An Ordinary American Healthcare Billing Story

I will preface this by saying two things:

  1. This story generally ends well.
  2. Its unremarkability should be the portion of most concern.

My wife had an unexpected surgery in April. She woke up feeling fine one Wednesday morning, but by late morning was experiencing severe abdominal pain, and by the afternoon was in the ER. It turns out she had a benign tumor that we already knew about, but that had died and in the process put her into sepsis. We were blessed with an excellent surgeon, and by Friday, the problem was removed. She made it home the following Tuesday and recovered as well and quickly as one could expect.

We live in the state of Georgia in the United States of America. Georgia, like most Southern states, is pretty weak on consumer or labor protection. We have great insurance by American standards through United Healthcare (UHC) that I pay for through a small business group plan. (I’ve been in the “open” “healthcare” “market” for 18 years, so I saw the positive changes ACA brought without being insulated by my employer’s choices.) For just around $12,000-$14000 a year (and climbing annually), we get to pay negotiated rates for health care and get to have very expensive things covered.

That’s good news for us, because the base hospital bill was about $125,000. That didn’t include the ER visit, the follow-up ER visit for pleurisy, the separate charges for the surgeon’s services, pathology, or the lab work. Each of those showed up as separate claims on separate bills. In the classic American fashion, we just ignored the first bills and waited for the insurance company to work everything out.

Eventually, we got some bills that had numbers that looked right. A few hundred here, a couple thousand there. By then, the businesses who wished to be paid were becoming impatient and were sending “Past Due” and “Final Notice” alerts. We paid some of them and were about to pay another one tonight when I said to myself, “wait a minute”.

I noticed that one final notice bill in particular seemed off, the one for the original ER visit that got her admitted. It was full price, yet I know that something should have been covered. I went to UHC’s web site and tracked down the claim. Sure enough, United had never paid. I decided to get on the phone and give the billing department a piece of my mind.

When I called, they connected me with a “billing advocate”, who appeared to be someone who worked to explain the billing labyrinth of our particular system to the consumer. What I found out made me more convinced that we’re being ripped off at a trillion dollar scale by a system that has all the bureaucracy, twists, and turns that Republicans promise you government will provide, while at the same time providing none of the efficiencies that private businesses should have.

I took the 2 inch high stack of bills and picked the ones I needed the most guidance on. The billing advocate helpfully explained to me each claim I had questions about. I learned that there were four distinct patterns of payment happening:

  1. You visit an in-network provider. If you’ve met your deductible, then just about everything is covered, though you may be responsible for the euphemistically-named “coinsurance” up to your out-of-pocket maximum. These bills work the way that insurance promises. They negotiate a steep discount to the rack rate, they send a check for part of it straight to the provider, you get a bill for whatever’s left, you pay it.
  2. You visit an out-of-network provider, like a physical therapist or specialist you like that doesn’t take your insurance. The insurance company recommends an amount they think the service is worth and counts that toward your out-of-network deductible, tallied separately from your in-network one. In states with consumer protection, the provider must charge this amount to you. In states without it, providers can do what’s called “balance billing” and charge the rack rate. If you’ve met your deductible, some really nice plans pay about 70% above that with no out-of-pocket maxium. That deductible for me is $10,000, but for others could be as high as $45,000.
  3. You visit an in-network provider, but the insurance company needs documentation to prove the claim. The provider is supposed to hold the bill until the case is closed and the documentation they are contractually obligated to provide is sent, but they may choose to bill you anyway. If you don’t pay, it can get sent to collections and mar your credit score.
  4. You visit an in-network provider, and the insurance company pays, but the A/R and A/P departments don’t talk to each other properly. The provider bills you for the full amount. Just as in scenario #3, your choices are pay or get your credit damaged.

Most of the bills I received were scenario #1. We paid small or medium balances, and sometimes, after we met our deductible, everything was covered.

One bill we paid, for pathology, was scenario #2. Here’s the catch, though: patients don’t choose their pathologist. The surgeon does. And if you’ve ever asked a surgeon, you’ve found that are focused on how to do their job and heal people and have no idea how any of the billing processes work. The choice of internal medical providers at a hospital is affected by our patchwork insurance coverage system, so it’s tantamount to trying to pick a business based on who’s related to your spouse’s cousin without asking your spouse or your spouse’s cousin. If you get it wrong, you don’t get the discount. So we ended up paying over $1,400 because the pathologist that happened to receive my wife’s specimens wasn’t contracted with UHC.

