’s Tackle and Bait gets cancer, the insurance company may not renew their contract. Also, Joe is probably negotiating with the insurance broker on his own; a large company will have benefit specialists who know what to look for in the policies.
Of course, insurance companies are supposed to be pooling risk from all its clients, not just across one company. However they are not forced to do this and ultimately their bottom line is to maximize profit. I repeat: health insurers’ priority is to maximize profits, not to help you or make the world a better place.
Future installments will include how to pick a primary care provider, the various types of providers, how to work with difficult providers and other topics to help you navigate our insane healthcare system. Please feel free to ask more questions, share your experiences and knowledge and suggest further topics in the comments.
