How corporate health care interests, nervous about their profits, are trying to scare you
by Wendell Potter - Tarbell.org - August 8, 2018
Chances are, you saw a headline or heard a report that went something like this: Expanding Medicare to cover all Americans would cost $32.6 trillion dollars.
If I was still a flack for the health insurance industry, I would have worked hard behind the scenes to make sure you saw that story—and the one thing you would remember about it was that scary number.
That’s because the one thing my former employers fear more than anything else is Medicare for All, which poll after poll is showing once again that a majority of Americans support.
We’ve been here before. In the months before I left my job in 2008, the insurance industry got very nervous when our own internal polls showed what we see today: a growing percentage of voters wants the government, instead of for-profit corporations, to provide them with access to needed health care.
One of the reasons I quit my job was because I could not in good conscience be a part of what we in the PR trade referred to as a FUD campaign, one designed to create fear, uncertainty and doubt about something. My former colleagues and I were very effective creators and implementers of FUD campaigns. We carried them out whenever any kind of health care reform was being proposed that might lead to shrinking profit margins.
The “strategic imperative” of the insurance industry’s FUD campaigns was, and still is, this: scare the bejesus out of people. Get them to believe that expanding Medicare to cover us all would be a “government takeover of health care.” (It wouldn’t, but truth has little place in a FUD campaign.) And get them to believe that health care would cost Americans a lot more under Medicare for All. (It would actually cost Americans less, but, again, that’s not a fact the industry wants you to know.)
In a FUD campaign, you always use numbers very selectively and out of context—like that $32.6 trillion figure. The very intent is to mislead.
Never mind that most other developed countries have some kind of single-payer, Medicare for All-type system. Or that those systems cost less both overall and on a per capita basis, provide residents with universal access to care and have better health outcomes on most metrics than our fragmented, profit-driven multi-payer system. The point was to scare you into thinking there was no way this could ever work.
In a FUD campaign, it’s always helpful to be able to cite an industry-friendly think tank, like the Mercatus Center that came up with that $32.6 trillion figure, as the source for our so-called “facts.”
A bit of context: Charles Koch sits on the Mercatus Center’s board of directors and he and his brother, David, have given the center, based at George Mason University, more $9 million. They’ve also donated an additional $65 million to the university (which came with the condition that hiring in the economics department would be subject to their approval).
If you were to read nothing but the headlines about the Mercatus report, all you would really know is that it concluded that Medicare for All would cost $32.6 trillion. You would have had to read deep into the report itself to learn that it would cost that much not in a single year, as many people undoubtedly believed, but over the course of 10 years. But the objective was to get that big number into as many headlines as possible; details be damned.
If I were still in my old job, I would have known well in advance that this study was about to be released. As soon as it was published, I would have been on the phone to the many reporters I knew to make sure they were aware of it.
I would say something like this: “Hey, Barbara (or Mike or Andrew) I just wanted to be sure you saw the new study about how a single payer system would cost us. Nearly 33 trillion dollars! Even I didn’t know it would be that high!”
Sure enough, many of the headlines about the Mercatus Center’s work were exactly what my old-self and former colleagues would have been delighted to see. Like this one from the Associated Press: “’Medicare for All’ Could Cost $32.6 Trillion, George Mason Study Says.” And this one from The Hill, an inside-the-beltway publication: “Bernie Sanders’s ‘Medicare for all’ would cost 32.6 trillion: study.”
That number, of course, was misleading to say the least. If you read the whole study carefully, you would have noted that even the Mercatus researcher concluded that Medicare for All would be a better deal for Americans than our current system. The study found that Medicare for All would actually cost $2 trillion less than our current health care system. And that it would save businesses money, raise wages, create savings for families, cut administrative costs in half, and save hundreds of billions of dollars in prescription drug costs.
The role I had to play in disseminating biased and misleading studies to scare people away from Medicare for All is one I deeply regret. It got to the point where I hated myself for what I was doing for a living. I became what some have called a whistleblower. I testified before Congress several times, pulling the curtains back on the deceptive business and PR practices of the health insurance industry. (I’ve also written extensively about them, including in my book, Deadly Spin, An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans).
