Let the Buyer Beware
Healthcare comes at a cost, are you aware of the financial side effects? Whether you’re a consumer or a provider of healthcare are you aware of the hidden costs not covered in your health plan? Healthcare is one of the only businesses where the consumer accepts a service without knowing the potential financial costs that could be associated with it. The inflating cost of healthcare in the U.S. leaves only a select few with the ability to afford it.
Although I’m certain there might be exceptions, healthcare is the only business sector that I’m aware of where the consumer agrees to accept a service without having a clue as to what financial cost they might be facing. To illustrate the point, here are two examples that I stumbled across in the Advisory Board Blog.
The first example involves an unfortunate man with late stage idiopathic pulmonary fibrosis (IPF), a chronic inflammatory disease of the lungs that leads to inexorable scarring of lung tissue and loss of pulmonary function. Five-year survival is in the neighborhood of 30% unless the patient is able to obtain a lung transplant. Our example patient, who was on a transplant list, experienced sudden, severe pulmonary decompensation and was transported by ambulance to a community hospital near his home on full ventilator support. He remained there in the ICU for four days before being transferred by air ambulance to UCLA Medical Center. Within 48 hours of his arrival, a pair of lungs matching his tissue type became available, and he underwent a successful transplant.
At that point, the patient suddenly exchanged his medical problem for a financial one. His health insurance policy fully covered his initial hospital admission including ambulance transport, his entire stay at UCLA Medical Center including surgery, and his lengthy postoperative care and recovery. However, he subsequently received a bill from the air ambulance service for $51,524.59. This figure was greater than the entire cost of his surgery. His insurance agreed to cover some of this charge, but he was still left with a balance of well over $11,000. The air ambulance service was not a part of his insurer’s network and was free to pressure him for the entire balance, which they attempted to do. They continued to pressure the patient and even his adult daughter for the balance up until they got some bad publicity from local TV news coverage. At that point the remaining balance was forgiven.
Our second example involved a very unfortunate lady who suffered a string of tragedies beginning with her husband’s suicide followed quickly by the death of her father from cancer and ultimately by the loss of her mother with whom she had been very close. She became profoundly depressed, she began to drink heavily, and ultimately family and friends felt that she was at high risk to harm herself. Fortunately, she agreed to be admitted to an inpatient psychiatric facility where she responded very well to therapy. She was discharged after five days, stopped drinking, stayed on her medications, and continued outpatient counselling.
Unfortunately, this example of appropriate treatment with a good outcome turned to a financial disaster for the patient. The patient’s final bill came to nearly $30,000. However, her insurance, which was obtained through an Association Health Plan (AHP) did not include coverage for psychiatric illness. Under the terms of her contract, the entire hospitalization, including emergency department care was deemed a non-covered episode and was disallowed in its entirety. A complete discussion of AHPs is far too complex for this small space. What’s important to know is that many AHPs were disallowed under the Obama administration because they were felt to lack sufficient benefits. The Trump administration reinstated many of these plans in an effort to make affordable insurance available to larger numbers of people. The problem, of course, is that unless the terms of the policy are explicitly described in plain language, very few people really understand what they’re buying. Had the patient in this example fully understood the details of her coverage, she might have been able to shorten her inpatient stay and continue with outpatient treatment at a much lower cost.
The point of these stories is to shine some light on a problem that I believe has been hiding in plain sight far too long. Over my lifetime, first as a consumer and ultimately as a provider of healthcare, I’ve seen our system of delivery devolve from an honorable calling answered by dedicated professionals into a beleaguered band of burned out souls wondering what became of their mission. We are beset on all sides by suffocating regulation and time-devouring electronic health records while insurance companies, equipment manufacturers, pharmaceutical giants, lawyers, and bureaucrats pay their CEOs more in one year than a single nurse will earn in a lifetime. All of this has the effect of inflating the cost of healthcare in the U.S. to a point where few can afford it. The problem has been swept under the rug all the way back to the Johnson administration, if not further. We are at a tipping point and something needs to change if we are to avoid a crisis.
Ideally, when I write about problems in this space, I like to offer solutions. But this problem is far too massive for me to know even where to begin. I hope this blog will have the effect of stimulating conversation. You can post your comments below. I look forward to hearing what you have to say.
To read more of Dr. Randy Cook's blog "The Script Pad" go to https://mymdcoaches.com/blog. Dr. Cook is also host of MD Coaches, LLC's weekly Rx for Success Podcast found at http://rxforsuccesspodcast.com.
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