Surprise bills are just the latest weapons in a decades-long war between the players in the health care industry over who gets to keep
the fortunes generated each year from patient illness — $3.6 trillion in 2018.
Here’s how they came to be:
Forty years ago, when many insurers were nonprofit entities, and being a doctor wasn’t seen as a particularly good entree into the 1 percent, billed rates were far lower than they are today, and insurers mostly just paid them. Premiums were low or paid by an employer. Patients paid little or nothing in co-payments or deductibles.
That’s when a more entrepreneurial streak kicked in. Think about the opportunities: If someone is paying you whatever you ask, why not ask for more?
Commercial insurers as well as Blue Cross Blue Shield Plans, some of which had converted to for-profit status by 2000, began to push back on escalating fees from providers, demanding discounts.
Hospitals and doctors argued about who got to keep different streams of revenue they were paid. Doctors began to form their own companies and built their own outpatient surgery centers to capture payments for themselves.
So today your hospital and doctor and insurer — all claiming to coordinate care for your health — are often in a three-way competition for your money.
As the battle for revenue has heated up, each side has added new weapons to capture more: Hospitals added facility fees and infusion charges. Insurers levied ever-rising copayments and deductibles. Most important they limited the networks of providers to those that would accept the rates they were willing to pay.
Surprise bills are the latest tactic: When providers decided that an insurer’s contracted payment offerings were too meager, they stopped participating in the insurer’s network; either they walked away or the insurer left them out. In some cases, physicians decided not to participate in any networks at all. That way, they could charge whatever they wanted when they got involved in patient care and bill the patient directly. For their part, insurers didn’t really care if those practitioners demanding more money left.
And, for a time, all sides were basically fine with this arrangement.
But as the scope and the scale of surprise bills has grown in the past five years, more people have experienced these costly, unpleasant surprises. With accumulating bad publicity, they have became impossible to ignore. It was hard to defend a patient stuck with over $500,000 in surprise bills for
14 weeks of dialysis. Or the $10,000 bill from the out-of-network pediatrician who tends to newborns in intensive care. How about the counties where no ambulance companies participated in insurance, so every ambulance ride costs hundreds, or even thousands of dollars?
These practices are an obvious outrage. But no one in the health care sector wants to unilaterally make the type of big concessions that would change them. Insurers want to pay a fixed rate. Doctors and hospitals prefer what they call “baseball- style arbitration,” where a reasonable charge is determined by mediation. Both camps have lined up sympathetic politicians for their point of view.
So, nothing has changed at the federal level, even though it’s hard to imagine another issue for which there is such widespread consensus.
Two-thirds of Americans say they are worried about being able to afford an unexpected medical bill — more than any other household expense.
Nearly eight in 10 Americans say they want federal legislation to protect patients against surprise bills.
States are passing their own surprise billing laws, though they lack power since much of insurance is regulated at a national level.
Now, members of Congress have yet another chance to tackle this obvious injustice. Will they listen to hospitals, doctors, insurers? Or, in this election year, will they finally heed their voter-patients?
Poses an interesting discussion on the current state of our legislative process.