The lies and misinformation my colleagues and I spread caused patients to suffer, and even die. Our system was and still is bankrupting families. It was and still is drowning businesses in insurance premiums. It was and still is hurting our economy and economic competitiveness. It was and still is keeping wages flat. It was and still is forcing doctors and nurses to spend more time doing paperwork than caring for patients. I finally reached the point that I could not in good conscience keep spreading lies and misinformation to perpetuate a system that was becoming increasingly unaffordable and inequitable but that was still very profitable for my industry and other health care special interests.
I consider it part of my mission now is to expose the FUD campaigns and other deceptive tactics I once used to help maintain the status quo. The Mercatus study is just the most recent example of FUD, but it certainly won’t be the last. You can expect to see many other “studies” as support for Medicare for All continues to grow, and it will. Keep an eye out for reports from outfits like the Pacific Research Institute, the Fraser Institute and the American Enterprise Institute, all of which I used to work with in my old life. (Cigna, the last insurer I worked for, even endowed a chair at AEI in honor of a former CEO.)
Let me give you some real numbers, from the Centers for Medicare and Medicaid Services: The U.S. already spends $3.5 trillion a year on health care, according to a CMS report from earlier this year. By 2026—just eight years from now—it is expected to reach $5.7 trillion a year. As a percentage of GDP, it is expected to jump from 17.9% (as of 2016) to 19.7 percent in 2026. Keep in mind, this is from the Trump administration, not some single-payer advocacy group.
With that likely to be our reality if we stick with our multi-payer system, how can we afford not to consider Medicare for All?
Letter to the editor: Medicare for all is affordable, practical and responsible
by Michael Bacon - Letter to the Editor - Portland Press Herald - August 27, 2018
It was encouraging to read Dr. Daniel Bryant’s Aug. 13 letter arguing that we could fund Medicare for all for a sum that approximates today’s total national health care expenditure. Thus, for the same money, 100 percent of the population would be insured, all pre-existing conditions would be covered, there would be no lifetime caps and the individual would have complete freedom in the choice of providers.
Opponents of Medicare for All frequently denounce it as socialized medicine. It is not. It is simply a government-run insurance program. All of the resources (federal, state, employer, individual) currently drawn upon to cover the nation’s health care costs are gathered so that a single agent pays all the bills.
Yes, it is a socialist idea, but one that has been shown by long experience with current Medicare to work well in a capitalist economy without sapping its vitality. Proponents do not advocate, as the socialist would, that the government seize the hospitals and manage the delivery of medical services. This would remain in private hands.
Some fear that government-guaranteed insurance would somehow deny us important freedoms. Quite the opposite is true. Having more security and less risk in our lives liberates us to achieve our full potential. We are happier, we are more productive and we probably live longer.
Others reject the proposition that access to health care should be universal, implying that some of us are unworthy. I can only express my own conviction that as a society, we have a responsibility to care for those among us who are simply unable to keep up in our highly competitive economy. Our government is the mechanism by which we discharge this responsibility, just as we take other actions to advance the public good.
Michael P. Bacon
Westbrook
How to Tame Health Care Spending? Here’s a One-Percent Solution
by Margot Sanger-Katz - NYT - August 27, 2018
The health care system in the United States costs nearly double that of its peer countries, without much better outcomes. Many scholars and policymakers have looked at this state of affairs and dreamed big. Maybe there’s some broad fix — high deductibles, improvements in end-of-life care, a single-payer system — that can make United States health care less expensive.
But what if the most workable answer isn’t something big, but hosts of small tweaks? A group of about a dozen health economists has begun trying to identify policy adjustments, sometimes in tiny slices of the health care system, that could produce savings worth around 1 percent of the country’s $3.3 trillion annual health spending. If you put together enough such fixes, the group points out, they could add up to something more substantial.
This is a shift from the kind of research that is typically rewarded by big journal editors and tenure committees, but it could turn out to have a crucial role in understanding why our health care system is so expensive, and so unusual.
