Lose your health coverage? Don’t hesitate to haggle with medical providers

BY DAVID LAZARUSBUSINESS COLUMNIST
AUG. 6, 2021 6 AM PT

 


The Camarillo resident worked for a Los Angeles tech startup that, like most companies providing full-time employment, offered health coverage as an employment benefit.</span


“Basically the company started running out of money last fall,” Pelletier, 60, told me. “We stopped getting paid salaries but they kept our health coverage going.”

For a while.


“I went to a couple of recent doctor appointments,” Pelletier said. “One of the doctor’s offices told me my insurance had been canceled. That’s how I found out.”


And just like that, he was on the hook for more than $8,000 in inflated medical bills.


These included about $1,200 billed by his Westlake Village doctor for a routine physical, $1,800 for blood work related to the physical, and around $5,300 for a throat specialist at UCLA treating what Pelletier called “messed up vocal chords.”


He contacted his doctor and UCLA to explain the situation. Both responded by offering discounts for treatment provided.


The one holdout: Quest Diagnostics, which wanted the full $1,800 for Pelletier’s lab tests.


“I spoke with a number of people at Quest,” he said. “They told me it’s not their policy to negotiate prices.”


This is another example of the in-it-for-the-money nature of the $4-trillion U.S. healthcare system — an approach that all too often places profits ahead of patients.


It also yet again illustrates the ridiculousness of linking health coverage to people’s jobs. Lose your job, lose your health insurance.


Is it any wonder a 2019 study found that medical bills were a primary factor in about two-thirds of personal bankruptcy filings? More than half a million U.S. families go bankrupt annually because they can’t afford healthcare.


A key problem here is doctors and hospitals routinely billing insurers insane sums to nudge reimbursement rates higher.


List prices for healthcare, known as the “chargemaster,” are usually orders of magnitude higher than actual treatment costs or the amount providers will settle for from insurers.


A 2016 study found that most hospital chargemaster prices are four times greater than the actual cost of providing treatment.


Some healthcare services, such as CT scans, were billed at levels nearly 30 times higher than the true cost, the study found.


The researchers concluded that there’s no reason for this other than to boost profits. “Markups are being used to maximize revenue,” they said.

 

In the first half of the year, HCA Healthcare, the country’s largest hospital company and the industry bellwether for earnings, reported nearly $3 billion in profit.


UnitedHealth Group, parent of UnitedHealthcare, the country’s largest private health insurer, took in more than $9 billion in profit during the first half of the year.


Outlandish chargemaster pricing isn’t just an accounting gimmick. It has very real ramifications for patients, especially those who fall between coverage cracks.


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