The bill I was suspicious about was scenario #3. They did not provide the documents to the insurer, and they were not supposed to bill us, but they did anyway. Like any reasonably fiscally sound household, nothing puts us on notice like a Final Notice. I was prepared to pay the entire amount, over $1,200, just to get them off of my backs. It turns out we don’t owe them a penny, at least not yet.

The bill was for the surgeons was scenario #4. The surgeons were in-network, and that bill was a little over $9,000 before discounts and insurance payments. There was a mixup with the documentation, and so there was a delay in payment. UHC eventually settled with them for a little over $5,000, which was intended to cover the entire amount owed for that particular bill. Despite this, the physicians group charged us a little over $2,000, with about 15% off for paying all at once. So now we have to call them and figure out how to get our money back.

There are people who have lost their credit, their homes, or been driven to self-destruction over health care in our country. So why does this particular story matter, where a person with the means to absorb a couple of four-figure shocks to their bottom line is deeply inconvenienced, but not severely damaged?

It matters because my story is completely unremarkable. I’m just a regular, middle-class person earning a decent income in technology, and I pay five figures a year after taxes just to keep my health insurance discount plan. When a crisis like this happens, the resulting bill resolution is harder than doing my taxes, and I have two LLCs to report for. We are at the mercy of organizations that have no financial incentive to help us or to fix the arms race of service pricing that leads to a six-day hospital visit costing over $100,000.

What I didn’t talk about is how we wait in the ER with people we love, not for a medical provider with reassurance that your loved one will be healed, but for a billing coordinator who tries to see if they can get some money out of you that day, while your loved one is still writhing in pain, before they know if they can help. I didn’t talk about the food that was not only poor tasting and built off of what seemed to be a 1940s food pyramid, but also the opposite of what someone needs to heal. Fried pork chops for back surgery patients with a history of high blood pressure, like my father. Creamy dairy-based soups and low-quality ice cream for abdominal surgery patients, like my wife. I also didn’t talk about how I send my wife into hospitals in my Princeton University paraphernalia so that they will look twice and not dismiss her in her Blackness or in her womanhood, or how I’m sure to call all the drugs by their technical names when I’m talking with the doctors. These tricks are derided by people who think it’s about trying to achieve respectability. No, it’s about reminding medical professionals that we are people and not stereotypes, that we feel pain to the same degree as them, that we matter. It’s about survival.

None of this has to do with the thousands upon thousands of dedicated nurses, doctors, medical professionals, and support staff that genuinely do their best to do no harm and to help where they can. They did not set up the Byzantine billing systems or the complex rate tables. They did not pass the policies that leave your quality of care up to your ability to find a generous company or to create a company with multiple employees. They are not the ones that watch the rest of the industrialized world produce better health outcomes and longer lifespans on half of the budget we spend, even with public and private systems existing in tandem, and don’t lift a finger or a Congressional bill to do anything about it.

It’s beyond the scope of this post to unpack the reasons why we in the US are so satisfied with a system that produces objectively worse outcomes in many areas at a much higher cost. But with the generosity of employers wearing thin and laws in many states providing less and less protection to workers and patients, we’ve got to do something about this. Whatever your politics are, if you are of ordinary means and satisfied with the costs and processes of our health care system as it is, I can assure you it’s because you’ve never properly exercised it.

Anecdotes from The American Healthcare Front

teacher-kidney.jpg
Teacher at exit ramp looking for a kidney donation

I have some issues with my ears periodically, and over the past week, it felt like one was developing a minor infection. It felt full a lot and started to become painful. I knew that I was going to need to give it some medical attention. I thought about going to my primary care team at Emory, formerly Harken Health. In the Harken days, primary care appointments were included in your insurance and you could schedule to go by any time. They also managed patient load so providers would have time to develop relationships, and they partnered with health coaches that could deal with the para-medical stuff so the medical pros could focus on things requiring their specific skill set. Now that Harken’s gone, Emory still has great staff, but works like a regular doctor’s office – scheduling visits always takes a few days, visits are shorter, and the health coaches, where they exist, are swamped and can’t give the individual attention my Harken coach gave.

The ER was out of the question, that’s a minimum of $2K spend and a distraction from people who need truly urgent, serious care. (Don’t believe me? Stop by an ER and try it for yourself. A friend of mine had stress-related chest pain due to the amount he was working and how little pay he was receiving to cope with the other stressors in his life and got slapped with a $5K bill.)

Urgent care is probably the best option, but that was going to run me a bit as well. Not too much, maybe a hundred or so. But of course I already pay several hundred a month for insurance, so that’s frustrating that my insurance is really more “hit by a bus” insurance than health care.

