Should we expect patients to think about costs?

Not long ago, I blogged about a plastic surgeon who aggressively pursues patients who refuse to pay her bills. The state is suing her to make her stop and also considering lifting her medical license. The central theme is that she makes patients who she sees in the ED to sign a form stating that they will pay her. It is unlikely that the patients are aware of the amount of the fee up front. Then she won’t accept what insurance considers a reasonable reimbursement and goes after the patients with lawsuits and liens on their houses, ignoring the fact that balance billing of emergency department patients is illegal in her state.

A number of doctors have defended the surgeon. Many have said that the patient should have asked her what the fee would be. In my experience, that is a rare occurrence. I’ve been a surgeon for four decades and I can’t recall a single patient asking me what the fee for an elective operation would be. I hardly think a patient would ask at the time of an emergency.

Most patients either don’t think about it or don’t consider it an issue. In many cases, they don’t understand how the system works at all. Here’s an example.

A new patient arrived for an appointment with the doctor. At the time he called to schedule it, he was told that the doctor did not accept his insurance. At check in, the secretary reminded him of this, and having amnesia for the previous conversation, he was taken aback and said, “I thought everyone had to accept WeDontCare.”

Further questioning revealed he had a $5000 deductible policy and he had not used any of it yet this year. Even if the MD had participated in WeDontCare, the patient was shocked to learn that he would have had to pay for the office visit.

He was then told that the fee for the comprehensive new patient examination would be $250.00. When he balked at this, the nurse asked him why he chose such a high deductible policy if he didn’t want to pay for visits out of pocket. He said it was because the premium was so much lower.

The nurse explained that the point of a high deductible policy was that in exchange for the lower premium, he accepted the risk that some or all of the money saved might have to go toward paying for medical care, probably a reasonable risk for someone in good health. He didn’t seem to understand that unless he paid out of pocket for more than $5000 (less what the lower premium cost was) worth of medical care in a year, he was ahead of the game.

The patient then began to see the light. If this man, who was a retired financier, had never thought this through, how would anyone expect the average patient to do so?

“Skeptical Scalpel” is a surgeon blogs at his self-titled site, Skeptical Scalpel.

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  • Edward Stevenson

    Before medical school I worked at large financial company. It was interesting/shocking watching fellow employees pick their health benefits. Most Co-workers were business and finance majors who knew a good deal about savings, planning, life insurance design, actuarial tables and the like. They might have well as throw darts at a wall to choose a plan. young health single workers were selecting the expensive indemnity plan because “it had a low deductible” the workers in their mid 40s with co-morbidities were looking at the high deductible options because the took the least from their paycheck. If finance majors seem to have hard time analyzing cost against their health risks, how much how hope is there for the rest of the population.

  • JPedersenB

    This is appalling but there is another problem here. It is very difficult to get any medical professional to tell you their fee BEFORE the service is rendered. I have asked and gotten responses such as: “I don’t know.” or “Don’t you have insurance?” Asking usually causes a great deal of discomfort, disbelief and confusion from the doctor. In my opinion, fees should be listed in a program on the office computer that is easily accessbile by the doctor and doctors should practice saying, “My fee is $____ for that service.” (Also, the proper term is “fee,” not “reimbursement.”)

    • Suzi Q 38

      I have done this, because I needed a price for my MRI’s. I needed 4 of them (C, T, and L spine plus a brain one).
      The MRI’s were considerably less at a separate imaging center.
      The positive about that is that it is far cheaper. It is at least 50%-70% less. The bad is that I was unsure of the quality or age of the machine at the imaging center. Also, there was no neuroradiologist on their staff to interpret the findings.

      I do like to call because I found out that the blood tests were also very high at the hospital.

      I should have called about my surgery cost, but I wanted a certain surgeon, so I didn’t bother. I just knew that I had to pay for the deductible of $2K.

      When I was in the hospital I only let the nurse and essential physicians see me. I left within 30 hours to try to keep the cost down, as I was doing well, the hospital was filthy and noisy, and my daughter (a nurse) could care for me at home. My husband and son was caring for me as well.

      I went once to an endocrinologist. She didn’t do much for me, so I am going back to my PCP for my blood sugar concerns.

      I am trying to think about it first.
      I have to take another MRI on my brain in March, and an xray as well. I can’t avoid going to the teaching hospital for those.
      When it gets serious like my problems have been as of late, you try to go where they tell you if it is important.

  • Skeptical Scalpel

    Thanks for the comments. JPedersenB, you are correct that it is hard to find out the price of a service. That needs to change. Part of the problem is that Medicare pays one rate, Medicaid another, and many third parties have even more different pay scales. If an MD lists a price for a service, it may not apply to all payers. It’s a mess.

    Edward, You are so right. If people who know something about money can’t figure it out, who can?