“I think focusing on the forest misses the fact that there are trees encroaching out of the forest,” said Fiona Scott Morton, a health economist at the Yale School of Management. “And we need to start cutting them down.”
A working paper published Monday proposes a possible 1 percent fix. In the 1980s, Congress carved out a small group of hospitals from its normal rules for payment. These “long-term care hospitals,” which treated patients with tuberculosis and chronic diseases, could earn far more money than traditional hospitals and nursing homes if they cared for patients who stayed with them for an average of 25 days. Since then, the number of these hospitals has mushroomed, from a few dozen to more than 400, most run by two for-profit chains.
For years, analysts and policymakers have wondered about the value of these hospitals, which tend to treat very sick patients who need a lot of care, such as mechanical ventilation or dialysis. Several analyses have suggested that Medicare may be overpaying for their services. And Congress has made some small changes to limit the number of patients who are eligible for such care.
The new paper, from researchers at the Massachusetts Institute of Technology and the University of Chicago, took a close look at what happened to patients as new long-term care hospitals opened around the country in places that had none.
The study, covering 1990 to 2014, found that when such a hospital opened, the odds increased that very sick patients leaving a normal hospital would end up going next to a long-term care hospital, generating a growing bill for both Medicare and the patients themselves. But the researchers found no benefit when it came to patients’ chances of dying or going home within 90 days.
The researchers concluded that the health care system could probably save a lot of money — around $5 billion a year — by paying the long-term care hospitals the same prices that are paid to skilled nursing facilities, the places that most long-term patients end up in when there is no long-term care hospital nearby. If they’re right, the savings would probably be in the 1 percent range.
The hospital industry disagrees with the paper’s conclusion and disputes the notion that the extra money they get is wasteful. The American Hospital Association noted that since the study ended, Congress has changed the rules for long-term care hospitals so that fewer of their patients qualify for the highest payment rates. That means that the study results might be different if they looked at long-term hospital care in more recent years.
Select Medical, one of the large chains of long-term care hospitals, said in a statement that measuring only whether the long-term care patients died or went home did not capture other, more subtle health benefits that the hospitals provided compared with other options. But the industry does not collect such measures of quality in a standardized way, making that theory hard to test.
The National Association of Long Term Hospitals, a trade group, also noted that the paper’s policy proposals were more extreme than those from other critics, who had suggested more minor changes to how the hospitals should be paid.
Neale Mahoney, a health economist at the University of Chicago Booth School of Business, who was one of the working paper’s co-authors, said the history of long-term care hospitals fit together with the economic analysis to suggest that the special hospital payment probably wasn’t appropriate.
“What’s convinced me that these institutions are a source of waste is a constellation of evidence rather than one piece of evidence,” he said.
Dr. Jeremy Kahn, a critical care physician and professor of health policy at the University of Pittsburgh, who has studied long-term care hospitals extensively, said there are some patients with particular ailments who benefit from the setting, but agreed with the economists that the hospitals are a historical accident, defined more by payment rules than patient needs.
“Long-term care hospitals aren’t to blame here,” he said. “If you see a dollar on the ground, you will pick it up, and that’s what’s going on here.”
Mr. Mahoney said the economics profession is fond of broad conclusions. The typical paper takes a narrow case and tries to draw a broader conclusion about how the world works. But he increasingly thinks that there may be value in thinking small, doing more of what he calls “forensic economics.”
One of his co-authors, Amy Finkelstein, says she has been inspired by a colleague who works in development economics, Esther Duflo, who recently delivered a speech titled “The Economist as Plumber,” arguing that her colleagues should not look down on tinkering as unworthy of the profession.
“We may need to do more health care plumbing rather than health care big theories,” said Ms. Finkelstein, a health economist at M.I.T. “The history of long-term care hospitals suggests the industry will always innovate ahead of you, and you may actually have to roll up your sleeves and find these pockets of waste.”
