re: Why do hospitals have their people send separate bills?

quote:

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What if you went to a restaurant where the meal on the menu was $20 but your bill was $100 because they brought in a gourmet chef from the restaurant down the street to make it.

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Eh. Not quite. This is a second comparison to unlike things in this thread. I'll first point out that not all businesses/entities are similar nor should all things be run similar. The first comparison was that a hospital should be run like a hotel (in that we should be upset for multiple bills rather than one, single itemized bill). Well, hotels, Burger King, the New Orleans Saints, and my local sheriff's office run differently, and I'm quite happy for it. Different industries run different ways, and just because they are businesses does not mean they should conduct billing practices, advertising/marketing, or profit sharing for holders (should that exist) in the same way.

In terms of billing:
1) it's fricking insane, I agree. I'm almost embarrassed to be a part of it. It's beyond cumbersome.
2) you must have one fee schedule (things must have a set cost that doesn't change)
3) insurance companies reimburse some maximum amount. For hospitals (which operate at under a 3% margin, and closer to 1% on average), this means setting the charge above whatever the highest payer pays to not lose potential reimbursement
4) to go back to your restaurant analogy, it's more like the restaurant deals with a lot of people with a per diem. It charges you $100 but really intends to take your per diem and the rest is done away with. If you're a state representative, that means you get $50/meal. But if you're an accountant for a private firm, you're limited to $35. Every now and then, a top-level guy from a Fortune 500 company is allowed $85 for the meal. If you don't have a per diem, they will give you a "cash discount" and work with you so that you only pay $20, which allows them still to make a small profit while not breaking your back for the nice meal you bought.

Single payer gets rid of most of these problems (and creates a host of others). Another solution is direct billing of the patient and allowing them to deal with the insurance company on their own for reimbursement- this would be phenomenal for my practice, but I'd imagine I would lose a heck of a lot of patients over it. But alas, so long as we live in a world where healthcare providers and hospitals must bill one amount to be reimbursed multiple different amounts, you will see falsesly high charges that are made up numbers simply so the providers can be reimbursed at the level the insurance company intended to reimburse all along.


It's a horrible system. I do not intend to make physicians and/or hospitals innocent in the game, but in this instance, CMS/insurance companies are the drive behind the structure for reimbursement at the present time.
There are multiple other reimbursement structures out there. I don't believe any of them will take wide effect in the near future. Even if they do, you'll likely see an influx in cash pay clinics to avoid the new set of headaches that will inevitably arise from the new system's adoption.