  • Docbart

    Why is this surgeon on ED rotation? Her hospital can put a stop to this abuse by not giving her access to ED patients if she insists on having patients sign her form. If they don’t address the problem, they are partially to blame.

    • Skeptical Scalpel

      Docbart, you are right. It may be that the hospital is having problems finding doctors to cover. Plastic surgery is a particularly difficult specialty to find willing doctors. They would be better off with no one.

    • John Henry

      There is, as usual, more to the story. The California legislature passed a law requiring all doctors treating ER patients who had HMO policies in that state to accept whatever rate was deemed appropriate by the patient’s HMO, even if the doctor did not participate with the HMO plan and had no contract obligating them to accept the HMO’s rate. Patients who were not members of the HMOs could be charged whatever the doctor saw fit. This law was clearly passed to the great advantage of California HMOs and their enrolled customers, and its effect was to allow HMOs to declare whatever they wanted as a “fair” rate for services. Imagine getting shorted on your paycheck one pay period because your employer decided to impose a different payscale than you had agreed to accept. Now imagine it being made illegal to demand what you had agreed to be paid in the first place. That is what the California legislature did. It is, in effect interference with private businesses and professionals to engage in negotiated contracts with their patients and customers. This is the practice that the doctor in the story is objecting to, and the California Board of Medicine is trying to discipline her, which makes them at least de facto agents of the HMOs as well, along with the ever so accommodating California legislature.

      • drgg

        OK here is a little known fact. Pharmaceutical companies have a blank check from medicare to charge whatever price they deem and there has been legislature written to make this legal —occurred about 10 years ago. Now you are saying it is legal for doctors to be forced into contracts that they do not agree with. Gee, I wonder who wrote the law?

        I want their lobbyists is all I can say. What is also amazing is that these California ” laws” are breaking antitrust laws set in place. It is forcing a monopoly. So legislature is bought to break the law and antitrust laws. If we don’t get lobbyists and organized soon I am concerned what will happen to medicine. It is outright scary.

      • Docbart

        First of all, HMO’s are a business. Medical practice is a profession, and extorting full payment when patients cannot afford it and/or not disclosing the fee up front is unprofessional. One is hardly in a position to negotiate with the surgeon while in the ER. If a physician knows the law and is unwilling to render service under the terms of the law, they have the option not to offer the service. How can that surgeon expect to flout the law and not be penalized?

        • John Henry

          It is my understanding that the fact the surgeon was not contracted with the HMO was disclosed in advance and that the patients were told the charges and did sign agreements to pay. As well, it was reported that these were cases where patients requested plastic surgery consultation from a specific doctor, even when the ED staff did not recommend plastic surgery consultation. This certainly does not seem like extortion to me. “Flouting” the law, which anyone with open eyes can see was clearly drafted and passed with the express purpose of giving enormous economic advantage to California HMO corporations and their enrollees, and not to the public generally, as non-HMO customers can be charged whatever the doctor wishes.

          Yes, consultants have the option to refuse the service. You may soon find that to be the case with many more specialists who once provided services through emergency departments.

          • querywoman

            Plastic surgery is a specialty where the idea of medical necessity in an emergency situation is vague. Plastic surgery is not a new profession; scarification and other forms of body altering are its harbingers. What does a witch doctor charge for ritual mutilation? Is it possible to determine the true average cost of plastic surgery in the US?
            The question remains of why she would show up at the emergency room to due surgery, knowing full well how her services would be construed, and then later present a legal argument that these patients were not true emergencies. I maintain that the contracts are signed under duress and are not legally enforceable.
            Furthermore, unless she is billing and pursuing an average of reasonable and customary fees for each service, she is on tenacious ground. Hospitals have already been sued for billing the uninsured more than insured contracted rates..
            Many of the poor and uninsured use the emergency room for nonemergent care. Most of their bills go unpaid.
            I live in Texas, the chinchiest of all states, but I know that the hospitals in my city provide care that goes beyond the EMLATA.
            Her patients in the emergency room have no hunch that they will be hounded and terrorized legally for large unpaid bills. The patients know many ER bills go unpaid. So does she.

  • Peggy Zuckerman

    Somebody in the office or their associated billing service know the “fee” that is going to be charged to the patient–even if the doctor does not know–and some patients will know the associated co-pay. But NO ONE knows exactly what the patient’s insurance will reimburse the the doctor, based on the mix of contracts with the insurance company. My provider “offers” a price of $8010 for the three CT scans I must have, but that is highly discounted to the insurance company, and from that, my obligations are calculated, further re-calculated according to the deductible agreement in my insurance, and further re-calculated according to the maximum daily pay out for any daily service. Thus, that $8010 quote can become about $620 to me.