The researchers have begun to chat during coffee breaks at conferences and in long phone conversations. Small possible sources of inefficiency, like drug co-payment coupons for generic drugs or high out-of-network payments for emergency room care, could start to add up.
The scholars involved in the project know that they are not the first group to think small. The sort of deep and narrow investigations they are undertaking have long been the focus of groups like the Medicare Payment Advisory Commission, a group that recommends changes to Congress and that had even flagged long-term care hospitals for overhaul years ago. Washington policymakers and think tanks have long assembled briefing books of options to help them nip and tuck dollars out of government health programs.
But the new effort by academics may expand the impact of such suggestions. New data about not just government spending but also private insurance has enabled researchers to examine spending and inefficiency in the health care system more broadly than ever before. After all, the health care system is much bigger than just Medicare.
“I think people say that’s too small — it’s not going to change the trajectory — therefore we shouldn’t spend time on it,” said Ms. Morton, the Yale economist. “And they are forgetting how many dollars there are.”
CAPITOL ALERT
Doctor, hospital groups organize to oppose single-payer in California
by Angela Hart - Sacramento Bee - August 28, 2018
Gavin Newsom: ‘No reason to wait around’ on universal health care in California
Lt. Gov. Gavin Newsom, gave a full-throated endorsement of Senate Bill 562, a proposed universal health care bill that stalled in the Legislature because Assembly Speaker Anthony Rendon said it lacked a financing plan. Newsom, running for governor
A group of influential, deep-pocketed business and health care organizations that have long helped shape the legislative agenda in California have joined forces to oppose any future effort to craft a universal, single-payer health care system for the nation’s largest state.
The main focus of the coalition, called “Californians against the costly disruption of our health care,” is to kill any single-payer health care bill in the state Legislature, said Ned Wigglesworth, a political strategist for the coalition.
“As long as proponents plan to bring this back time and again, we think it’s important to have a strong, unified presence to oppose it,” Wigglesworth said, referring to Senate Bill 562, the 2017 single-payer bill pushed by the California Nurses Association that was shelved last year by Assembly Speaker Anthony Rendon.
The anti-single payer coalition includes powerful groups representing the interests in Sacramento of doctors, hospitals, insurers and businesses. Instead of single-payer, the coalition is expected to press for alternatives, which could include several legislative proposals on health care that failed this year and some under discussion, including expanding state insurance subsidies, allowing undocumented adults to sign up for Medi-Cal and creating a state-based individual mandate for everyone to have coverage.
Nurses, acknowledging their high-profile effort to create a government-financed single-payer system is dead (the end of the two-year session is Friday), said the union plans to introduce another single-payer bill next year. They say anything short of that is insufficient.
“We are working on a bill,” said Stephanie Roberson, chief legislative director for the nurses association. “The California Nurses Association is in no way backing off pursuing legislation to achieve ‘Medicare for all’ next year. Speaker Rendon’s act of shelving the bill last spring only strengthened our resolve.”
She said the nurses are talking to various lawmakers about legislation heading into the new two-year term, but they don’t yet have an author. She said she expects Lt. Gov. Gavin Newsom, the frontrunner in the California governor’s race, to play a prominent role, should he be elected in November.
“We welcome the new leadership of our future governor, Gavin Newsom, with his commitment to this issue... We need political leadership and courage.”
Newsom has voiced support for single-payer, but has also said he has concerns about whether California could overcome the steep challenges it would take to create such a system. It would cost an estimated $400 billion per year and, although it would eliminate insurance costs for health care consumers, it would also require large tax increases. It would also likely require voters to approve amendments to the state Constitution, and the state would have to secure several federal waivers from the Trump administration.
Doctors, hospital groups and insurers are gearing up fight back next year against any single-payer bill similar in scope to last year’s proposal.
“I think you’re going to hear our messaging loud and clear,” said Charles Bacchi, president and CEO of the California Association of Health Plans. “It’s going to be really focused around how expensive (single-payer) would be for California to do, and how disruptive it would be for people who currently receive health care coverage.
“The remaining uninsured is what we should address next,” Bacchi said.
