Consumer Directed Healthcare

Hospital billing offices are starting to act like used car lots. Get yourself a deal.

By David Whelan – Forbes.com

Eric Remjeske, 38, was skiing in Vail this February when he made the mistake of flying off a jump too slowly. He didn’t clear it. Result: broken bones in both feet and the prospect of big medical bills. So Remjeske, a financial planner who returned home to Minneapolis for surgery, set out to trim his costs. Haggle with your doctor and hospital? These days you’d be crazy not to.

Remjeske needed a night in the hospital plus an orthopedic surgeon to put two screws in each heel. His health insurance included a $6,000 deductible, along with a 20% share of any expense after that. He got quotes from three different surgeons at three hospitals and tried to anticipate related expenses like anesthesia and physical therapy. The estimates ranged from $14,000 to $18,000. He picked the University of Minnesota’s hospital, which had the lowest estimate.

After the successful surgery the bills came, totaling $16,000–more than what he’d expected. Remjeske fought back, objecting to specific hospital charges. The hospital agreed to strike a $500 charge for time in the recovery room, $200 for a leg-lifting device that Remjeske claims wasn’t used and $800 for other items including physical therapy sessions that never happened. He says he missed out on the opportunity to get a deal on his sedation medicine because the anesthesiologist wasn’t able to tell him the price ahead of time. “We think we give the best care, so it’s nice to know that we’re also competitive,” says Jennifer Amundson, a spokeswoman for the hospital.

“If you go in unknowing and come out unknowing, you could end up with an unbelievable bill,” Remjeske says.

The rise in health care costs, and especially in the share paid by the patient, is giving people a lot more incentive to screw up their courage to try to bargain down prices. Last year an average insured family spent $3,350 on copays, coinsurance (the percentage that is the patient’s responsibility), premiums and deductibles. That’s twice the average of a decade ago. Among the many uninsured patients, the ones who are not impoverished are getting skilled at negotiating. Patients pay cash for elective procedures like stomach-stapling or laser eye surgery, so these customers get in the habit of searching for bargains.

No surprise that doctors and hospitals disdain cheapskates. “Shopping by its nature assumes you can judge the quality of the product you’re getting,” says Michael Millenson, a Chicago hospital consultant. On Sermo.com, an online “virtual lounge” only open to physicians, many doctors scoff at the notion of negotiating prices with patients. “There is no negotiating,” writes one family physician. “You’d better come with your credit card or cash.”

Maybe for that physician. But working out a deal in advance makes sense if you plan on paying directly. Debra Snell, who owns T&D Body Shop with her husband in Bowman, S.C., has Crohn’s disease and has been unable to get an insurance policy, so she’s become adept at shopping for care. She cut a deal with her gastroenterologist, Dr. Narayanachar Murali, to pay $35 for an office visit, compared with $150 for a typical patient. For a scope of her lower intestines she pays $400 rather than $750 (or $1,500 at a hospital). Dr. Murali agreed to the lower fees because she pays promptly and fills out her paperwork ahead of time. “Most uninsured people who see me do this part of the work and get quality care at a very low cost,” he says.

Comparison-shopping with hospitals is tricky. One hospital might have 30 different insurance contracts and the same number of rates that it charges them, plus a list price inflated to double or even triple those rates that it charges customers who lack insurance. Out-of-network providers are the most likely to charge sky-high prices. Beware also ancillary providers, such as anesthesiologists, pathologists, radiologists and pharmacists, who might bill separately from the hospital and the surgeon. For those shopping ahead of time, it pays to compare the prices with benchmarks. Healthcare Blue Book, a Web site that launched this January, will tell you what big insurers, the ones with bargaining power, are paying in a given zip code.

Once a bill comes the strategy changes. There are companies that will negotiate a bill on your behalf for a third or so of the savings. Typically they make an offer based on an estimate of what patients with in-network insurance are paying. John Gillis, president of Insnet, a bill negotiator in Scarborough, Me., recommends that those patients confident enough to do the negotiations follow a script. First ask: “Are you authorized to give me a discount?” If yes, “What is it?” Then ask: “Who is authorized to give me a bigger discount?” Ask to speak to that person. When it comes time to discuss specifics, come armed with data on what other patients have paid for similar services. Gillis says he is successful three in four times, once knocking 55% off a $180,000 bill from a New York hospital.

