Healthcare - Billing Nightmares

Last time I listed eight issues that must be addressed to bring down and control the cost of healthcare.  I discussed the problems of over testing and the inconsistency in content and  pricing of services.  Both are compounded by the lack of openness built into our current system. 

Another problem with the healthcare delivery system comes under the heading of records and billing.  The records side has gotten some attention lately with politicians rightly calling for a move to electronic medical records.  The cost would be around $100 billion, but savings is estimated at $200 to $300 billion per year.  This is a topic in itself, but here is one source for more information.  Unfortunately, progress seems to be slow with no apparent "champion" for the cause.

Another problem that most of us have experienced is caused by a lack of a centralized billing system.  If you have a major procedure, the paperwork involved is unbelievable.  You get no meaningful information from the providers until they submit it to your insurance company.  Then you get an explanation of benefits (EOB) from the insurance.  An EOB has four numbers:  what the provider billed, what the bill really is (due to insurance negotiations), what they will pay and what you owe.  (Why doctors and hospitals bill one amount but are willing to accept less is interesting.)  Later you get billed for what you owe. 

Even for a simple visit you may receive two or three EOBs, but for a major procedure you receive a long series of EOBs and bills over time.  They just seem to keep coming.  You get them based on each provider, even some you don't recall ever seeing.  Months go by.  When you think you have seen the last one, another arrives in the mail.  It’s so confusing that many people, even very organized people, just pay the bills as they arrive trusting that the insurance company and the medical offices have not made mistakes.  This is the opposite of being a “smart shopper” but since you have no estimate to begin with and no clear idea of prices (as mentioned last time), what choice do you have?  The concept of general contractor is foreign to healthcare providers leaving us to fend for ourselves, fighting through an avalanche of paperwork.

Some of this might be solved if our doctors referred to us as customers rather than as patients, but the role of insurance coming between the provider and us makes them the primary payer and isolates us from any meaningful information regarding negotiation or pricing.  (This gets back to the initial issue of insurance design.)


In summary, I have shown in the last two installments that controlling healthcare cost is a lot more than providing insurance for everyone.  The entire system is out of whack and needs attention.  Without that attention, we may be able to afford our regular visits or emergencies, but the continued inefficiencies will come back to haunt us in the form of higher taxes, higher premiums, lower wages (to offset employer costs) and higher prices for nearly everything we buy - all to cover the continuing upward cost spiral.  There is no magic money tree to cover this.  It will come back to us in the end.