    Of late Medicare bundled two of the codes, but the discounts were not carried with the change, thus my costs were determined to be $4074. But wait! There’s more…the cash price of the same scans, no codes really all that necessary, then became $930.

    No wonder the doctor doesn’t understand all this for each patient. And should he have quoted the $8010 or $930 to the inquiring patient?

  • Dewey Jones

    The cost of healthcare has been carefully hidden by the many hands that are in the pot. It would be difficult for most patients let alone physicians to accurately talk about the cost of care in an ED situation. I am an orthopedic surgeon who routinely takes care of real emergency situations regularly from the ED, I can’t imagine trying to discuss cost at the time a patient is in pain and in need of our help.

  • querywoman

    Wow! I wanted to comment on this before, but first I had to do some legal research. I live in Texas, where wages cannot be garnished for unsecured debt like medical debt, and homesteads are well-protected from most debt, except, of course, delinquent mortgage debt.
    This plastic surgeon is filing pro se against patients, then garnishing wages and placing liens on homes in California. She has studied law, but is not licensed to practice law in California, so the state bar cannot sanction her. The courts could come down on her if they considered her filings frivolous, as they often do in inmate filings.
    Is she motivated by greed or a desire to change the law? No one knows! However, her strategy may well cause medical fees to actually become regulated.
    My understand is that a physician can legally charge whatever he or she wishes. I do understand that California has a law against balance billing for ED situations. She claims these are not really emergency patients, that their situations are stable.
    Getting them to sign a contract in the ED to pay her is legal duress, which she should know, and could make the contracts invalid. Though she is not physically threatening the patients, the idea of not getting physical help could be construed as a threat. A damaged finger is very painful.
    Plastic surgery is a costly profession, and there are many medical indications for it. She chooses to work in the ED under the umbrella of the EMTALA, and knows her state’s law on balance billing. Her idea that her services are not emergency services has not flown in court, based on the way she signs her medical papers.
    The bizarre practice of charging different clients wildly divergent fees would be illegal in any other industry. This practice has been allowed to flourish in the medical profession. Insurance contracts were once believed to bring down health care costs, but they don’t. Providers just jacked up their prices and claimed the insurance rates were discounted. Hospitals have been sued for charging the uninsured a higher rate than the insured, and settlements have been made to have the hospitals charge the uninsured a median average of insurance contracts. I have a feeling that this surgeon is billing and litigating for much higher than average fees.
    If someone like her sued me, I’d cross sue for debtor harassment, coerced contracts, and over-billing, and ask for a hefty damage sum. A few cross-actions like that would put a stop to her shenanigans more quickly than the California Medical Board.
    I recently spent 8 days in the hospital with pneumonia. I have Medicare, which paid one-tenth of the billed rate. There is no way I believe that ten times what Medicare pays was the true cost of the services.
    My understanding is that in Britain, one has the right to see a more expensive private doctor than the National Health Services provide. Is that true? The actions of this American doctor would be nice if they helped bring real regulation to American medical fees. Or should we still have the option of paying as much as we wish?
    She is delusional and petty, if she thinks she is entitled to take the house and some of the wages of a patient who probably earns so much less. Furthermore, if she studied medicine and law with public loans, she has already benefited from a public kitty and should be passing on the generosity.

  • Shirie Leng

    I agree that it is almost entirely impossible to know the cost of any medical procedure, and that the cost varies wildly. I think knowing would give people another bit of information to add to their decision-making. A person with a little skin in the game might think twice about something that is elective or futile. It is easy to say “do everything” when there is no financial consequence, or at least an understanding of the taxpayer consequence.

    • querywoman

      YUP! Most “providers’ routinely charge the uninsured more than the insured and expect them to pay it.
      Many doctors court the uninsured.
      Ideally, a person paying up front should pay less than the insured patient, since the doctor does not have the cost of submitting a claim and waiting.
      The People’s Medical Society has long advocated that doctors post their fee.
      My nearest Wal-Mart (fired Wal-Mart over a year ago) did not post the cost of glucometer strips. I asked a pharmacist why they didn’t post prices. He said because it varies according to the insurance company.
      This is insane! Somehow the pharmacist seemed to think he worked for the insurance company, and not me! There are times when I might want to pay out of pocket for strips, like if I need more and my insurance won’t allow more. Then I want to know the price! And I want the same rate my insurance company gets.
      Insurance, in theory, spreads the risk and lowers cost. In practice, it does not! Doesn’t ever one know a cash-only auto body repair is less than an insurance-paid one?

  • Skeptical Scalpel

    Thanks for all the comments.

    Let me clarify something. The specific case that the plastic surgeon was involved in was a hand injury. It wasn’t a facelift or a nose job. The patient needed emergency treatment and was not in a position to negotiate.

    For more details, please click on the link in the first sentence of this blog.

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