Other negotiation services are geared more toward bill review. Candice Butcher, who runs Medical Billing Advocates of America in Salem, Va., recommends asking for an itemized statement from the hospital, which will typically run many pages. Double billing is common. Some of her tips include making sure that you aren’t being billed separately both for a room and for all the standard amenities in a room like sheets and a toothbrush. Similarly, if you have surgery, she says look for items like “kits” and “trays” and make sure there aren’t also individual charges for specific surgical instruments. Ultimately you can get a 35% discount from the inflated list price just by challenging individual items, she says.

Hospitals often prefer to chop a bill down in percentage terms rather than fight over individual charges. Todd Roscoe, a former executive at the hospital chain Tenet Healthcare, says that a 40% discount off the inflated list price is the norm for cash-paying customers.

A 61-year-old woman living in Albion, Pa. got a $13,000 bill recently for an emergency hospital admission for chest pain and high blood pressure. Her “indemnity” insurance turned out to be a bust–for $320 a month it will pay at most $1,100 in room and board at the hospital but won’t cover drugs or procedures. She went to the hospital billing office where a rep offered her a 50% discount because she was paying herself. Since she was unemployed, the assumption was that she would pay it off month to month. From $6,500, she asked what they would charge if she paid it all at once and she got another third off the bill. She is in the process of paying just over $4,000 by cashing in a 401(k) account.

James Muckle, who manages a 32-unit apartment building in Sebastopol, Calif., had a similar experience. He got hit with a $6,000 bill after a four-hour visit to the er that consisted of a diagnosis of kidney stones, pain pills and instructions on how to pass the stones. He called the hospital and politely noted he was surprised by the charges. He says he was offered a 40% discount if he paid within 30 days. After an hour of back and forth, asking the clerk to explain each charge, he asked if he could pay $1,000. The hospital countered with $2,300, and he eventually paid $2,000. “Maybe I should have pressed it a little more,” he says.

Medical Markdowns

These web sites publish the prices of procedures, which help when negotiating. Remember that hospital fees are different from physicians’ fees. Also, the cost of imaging, drugs, lab work and anesthesia are often billed separately.

Healthcarebluebook.com
Changehealthcare.com
Outofpocket.com
Myhealthscore.com

These companies offer bill-negotiation services for the nonconfrontational. They typically charge a contingency fee based on the percentage of savings achieved:

Myinsnet.com
Medicalcostadvocate.com
Billadvocates.com

Popularity: 2% [?]

President Obama is getting ready to push his health care reform plan in a prime time press conference tonight. He’s hoping to win over the American people as well as members of Congress who are skeptical about the plan.

Rep. Ron Paul (R-TX) has been a very vocal critic of the president’s plan. He spoke to Kiran Chetry on CNN’s “American Morning” Wednesday.

Kiran Chetry: You’re a physician as well and I’m sure that you have a lot of thoughts on this issue as we debate health care. You oppose President Obama’s reform plan. You favor giving Americans control of their health care. Does it boil down to two different philosophies over who should get health care coverage? Do you believe not everyone can expect free or low cost health care?

Ron Paul: Yeah, I think there’s a lot to that. But I come from the viewpoint that the most important thing we do is preserve the doctor/patient relationship, which we do not. For the past 30 years or so we’ve had a lot of government involved. We have veterans care, we have Medicare, we have Medicaid and we also have a lot of people getting private insurance. People having private insurance are not all that unhappy. So what are we doing now or at least Obama is proposing that we turn the people that have service on insurance and make them join the governmental programs that everybody is unhappy about.

So it doesn’t make any sense. It’s a total failure to run anything by a bureaucracy. It always costs more and the services are always less favorable. So for us to pursue government solutions to a problem the government created sort of reminds me of the T.A.R.P. bailouts. You know what we do financially. So medical bailouts by more government when government created our managed care system of 35 years will only make things much worse.

Chetry: One of the things we’ve talked about is whether or not independents are backing this. There seems to be some eroding support because of concerns about whether or not we can afford it, whether or not the timing is right. Even though there is that apprehension right now about whether or not we can afford it most do agree that we need to do something about health care. Is there a Republican alternative out there that makes more sense in your opinion?

Paul: Oh, yeah. I think so. I think we should pursue the idea that the patient get control through the medical savings accounts and deductions so that you can deduct everything. The biggest problem is the misunderstanding about insurance. They talk about we need to give everybody insurance. You can’t give people insurance – you don’t expect from your car insurance to be able to buy gasoline and do all your repair bills and that’s not insurance. And this is not insurance either. Insurance would be major medical to take care of the big problems.

