The 2020 election season on the horizon, and one of the most important issues will be how candidates define the future of healthcare. On one side, we have the Republicans, who at all costs aim to repeal the Affordable Care Act (ACA) with no explicit plan on how to replace it. The Republicans fail to acknowledge that the unregulated and uncontrolled healthcare system that existed prior to the ACA was troubled by shameful access to affordable healthcare and that the cost to deliver sub-optimal care was rising at a rate that threatened our economy. Although the ACA has not stopped healthcare from becoming more expensive, it has undoubtedly slowed the rate at which those costs are rising.
On the other hand, we have the Democrats, who are mostly pushing universal healthcare or what many call “Medicare-for-all,” which moves beyond the ACA towards a national health plan. While this may be the direction that as a nation we need to take,, the Democrats need to do a better job of selling it. Individuals must realize that a universal healthcare system is not free healthcare. Republicans and opponents of a universal healthcare system often argue that the government is inefficient and wasteful when managing funds for social services. Moreover, they promote letting free market economics govern healthcare as if unrestricted capitalism is the only answer to any problem. The fault in this reasoning is that, unlike other markets, patients often do not get to make decisions about the healthcare they ultimately receive. Nothing illustrates this better than a basic emergency department (ED) visit. The interventions and diagnostic testing are rarely, if ever, within the patient’s control and often the tests selected are for the benefit the ED physician (eg, defensive medicine) or the facility (ie, profit driven).
Patients cannot shop around for a better deal, and they are almost never presented with the cost of care prior to receiving it. Rather, patients find out after the fact, when they get the bill.
So, imagine that your air conditioner (AC) stops working and no one is willing to give you an estimate to repair it. In fact, the AC repairman does whatever he feels is appropriate, at whatever cost, and you get stuck with the bill. No one in their right mind would say that this is free and fair competition; that is not free market capitalism. Yet, that’s exactly what opponents of universal healthcare are arguing in favor of.
National Public Radio (NPR)’s Terry Gross interviewed Sarah Kliff, senior health policy correspondent on Vox.com, about the unexpected costs that arise from an ED visit.1 Ms. Cliff has looked at ED bills from thousands of patients and found some astonishing practices. For example, some individuals were being charged $76 for bacitracin ointment, which costs $4.99 at CVS. In other cases individuals were charged $5000 for an ice pack, and $629 for a Band-Aid®. In each of these situations, an individual presented to an ED for fairly straightforward care that was provided at an astronomical cost. Probably one of the most eye-opening discussions was that of the $629 Band-Aid. In this example, a young girl was taken to the ED by her parents for a minor finger injury requiring only a simple Band-Aid, which typically costs 20 cents. The parents got a bill for $629. Of the $629, $7 went towards the Band-Aid, which is in and of itself a 3500% markup. The remaining $622 went towards the hospital’s “facility fees.”
There’s something a bit ridiculous about charging $622 for walking through a door. Any consumer, having a reasonable choice between paying $7for a single Band-Aid or walking across the street to a CVS and paying $5 for an entire box of Band-Aids would walk across the street and buy the box. However, as a patient in the ED you are rarely given that choice. Second, the $622 facility fee is arbitrary. Hospitals often argue that this is the cost of keeping the ED running — staffing it, maintaining inventory, paying for electricity, etc. Yet according to Ms Cliff, that facility fee is not the same for hospitals of a similar size in similar locations. In fact, it can vary widely from a couple hundred to several thousand dollars.
This ought to give us pause as to whether those facility fees really reflect the cost of keeping the doors open. Some might argue “Well that’s why you get health insurance.” However, even with health insurance these costs can be staggering. For example, I recently saw a $12,000 bill for a patient who spent 3 hours in the ED. Even if the insurance covers 75% of the bill, that’s still an unexpected $3,000. Furthermore, 14% to 26% of patients with insurance are charged for out-of-network providers or procedures.2 This is because of the fragmented nature of our healthcare system. While they are at a facility covered by their insurance plan, patients may be seen by physicians who are out of network and may undergo tests and procedures not covered by their insurance plan. Patients aren’t privy to these exceptions until after the fact, when they get a massive and financially crippling bill.
These are just a few examples of how our fragmented healthcare system is rewarded by being allowed to run amok and profit from its own dysfunction. Patients, ie, the consumers of healthcare, have little if any legal protections against egregious business practices. But maybe not for long. Representatives Frank Pallone (D-NJ) and Greg Walden (R-OR) have proposed a bipartisan bill that would require health insurers to treat out-of-network emergency care as in-network. The bill would also require that insurers pay out-of-network providers a minimum payment based on what they pay their in-network providers. Finally, it aims to prohibit providers from charging patients the difference between what the provider wants to be paid and what the insurance company is willing to pay.3
This is the kind of bipartisan policy we need. While this bill doesn’t come close to solving our healthcare woes, it is a major step in the right direction. While universal healthcare seems promising based on the wide success such systems have had in nearly every other developed nation in the world, it is unlikely to be the only solution. Like the proposed bill, we need more elected officials to work together by objectively reviewing facts and data rather than entertaining rhetoric based on anecdotal and often false narratives. Maybe then we might find ourselves developing innovative alternative solutions. In the meantime, we ought to go with what works instead of reverting back to policies that promote the prohibitive healthcare cost trend of previous years.
- Gross, Terry. Why an ER visit can cost so much — Even for those with health insurance. NPR.org. [Online] March 13th, 2019. www.npr.org/2019/03/13/702975393/why-an-er-visit-can-cost-so-much-even-for-those-with-health-insurance. Accessed May 29, 2019.
- Kassraie, Aaron. 1 in 7 patients get a surprise hospital bill. AARP – Health Insurance. AARP. April 1, 2019. www.aarp.org/health/health-insurance/info-2019/hospital-patient-bills.html. Accessed May 29, 2019.
- Scott, Dylan. Exclusive: the new bipartisan House bill to stop surprise medical bills, explained. The bipartisan push to end surprise medical bills is ramping up. VOX. May 14th, 2019. www.vox.com/policy-and-politics/2019/5/14/18622825/surprise-medical-bills-trump-house-health-care-legislation. Accessed May 29, 2019.
This article originally appeared on Medical Bag