January 3, 2019

The Cost of ER Care Is Making Americans Sick

A year-long “crowdsourcing” research project highlights the gross over-billing from hospitals.

When the clock struck midnight and Monday turned to Tuesday, it signaled a new year — and, for many Americans, a new deductible to fulfill on their health insurance plan. Those who had the misfortune of needing an ER visit in the first days of last year likely found out a few weeks later that they owed a significant bill that (of course) fell completely within their deductible. It will be no different this year, as it’s a symptom of a serious disease in our health care system.

One Maryland family visited the ER in January 2018 and incurred a $1,375 bill for 10 minutes with a doctor and two generic drugs that totaled $1,075 by themselves. The reason we know about the plight of this Maryland family as well as that of others around the nation is a year-long “crowdsourcing” research project conducted by long-time health policy writer Sarah Kliff for the Vox website.

Kliff, whose original intent in collecting these bills was to study so-called “facility fees” charged by hospitals, ended up with nearly 1,200 of them — tabs from every state in the union, although California led the way. And what Kliff found about “facility fees” and other charges submitted to patients (often after their insurance companies applied the costs to the policy holder’s deductible or copay) would probably fill up a book.

We’ll grant that those who submitted bills to the left-leaning Vox site were likely ones who advocate for a single-payer or “Medicare for All” system — so perhaps this sample was more extreme than most people have to endure. Moreover, shifting payment from patients to taxpayers won’t do anything to reduce costs; in fact, remitting them to the bottomless well of taxpayer money will only further enrich those who are already profiting from the system unless the costs are placed under control, and Congress has been loathe to cut costs. For example, it’s been up to the Trump administration to pitch ideas that would curtail payments to Medicare providers.

Providers would argue that the primary reason ER prices are so high is that sufficient staff and resources need to be on hand to deal with any and all emergency situations, whether a significant event with multiple victims and a variety of injuries like a school-bus accident or someone’s simple case of the flu. Even when no one ends up walking in the door, these professionals have to be paid and supplies kept in stock — hence, markups and “facility fees” are necessary to minimize financial losses from non-paying patients. And while insurance companies hire their own auditors who are familiar with the health care profession to check large-scale medical invoices on admissions that run into the high five or six figures, the average ER visit that’s a couple thousand dollars doesn’t receive that sort of scrutiny. It’s only because these patients have shared their hospital bills with Kliff — bills that created a database for her research — that we’ve learned about the extent and range of these “facility fees.”

A portion of the Vox lament is already being addressed in rules published by the Trump administration over the summer. As of Tuesday, hospitals — which just a few weeks ago were “concerned” and “unsure” about how they would meet this deadline — are now required to post online their “standard charges” for various procedures.

However, these come with a caveat: As one of this author’s local hospitals warned, “The information provided … is a comprehensive list of charges for each inpatient and outpatient service or item provided by a hospital, also known as a chargemaster. It is not a helpful tool for patients to comparison shop between hospitals or to estimate what health care services are going to cost them out of their own pocket.” Nor is it very convenient in an emergency situation such as many families face during a year.

These reforms and the advocacy created by the Kliff research spurred Congress to begin action in the last session, and while nothing made it out of the 115th Congress, the new Congress with its partisan split may see this as one issue both sides can tackle by mandating hospitals to be more transparent about costs up front. It would be our preference for the free market to handle this, as people need to have the information available to them to make a more informed choice. After all, savvy hospitals may market this drive toward transparency as a way to appear more family-friendly and bring in more patients to their networks and clinics for the non-emergency and preventative-care visits for which they can more easily plan and have the proper personnel and supplies available — perhaps preventing future ER visits.

Even the government knows being able to plan care would be a good way to drive down its cost.

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