Health care industry groups were somewhat blindsided last year by the single-payer bill, authored by state Sens. Ricardo Lara and Toni Atkins, who is now leader of the Senate, representatives of doctor and hospital groups said. They’ve long opposed single-payer, but were not formally organized to push back against the nurses’ single-payer proposal.
“The rapid advancement of SB 562 caught everyone by surprise,” Bacchi said. “We were all individually talking about ways to improve our health care system and in the meantime, a really bad idea was speeding its way through the Legislature.”
Allan Zaremberg, president of the California Chamber of Commerce, said that will be different next year.
“A lot of employers provide health care, and like their employees, they’re satisfied with how health care is delivered,” Zaremberg said. “From a business perspective, I think they’d rather have the administration (of health care) done through the private sector rather than the government.”
Coalition members said they’ll be focusing their early efforts on the Legislature and the next governor, but did not rule out spending on advertising and other public messaging. Key discussions will be focused on alternative potential proposals to contain escalating costs and expand coverage to everyone regardless of immigration status or ability to pay.
Opposing sides have heard what they’ve wanted to hear from Newsom in the gubernatorial race. The nurses see an ally in their fight, while Newsom’s comments lately indicate deep skepticism about the ability to implement single-payer, industry representatives said.
“We have spoken to Mr. Newsom and if he’s elected, we will continue to talk to Mr. Newsom,” said Janus Norman, chief lobbyist for the California Medical Association. “We expressed our concern and he expressed his commitment to getting to a place where everyone is covered... He did it in San Francisco and he is dead-set on doing it as governor.”
Newsom spokesman Nathan Click said in a statement, “As he did as mayor, Gavin Newsom will bring stakeholders of differing perspectives together to achieve a health system that is bold, affordable and works for everyone.”
A Little-Known Windfall for Some Hospitals, Now Facing Big Cuts
by Austin Frakt - NYT - August 29, 2018
Most hospitals are nonprofit and justify their exemption from taxation with community service and charity care. But the Trump administration could require some of them to do more to help the poor, and the hospitals that are in the cross-hairs are those benefiting from an obscure drug discount program known as 340B.
The 340B program requires pharmaceutical manufactures to sell drugs at steep discounts to certain hospitals serving larger proportions of low-income and vulnerable people, such as children or cancer patients. The participating hospitals may charge insurers and public programs like Medicare and Medicaid more for those drugs than they paid for them and keep the difference.
By one estimate, the program saved hospitals $6 billion in 2015 alone. The original intent of the program, enacted in 1992, was for hospitals to use the revenue to provide more low-income patients a broader range of services.
Many institutions that serve mostly low-income and uninsured populations say they need the program. “Most nonprofit hospitals have very slim profit margins, and they’ve come to rely on this revenue,” said Melinda Buntin, chairwoman of the Department of Health Policy at Vanderbilt School of Medicine. A hospital lobbying group said that for some rural hospitals, the funding cut “could actually be the difference between staying open and closing.”
But there is concern that 340B has come to include hospitals that don’t need the extra help and are not using its windfall as originally intended.
The program has grown considerably, most recently as a result of an expansion included in the Affordable Care Act. As of 2004, about 200 hospitals benefited from the 340B program; by 2015, over 1,000 were participating. The program now encompasses 40 percent of all hospitals and an even larger number of hospital-affiliated clinics and pharmacies.
It might seem odd to give discounts on drugs to help hospitals offer care to low-income patients. How can we be sure they’ll use the money for that?
An increasing number of hospitals are not.
A study published in JAMA Internal Medicine found that the early participating hospitals were more likely to be located in poor communities with higher levels of uninsured people, to spend more of their budget on uncompensated care, and to offer more low-profit services than hospitals that started participating later.
“The 340B program may produce the results intended at some hospitals,” said Sayeh Nikpay, an assistant professor at Vanderbilt University and a co-author on the study. “But as the program grew, it benefited many hospitals with less need for assistance in serving low-income populations.”