That is one of the basic problems. As far as costs goes, they’re estimating $1 trillion or $1.5 trillion in the midst of this crisis no wonder people are starting to wake up a little bit. Because the money just isn’t there. The one thing for sure, is if you look at every other previous program by government, if they proposed that say the prescription drug program would cost $49 billion, well, it might turn out to be $150 billion. It’s always much more so if they’re saying $1.5 trillion for this, be sure it’s going to cost two or three times that much.

Chetry: What do we do, though, about this problem with, you know, uninsured children, many people uninsured – the millions? Your state by the way, according to the United Health Foundation survey, ranks 46 out of 50 in terms of overall health. And one of the biggest challenges for your state right now is that there’s a high percentage of children in poverty and a big uninsured population. So, there you are opposing this, your state seems to be in dire straits when it comes to this situation. What’s the solution for Texas?

Paul: Well, one thing you have to do is say, why do people come up short and why is the cost so high? It’s inflation and it’s a government management of the health care system that is at fault. But even though I have my ideal system I would like to see with the government out completely because that would be a much better system, that’s not going to happen. I’m realistic. One thing we shouldn’t do is pay for it with money created out of thin air. So what I would do in a transition, I’ve talked about this a whole lot, is cut spending somewhere and take care of the very people you’re talking about. Because you don’t want to cut, under these conditions, medical care from poor people who have been dependent or the elderly.

But I would cut from overseas spending. I would cut from these trillions and trillions of dollars that we have spent over the years and bring our troops home so that we can finance it. A first, very, very minor step was done yesterday by cutting the F-22. I applaud Obama for that. We don’t need one system removed – we need to change our foreign policy. Then we could afford the health care that is necessary to tide us over until we have come to our senses and believe freedom can deliver medical care much better than a bureaucracy in government. You have to deal with the problem of inflation as well because that’s why people find that medical care costs too much.

Popularity: 2% [?]

By Fred Lucas, Staff Writer

(CNSNews.com) – Voters in Arizona will decide next year whether residents will be subject to mandates in the pending health care reform that President Barack Obama and congressional Democrats are promoting.
 
At least five other states – Indiana, Minnesota, New Mexico, North Dakota and Wyoming – have considered proposals to take pre-emptive action against the pending federal mandates, but those proposals have either not made it out of committee, failed to get enough votes from one side of the legislature, or are still being crafted.
 
Only the Arizona Legislature introduced an initiative (HCR2014), which if passed, would amend the state constitution to codify that no resident would be required to participate in any public health care option. Arizonans will vote on the initiative in November 2010.
 
“HCR2014 is proactive and will protect patients’ fundamental rights,” Arizona State Rep. Nancy Barto, a Republican, said in a statement. “We are a front-line battle state to stop the momentum of this powerful government takeover of your health care decisions. Health care by lobbyists thwarts your rights and can be stopped here.”
 
The main issue is the core of the Obama health plan – a government run or “public option” – to compete with private health insurers. Some state lawmakers fear such legislation would force residents to buy into the public plan.
 
“The eyes of the nation will be on Arizona next year to see what happens,” Christie Herrera, director of the Health and Human Services Taskforce with the American Legislative Exchange Council, told CNSNews.com. “If this succeeds in Arizona, other states will take notice and push harder.”
 
The Obama administration insists that the public option will provide another choice for Americans who are not insured or are unhappy with their current insurance and will force private companies to be more competitive.
 
Critics of the plan say private firms could not compete with a public option – with unlimited government resources – and thus would go out of business, leaving what is tantamount to a single-payer system in place.
 
What happens in Arizona could spur other states to pass similar laws or constitutional amendments, said Wisconsin State Rep. Lea Vukmir, a Republican, who sponsored similar legislation in 2008 that passed the House but failed in the Senate. 

If the Obama administration’s “public option” becomes law before Arizonans vote in November 2010, their initiative would still allow the state the challenge the Obama plan.
 
Vukmir said that the Obama proposal could be unconstitutional, under the Tenth Amendment, which states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
                          
“I’m a strong believer in the Constitution and the Tenth Amendment,” Vukmir told CNSNews.com. “The Tenth Amendment has been eroded by Congress and the Supreme Court for decades. We have to ask, does the Tenth Amendment have any meaning? We are supposed to have strong state governments and a weak central government. That has eroded away.”
 
