Reducing medical debt
This summer, Sam, my oldest son, had appendicitis. Like all doctor’s kids, his diagnosis eluded me. Until, three days into his pain, when his brother Seth said, ‘Papa, Sam is hurting. You need to check on him!’ Sure enough, his exam was worse than before. After labs and a CT scan, we found that his appendix was behind his colon, and needed to come out into the light of day.
His care was great. I’m still singing the praises of Dr. Pete Gilbert and his nurse Lori, of Oconee Memorial Hospital, for the care they gave my first-born boy. He was back on his feet in two days. He never had any hint of infection. I couldn’t have asked for more. My son was healthy and back to normal.
Looking back, our experience was a wonderful one. And it gave me a lot of insight, not only into how it feels (once again) to have a sick family member, but into the economics of medicine.
Now, Sam was in the hospital for a little less than 24 hours, door to door. He had a CT scan and surgery, antibiotics, pain medication and IV fluids. He had all the things that go with it, including dressings, etc. His hospital bill (minus surgeon’s fee) was around $20,000.
I am not complaining. Please don’t get me wrong. I’d be a hypocrite if I said it was a ridiculous bill. I’m thankful to God above for my job and the insurance I have that helps me to care for my family, both in crisis and in maintenance of things like Seth’s Insulin pump.
But, something occurred to me about the bill. Let’s face it, Sam probably didn’t get $20,000 worth of care, medication and supplies. But what Sam did do is cover his surgery, and maybe three or four others. I can believe he received $5000 worth of care. It seems reasonable. So really, his surgery paid for his own care, and about $5000 worth of care for several others.
Now, why don’t we just acknowledge that? In the Torah, we read the concept of the ‘Year of Jubilee.’ A year in which, in ancient Israel, debts were forgiven. Why don’t we do this, honestly, with medical bills?
See, I can pay my bill. But the guy working for minimum wage will have a hard time. Fortunately, my son’s bill paid for his son’s bill. So let’s be up front and write his off! I mean, we talk about how much debt people and hospitals are in. But are they? If every bill is a bill inflated in order to cover other bills, what’s the real debt?
I’m not saying we have to write off every bill. Money has to come in, so that the system will continue. And most likely, profit has to be made. It’s unrealistic to envision a system of medical excellence in which the organizations and workers can’t work hard to make more money. We demand excellence in our technology. We become angry when our computers give us problems. Do we really want a system of mediocrity in health-care?
But we need to be fair and just. In the book of the Prophet Micah, Micah says, ‘He has shown you, oh man, what is good. And what does the Lord require of you but to do justice, and to love mercy and to walk humbly with your God?’
I think we could be more just, and more merciful to the uninsured by reducing their inflated debt to a more reasonable actual debt. And since the insured already bear the weight of the uninsured, why not be honest about it and write off some debt? It seems a way to avoid a truly socialized disaster, by applying something that would keep government involvement at bay, and still ease the weight of health-care costs for those who really can’t afford them.
It seems a simple thing to me; but I’m a simple-minded guy.
Edwin
Most hospitals do write off the bills for the uninsured. Ask your hospital’s CFO — you may be surprised.
A typical scheme may be:
Income
Dang. HTML got me.
Income less than Federal Poverty Level = 100% discount
Income less than 200% FPL = 75% discount
Income less than 300% FPL = 50% discount
Income less than 400% FPL = 25% discount
And sending patients to collection generally yeilds almost no revenue and lots of bad PR, so our facility rarely bothers.
A better question might be why someone at 400% FPL only gets a 25% discount when insurance companies and medicare patients get much steeper discounts…
I think your idea could be easily tied to the Mary Bono bill allowing deduction of uncompensated debt (add to the bill debt forgiven)from Federal income tax for docs and hospitals under EMTALA.
You’re right, collections for those folks are generally worthless. However, there are a few who probably should be pursued, who know what they’re doing, refuse to pay, and still buy nice trucks, etc.
Edwin
Your comment about the Mary Bono bill is absolutely the way to go. The federal government is unfortunately not going to be very willing to make that happen. The uncompensated care that occurs as a result of EMTALA is a strong motivator in the steady rise in health care costs as people abuse the system. I had a patient just last night who told me, when asked if she had a primary physician, “I just use the ER, so I don’t have to pay for insurance”. Perhaps when patients begin to realize the true economics of health care, the bill may have a chance.
As an FYI, I have a friend who is about 30. He’s been paying off his bill for having his appendix removed for 5 years now. He’s single, and doesn’t make a lot of money (and had no insurance at the time of the surgery).
He had bad stomach pains and was told his appendix needed to come out. During the surgery to remove it, the surgeon realized that the appendix did not have any signs of needing to come out, but they removed it anyways. They also realized while they were doing the surgery that he actually had an instestinal issue, which was causing his stomach pain.
His bill was $26,000 for surgery and observation/antibiotics over a total of 2 days.
He tried hiring a lawyer, but after seeing several, they all said pretty much the same thing; “Because the doctor was acting in your best interest in recommending your appendix come out, you can’t sue him.”
If he continues at the rate he has been, he’ll finally have the unneeded surgery paid for some time next year.
Good ideas. Do the “hospitals” really know and would they admit what the actual cost of a 24hr/appy/CT/etc is? Discounts, yep, why charge $111 for an ultrasound when Medicare recognizes $27 as an adequate/appropriate/”all I Will pay” amount. System’s out of balance!
Well, I guess Hell must be on the verge of freezing over: Shadowfax and I are actually singing from the same page on this. One of the functions I perform at my hospital is to approve applications for just the kind of program that Shadowfax outlines, and our policy (and scale) is pretty much as he describes.
Despite being the soulless finance guy, I actually give away a good bit of care this way (many millions of dollars worth). And, as much as I enjoy persecuting widows and orphans, it really isn’t good business to authorize collection activity for people in genuine financial difficulties.
This is standard practice for most community hospitals.
I dont even remember how i reached your site but it doesnt matter, cause i’m so happy i found it, it really made me think, keep up the good work
de, – Sunday, February 22, 2004 at 11:47:29 (PST)
It would make more sense if hospitals ran their businesses like businesses. The reason your computer does not cost $20K is because of market competition. You, as a consumer, know how much a computer costs before you buy. If the price is too high, you go to the store across the street. That is why computers are high quality items at low prices. As a result, even poor people can afford one. Imagine if hospitals all had price lists. They could not just charge whatever. They would have to make sure their fees are competitive. Socialized medicine designed to help the poor is always expensive as you pointed out because patient A pays B through Z’s bills. A better approach is to charge each patient an affordable fee, so that more money is made and less money needs to be collected.
Gary,
I completely agree! Run for office! I’d be happy to practice that way, because I know I could make a decent living and charge a fare rate to all. And charity would be far easier than it is!