Other research corroborates that hospitals aren’t using the 340B program as intended. A study in The New England Journal of Medicine was unable to find any evidence that profits from 340B have led to more access to care for low-income patients, or reductions in mortality rates among them. Another study in Health Affairs found that 340B hospitals have increasingly expanded into more affluent communities with higher rates of insurance.
The 340B program may have also inadvertently raised costs — for example, by encouraging care in 340B-eligible hospitals that could have been provided less expensively elsewhere. A study in Health Services Research found that hospital participation in 340B is associated with a shift of cancer care from lower-cost physician offices to higher-cost hospital settings.
The program may also encourage providers to use more expensive drugs. The more hospitals can charge insurers and public programs for a drug — relative to how much they have to pay for it under the program — the greater the revenue they receive. They also receive more revenue when the drugs are prescribed more often.
In January, Medicare lowered the prices it pays for 340B drugs by 27 percent. Although this move chips away at how much hospitals can benefit financially, it does little to address how much insurers and individuals pay for prescription drugs or the value they obtain from them. In addition, the move does nothing to increase hospital spending that could help the poor.
It may even harm some health care organizations, leading to lower-quality care at those institutions that are helping the poor. Studies have shown that, by and large, when hospitals lose financial resources, they make cuts that could harm some patients.
This can happen if cuts lead to reductions in workers who perform important clinical functions. A study in Health Services Research found that hospitals cut nursing staff in response to Medicare payment cuts in the late 1990s. Heart attack mortality rates improved less at hospitals that had larger cuts.
Another response to reduced revenue is cuts to specific services, which would harm patients who rely on them. A study by economists from Northwestern’s Kellogg School of Management found that some hospitals that endured financial setbacks during the Great Recession cut less profitable services like trauma centers and alcohol- and drug-treatment facilities.
Another study looked at a 1998 California law that required hospitals to comply with seismic safety standards — imposing a large cost on those institutions, without providing additional funding. Hospitals that were hit harder financially by this law were more likely to close; government hospitals responded by reducing charity care.
Hospitals could absorb cuts without harming care if they could become more productive — by doing more with less. Historically, there is very little evidence they have been able to do that.
Two powerful lobbies are now battling each other, with the pharmaceutical industry arguing that 340B has grown well beyond its original intent. Hospital lobbying groups are fighting back and also squaring off against the government, suing over the planned federal cuts.
Those are big clashes over a program that began modestly a quarter of a century ago to help the poor, albeit in a most convoluted way.
His $109K Heart Attack Bill Is Now Down To $332 After NPR Told His Story
by Chad Terhune - Maine Public - August 31, 2018
A Texas hospital that charged a teacher $108,951 for care after a 2017 heart attack told the patient Thursday it would slash the bill to $332.29 — but not before a story about the huge charge sparked a national conversation over what should be done to combat surprise medical bills that afflict a growing number of Americans.
The story of Drew Calver was first reported by NPR and Kaiser Health News on Monday as part of the "Bill of the Month" series, which examines U.S. health care prices and the troubles patients run up against in the $3.5-trillion industry.
In Calver's case, the 44-year-old father of two had suffered a serious heart attack in April 2017. A neighbor rushed Calver to the nearest emergency room, which happened to be an out-of-network hospital under his school district health plan. His insurance paid the hospital nearly $56,000 for his four-day hospitalization and the procedures to clear his blocked artery.
But the hospital, St. David's Medical Center in Austin, wasn't satisfied with that amount and went after the high school history teacher and swim coach for an additional $109,000. It's a practice known as "balance billing."
Within hours of the story's airing on the radio and publishing online, the hospital offered to waive nearly the entire bill and charge Calver $782.29 instead.
By Thursday, St. David's lowered the amount it said Calver still owed even further. Calver says he paid the final $332.29 bill over the phone, eager to put this stressful saga behind him.
It's a relief, he says, that his family no longer faces a six-figure bill and threatening letters from the hospital's debt collector. But he worries about other patients hit with unjust medical bills — of $10,000, or $20,000, say — who don't catch the media's attention.