I ended up repurposing some antibiotic ointment I had for a recent eye injury that unequivocally required a doctor’s visit (that I’m sure I’ll get a hearty bill for soon), and it worked. I’ll keep at it for a few days to make sure it’s good.

Now, I have the means to get decent health care, even if it’s not convenient and a little pricey. What are people who have no flexibility in their schedule doing? What do you do when taking a half-day off work means you may be eating ramen next week, or nothing, because you’ll be fired “at-will”? And what happens when you face a real challenge that’s out of your control, like the teacher above who needs a kidney to live? If he can find the kidney, he will probably have decent health care as a state employee, but what if he didn’t have great insurance? Who would pay for that?

Those who support interdependent community do ourselves a disservice by allowing Medicaid for all, or any of the other public options, to be portrayed as an altruistically valuable but optional program, a gift to the neediest among us. It’s not a matter of kindness and convenience, without which life would be a little less pleasant but still bearable. People are choosing between medical bills and house payments, between medical bills and food. And it doesn’t take a significant condition or a bad decision.

We in the middle class especially make the mistake of thinking that we are where we are because of good decisions. The rich are lucky, sure, accidents of birth, right place, right time, but not us. We scrimp and save. We plan. We forego instant gratification for the long term, and look at our lives as a result. If we can do it, anyone can.

The truth is, we make the same bad decisions as the poor all the time. We buy a car that’s a hundred a month more than we should be paying. We spring for that dessert, or that hotel upgrade, or that extra night out on the town. TheĀ only difference is that we are not on the line between sustainable and unsustainable, and have a bigger cushion to absorb those mistakes. If you are making just enough to live on, springing for dessert could make you miss a payment. Missing a payment causes you to hit fees that push up your effective interest rate into triple digits. And the spiral begins.

I listened to a couple on NPR a couple of years ago that ran a food truck in Wisconsin. They were struggling, as the spouse with a corporate job had lost it, and lost their benefits along with it. When asked how they would deal with the cost of health care as they aged, they shrugged (with indecision rather than indifference) and finally stated that their children would take care of it.

I don’t believe this couple was intentionally so selfish as to burden their children with such a responsibility. But the language of American self-sufficiency has backed us into a corner. We cannot conceive of a world where a public good is actually, well, good. However, we readily imagine that a giant corporation motivated by profit will take care of our needs as well as our consumer desires. We respond with a sort of Stockholm Syndrome, where anyone on the wrong side of a law that protects the right to profit without regard to human cost deserves nothing, deserves to be cast aside. We are the worthy ones, because we currently have what appears like favor, but instead is simply utility to a soulless, unfeeling set of economic machinery.

As usual, any critique of the current order by an American must be met with “but I’m not talking about socialism!” So let’s get that out of the way. Public goods controlled by elected or especially appointed authorities who are not accountable to the people is just authoritarianism. This is what we saw in every single country that we love to hold up as inevitable outcomes of socialism. So no, I’m not talking about turning America into a giant commune or turning everything over to the government, certainly not while we have an apathetic republic that won’t hold its elected officials accountable in any consistent way. I’m also not talking about eliminating inequality. Human nature is to be rewarded in a proportion to effort, and any system that doesn’t allow that will eventually be overthrown by one that does.

But why do we think that this relentless pursuit of profit is the best of all possible worlds? We generate money printing machines that consume the landscape and crush the spirits of the people, and aggregate more and more for the machine’s makers. More importantly, we have created a mythology around poverty that causes us to see it more as damnation from a god that has refused your feeble sacrifice, while wealth is a blessing and a reward from a god that respects your hard work. This mythology is why we have the IRS losing money to chase small debts while corporations that evade billions in taxes are ignored. It’s why we won’t pay for Medicaid for All and are trying to dismantle food programs, quality public education, and other portions of the safety net, even though evidence keeps coming back that these investments are cheaper than the alternative.

Where the Christians have it right is that this is a heart issue. America loved the social safety net when it primarily benefited white men in the New Deal era. When the program was expanded to benefit more Americans through the Great Society, subsequent administrations quickly set to work dismantling them. Beyond the cost savings many properly implemented programs could bring, we have to ask ourselves what intangible cost our individual lack of accountability to our community brings. Are we safer when everyone is on their own financially? Are we less stressed when everyone has to work long days in cold environments? Are we happier when our neighbor cannot be counted on to care for us if we’re in need? Are we freer when every gift we give has conditions?

Who is my neighbor? And what is my obligation to them?

United Healthcare Pulls Out of Georgia – Thoughts on Health Care

United Healthcare is pulling out of the federal exchange in Georgia for 2017. You’ll see headlines about how this means Obamacare is on its last legs, or showing how overbearing progressive policies are bad for consumers. Healthinsurance.org has an article about the Georgia exchanges that has a bit more perspective. I would like to point out a few things about what this actually means in my opinion.

