Health Care 2020: Connecting the Dots

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Part 2: What else needs to be fixed and diclosed?

We discussed the 87% hidden health care tax in Part 1. We saw that this tax supported the current health care system as we know it. We also saw that “Medicare for All” is not the answer, that without the revenue from private insurance payments, the system would not be sustainable.


There are other extremely expensive problems hidden in our current health care system that drive up health care prices, and no one wants to talk about them. Here are four of them:

Hospitals causing illness - And you pay

You have surgery in a hospital. You get an infection at the point of surgery. Who should pay to provide your medical treatment for this Hospital Acquired Infection? You would expect the hospital to pay all these costs as they do for people covered under a government health plan since 2007 – i.e. Medicare and Medicaid. 


If you have private, commercial insurance, you and your insurance will pay the hospital to provide care for your infection. In other words, the hospital that caused your infection during a procedure will be paid twice. 


· You and your insurance company would pay the hospital for the original surgery. 

· You and your insurance company would pay the hospital again for treating the infection that hospital staff had caused. 


With infections, there are two standards. If you have a government plan, the hospital must absorb the cost of care. If you have private insurance, you and your insurance company must absorb the cost of care.
 

When you repair a car and, on the way home it stalls out, who should pay to fix it? The car repair shop, of course. You wouldn’t expect to pay the car repair shop.
 

How to solve this problem


Legislators should copy the current laws regulating government health plans regarding hospital acquired infections. It’s that simple. They should require hospitals to pay for their own mistakes so that private health insurance companies and you can quit paying claims from hospital acquired infections.
 

Remarkably, not only would it help reduce the cost of insurance premiums, it would also improve the quality of medical care. With a financial motive hanging over them, hospitals clamp down on medical staff, requiring additional measures to protect against infections.

Padded hospital bills

How is it that you can be charged 200-300% more to see a doctor because he or she sees you in a hospital-owned building?


Hospitals and health systems have been purchasing physician practices at record levels. Sometimes they also buy the physician's building, make no changes and it becomes a hospital-owned facility. This allows the hospital to charge patients two ways: the doctor’s fee and now a facility charge.


Many physicians continue to keep a private practice in a different building not owned by the hospital.


When you see the physician in a hospital-owned clinic, you pay an additional price called a facility fee. You pay far less if you see the same doctor in a non-hospital-owned clinic.


True example. A St. Paul man met with his psychiatrist at the doctor’s private clinic. The psychiatrist charged $265. Six months later, the man saw the psychiatrist again, but at a hospital-owned clinic. When the patient made the appointment to see the psychiatrist, no one told him he could have seen the doctor at his private clinic and saved money. The hospital charged $565 -- $300 for the facility fee and $265 for the psychiatrist.


Solution: To protect against padded hospital bills, the hospital must be required to disclose the facility charge at the time you make an appointment and tell you how much is charged for the physician’s services. Additionally, when you can see the same physician at a different location without a facility charge, the appointments clerk should be required to tell you, and give you the freedom to choose where to see the doctor.

Total health care price transparency has happened, but did anyone tell you?

Why hasn’t anyone told you about the breakthrough medical price transparency law the legislature passed in 2018? It passed almost unanimously, with Democrat and Republican votes. No one had believed the two parties could agree on anything, but they sure did on price transparency


For years, health care consumers have been demanding to know the price of care before receiving it. This new law makes it possible (effective July 1, 2019). 


There are two main parts to the law so you can know the price of care before you receive it.

  • The first part requires providers and your insurance company to give you a “Good Faith Estimate” of their prices for medical care, products, or devices. But you have to ask for it!
  •  The second part requires a primary care provider to post many of their common prices on the wall in their waiting room and on their website. The posted prices must include:

  1. · their billed rate (retail), 
  2. · the doctor's average payments from commercial health plans, 
  3. · and the Medicare and Medicaid allowable prices. 


Now that you can see the Medicare prices alongside the provider charges you pay, you can also see the hidden tax you’re paying.


Solutions: This new law is a good start toward helping patients understand health care prices and comparing one provider’s prices to another. At least two more provisions, however, should be added to the law.


There is no penalty on providers if they fail to comply with the new law. We suggest that if the provider fails to comply, they should be limited to charging no more than the Medicare allowable price for care as a penalty.


We also support total price transparency, and in a way that you don’t have to ask for it. Providers should disclose their prices – period.


These transparent prices can then be used for a whole new way of paying for care – called Reference-Based Pricing

Protect against price gouging

Today, providers require you to sign a contract to pay whatever they charge, without telling you anything about the charges until after the services are rendered. This means that you could receive a huge bill weeks after a service and be required to pay it, no matter how much it is.

When you go to a facility for medical care you are required to sign several papers. One of those papers includes a statement that says you are ultimately liable for any amount the provider charges you. The provider, however, does not tell you the amount you will be billed, or how much above the Medicare allowance you are being charged.
Example:

  • · You step up to the receptionist counter and are asked to complete several forms.
  • · You sign the forms, including one that says you are liable for any amount that is billed.
  • · Consider a procedure where Medicare allows $100.
  • · The provider bills you 250% above the Medicare allowance ($250) after the service is completed.
  • · You do not realize that you are liable for the excessive billing amount until it’s too late. 
  • · The provider has the right to collect the full $250, and can use a collection agency.

Solutions: Minnesota law should require providers to disclose the percentage above Medicare that they charge for services prior to the services being performed. 


Furthermore, the law should require providers to secure a written signed disclosure from you in advance of providing services/procedures when charging in excess of the Medicare allowance.

 

Providers who fail to obtain a signed disclosure from you before or at the time services are provided, will be limited to reimbursement from you or your health plan of no more than the Medicare allowance. 


If you are incapacitated, a provider may not attempt to collect any fees in excess of 100% of the Medicare allowance for health care services provided during the time of the incapacitation (unless you have previously signed a disclosure with the provider).