"It feels great that this is over for me and my family, but this isn't just about my bill," Calver says. "I don't feel any consumer should have to go through this."
He and his wife, Erin, say they were encouraged by the outpouring of support and attention they received in the wake of the story's airing. Drew Calver gave local TV interviews after teaching class and fielded numerous calls from other national media asking about his experience.
Just after paying off his hospital bill, Calver walked to the school cafeteria Thursday to grab lunch. One of the lunchroom workers approached him and shared that she, too, was facing a huge medical bill from the same Austin hospital. Calver says he plans to follow up with the woman and assist her in any way he can.
"This is the next way I can be of help to others," he says.
The hospital system, St. David's HealthCare, continues to defend its handling of Calver's bill, saying it "did everything right in this particular situation." The company also points out that it informed the family on several occasions that they could apply for a discount through a financial assistance program based on their household income.
Calver says he didn't fill out the financial assistance paperwork earlier because he didn't feel he owed the $108,951 — and had been contesting the validity of the charges all along.
His health plan said the $55,840 it paid the hospital should have satisfied the hospital's claim. And Calver was already paying $1,400 as coinsurance, which was the out-of-pocket amount calculated by his health plan. Nearly all the $109,000 bill that St. David's sent Calver — the patient — was on top of all that.
HCA Healthcare, the largest for-profit hospital chain in the country, and two nonprofit foundations own St. David's.
The chief executive of St. David's HealthCare, C. David Huffstutler, sent a memo Monday addressed to his board of governors about Calver's story. An employee at St. David's shared the memo with Kaiser Health News. When contacted by KHN, the hospital didn't dispute the memo's accuracy.
"I realize this is not the type of coverage any of us want for St. David's HealthCare," Huffstutler wrote in the Aug. 27 memo. "With this story, we had a number of circumstances that made it difficult to neutralize the coverage — a monthly news segment that seeks to empower patients to challenge their medical bills; a gap in the system that is affecting patients ... and, a compelling patient story."
Huffstutler also described the hospital's charges of $165,000 as "reasonable and customary." He said that the school district and its health plan administrator, Aetna, chose to offer a narrow network plan that "can potentially place a heavy financial burden on the patient."
Consumer advocates say the hospital should have erased the bill completely after putting the family through so much stress for months.
The drastic reduction in the bill "shows that these hospital numbers are just made up," says Bonnie Sheeren, who runs Houston Health Advocacy and assists consumers with their medical bills. "It should be a zero balance and the hospital should pay for therapy sessions to help this family recover from the billing ordeal."
Several states have passed laws or introduced programs to help shield patients from surprise medical bills, particularly those stemming from emergencies.
But those state protections don't apply to many U.S. workers because they get their health coverage through employers that are self-insured — meaning the employers pay medical claims out of their own funds. (Federal law, which governs most of these health plans, does not include such protections.)
A Texas congressman, Rep. Lloyd Doggett, D-Austin, heard Calver's story on the radio Monday and immediately wrote the family a letter offering his support. Doggett was once a student at the high school where Calver teaches.
Coincidentally, the lawmaker proposed legislation last year aimed at limiting surprise billing for patients, but he says it hasn't received a hearing in the current Congress.
"This is a nationwide problem and we need a nationwide solution," Doggett says. "We have a system where the patient — the most vulnerable person of all those involved — is caught between the insurer and the health care provider ... These problems are solvable."
Zack Cooper, an associate professor of public health and economics at Yale University, has studied hospital billing practices extensively and says the $109,000 bill was likely no accident.
He notes that St. David's, like other hospitals, advertises short wait times for its emergency rooms in order to attract out-of-network patients like Calver. Cooper says the teacher's case illustrates the need for better regulation of out-of-network billing at the state or federal level.
"The idea that a hospital would send a bill that will probably bankrupt an individual boggles the mind," Cooper says. "For me, that is emblematic of a fairly toxic culture."
"This was a remarkable story and it has done remarkable good for him," Cooper adds. "But we shouldn't be in a world where to avoid financial ruin you have to hope your story is featured in the popular press. We can do better than this."
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