First, Georgia doesn’t have an exchange of its own. It opted to use the federal exchange provided for the states that refused to accept them. What’s more, Georgia actively created laws to prevent the creation of state-run marketplaces and make it harder for navigators to help people get coverage. In Georgia, a navigator must pass the same exam as insurance agents in order to be able to give advice to potential subscribers.

Second, according to this article, United Healthcare had less than 1K individual subscribers in Georgia, with most of their subscribers being in group plans. As such, it strikes me as disingenuous of United to paint their problem as being a gross profitability issue caused by ACA policy when in fact it probably was simply inconvenient for them to operate on such a small scale in the state. It is worth noting that their subsidiary Harken Health has signed up over 30,000 members in Atlanta and Chicago and will continue to remain on the exchanges. (Disclosure: I am subscribed to Harken and so far have been moderately satisfied with the insurance part and ecstatic about the primary and preventative care part).

Georgia has also opted out of Medicaid expansion, passing on billions in federal funding that would have created lucrative medical jobs and leaving nearly 300,000 Georgians earning too much to qualify for federal Medicaid, but too little to afford unsubsidized premiums. The principled stand is supposed to be that the program will ultimately cost Georgia too much money, but the data so far has not pointed to that. Instead, Georgia has opted to send federal tax dollars from their residents to provide health care to people in other states that did accept Medicaid expansion.

I find it interesting that the same politicians that favor deregulation and competition turn a blind eye to the mergers of the largest health care companies and pass red tape legislation to make it harder for an existing federal program to be successful. I have also not yet seen a credible alternative to ACA presented that would address the pre-ACA issues insurance companies had with refusing to pay for care and rapidly escalating premiums. What, then, is really motivating such staunch resistance to the simple question of how to get more people health insurance?

There’s an increasingly libertarian bent to arguments I hear from my conservative friends about the way things should be. The government is always bad at everything, and wants to take away your freedom at the point of a gun. Private companies have your best interests at heart because they’ll be motivated by a desire for profit and good reputation, and efficient markets will sweep away those that cannot provide the quality of service required for both. It is the responsibility of individuals to make optimal choices and protect themselves at all times, and the market can hold companies responsible for business done in bad faith.

This vision of how the world should work is attractive, especially if you believe that you are extraordinary. As much as I find libertarian ideals attractive, I find that when they hit the ground, there are some issues. Markets are great at what they do, but markets require open information. The American health care system is profoundly lacking in that, with dozens of prices for every item and procedure used, depending on who is ordering it and how it will be paid for. Try asking a provider how much anything costs. They couldn’t tell you if they wanted to, but most will answer, “I have no idea”.

Beyond the fact that the health care market is currently opaque, the myth of halcyon days of quality care before ACA took effect is false. Insurers were free to deny coverage to people due to diagnoses, culling the expensive cases and keeping the cheap ones, and there was no provider of last resort in most places. I was personally affected by this and had loved ones go without coverage for years until ACA took effect. I also paid for my own insurance out of pocket as an individual from 2003 to today, and I watched prices climb even faster than people complain about today. When the first ACA provisions took effect, my premium was cut by more than 50%.

At a deeper level, non-aggression and altruism are not natural human states, though it can be cultivated and encouraged in culture. I don’t think that removal of regulations automatically leads to Mad Max. However, given how companies try to take advantage of individuals as much as they can now even in the face of regulation and protection, I don’t see how removing regulations and protections would lead to less fraud. I also don’t believe that I’m so good at discernment and so popular or good at marketing that I could determine fraud, stop patronizing a business, and get enough others to do the same to shut a bad business down. Even if I dodge the bullet, someone else gets hit.

A more libertarian framework could work if people got serious about introducing competition enhancing measures along with the measures to unfetter corporations from regulations and limitations. We could use modern technology and new data aggregation and processing techniques to distribute more information in real time, keep everything visible and above board, keep private businesses a bit more honest. Frankly though, I’m busy enough trying to manage everything else in my life, and I don’t want to have to become an expert in health care administration and analysis just to go have my cough seen about.

Conservative politicians talk a libertarian game but are only interested in freeing corporations’ hands, assuming that in their benevolent interest in profit, they’ll do what’s best for consumers, and let the benefits trickle or rain down from the top. Until we can couple that with digestible, accessible information, and a media more interested in corruption than sensation, the net effect of deregulation will be continued massive profits for an oligopoly of companies and worse outcomes for consumers.