Georgia State Sen. Judson Hill, a Republican, said that the Obama plan would put a big strain on state budgets and told CNSNews.com that he would be interested in introducing similar legislation in the Georgia state house.
 
Medicaid and S-CHIP payments to states already make cutting costs untenable for states in lieu of a benefit cut or tax hike, Hill said.
 
He has introduced legislation to use state medical grants to go directly to patients as a sort of medical scholarship. (S-CHIP is the acronym for the State Children’s Health Insurance Program, run by the federal Health and Human Services, which provides matching funds to states that provide expanded health insurance programs for families with children in low- to moderate-income brackets.)
 
“I call them federal crack dollars,” said Hill. “States get addicted to health dollars sent by the U.S. government.”
 
Arizona’s Health Care Freedom Act, firstly, establishes the right of state residents to spend their own money to seek and receive health care and, secondly, the right to choose not to participate in any health care system of any type.
 
An advocacy group was started to campaign for the amendment.
 
“Protecting the rights of individuals to be in control of their health and health care must be a fundamental component of health care reform, so the Arizona legislature is to be congratulated for giving all Americans the opportunity to make certain our voices are heard,” said Dr. Eric Novack, chairman of the group Arizonans for Health Care Reform.

 

Popularity: 3% [?]

WASHINGTON (CNN) — Vice President Joe Biden on Friday tried to rekindle momentum for overhauling health care, warning a group of small business owners that failure to act soon would have catastrophic consequences for the private sector.

Biden made his pitch as senior administration official Nancy-Ann DeParle huddled with Democrats struggling to forge a consensus on a health care bill before the planned August congressional recess.

Health care reform is the “foremost economic and moral issue that this administration is determined to deal with,” Biden told the business leaders at a meeting near the White House.

He noted that premiums for employer-provided health insurance have doubled in the past nine years, rising three times faster than wages.

As a result, small business owners are “being forced to make some very difficult and … unnecessary choices,” he said. “[They] are faced with deciding to provide coverage that is increasingly swallowing up more and more of their bottom line, not providing coverage at all or having to raise the cost of the service or product they’re selling, making them uncompetitive.”

Biden also argued that the federal government “cannot sustain this trajectory of health care costs … and think we’re ever going to get control of our fiscal house.” 

The vice president’s remarks came a day after fiscally conservative House Democrats known as “Blue Dogs” effectively put the brakes on health care legislation by pressing the Democratic leadership for significant changes to the draft bill.

As Democratic leaders worked feverishly to finalize details of the legislation, initially slated for a Friday rollout, the Blue Dog Coalition released a letter Thursday night saying the bill “lacks a number of elements essential to preserving what works and fixing what is broken.”

Forty of the group’s 52 members signed the letter, making it clear that a major block of the House’s Democratic Caucus wants some concessions in return for their votes. Shortly after the letter’s release, a group of Blue Dogs met in the office of House Speaker Nancy Pelosi, D-California, with other leaders for nearly two hours.

Rep. Mike Ross, D-Arkansas, a leading negotiator for the Blue Dogs on health care, told reporters that he and Reps. John Tanner, D-Tennessee, and Allen Boyd, D-Florida, also met with White House Chief of Staff Rahm Emanuel on Wednesday to go over their concerns.

“The message to him was the same as to the leadership — that we could not support the current bill,” Ross said.

Boyd said that no deals were struck Thursday night, but the group agreed to meet Friday with Reps. Henry Waxman, chairman of the House Energy and Commerce Committee; Charlie Rangel, chairman of the Ways and Means Committee; and George Miller, chairman of the Education and Labor Committee.

Boyd and other members representing rural areas pushed leaders to adjust the rates that Medicare pays rural doctors and hospitals for health care services.

“From a practical standpoint in terms of a timeline, a bill doesn’t come into the House chamber until you’ve got the votes to pass it, and I don’t think they have the votes to pass it at this point,” Boyd said. “We’ve got to try to get to point where we’re comfortable.”

Pelosi on Thursday repeated her pledge that a government-run health care plan would be included in the House bill, but Ross said conservative Democrats have major reservations about how a public option would work.

In the letter and in the meeting, the conservative Democrats stressed they did not want a “Medicare-like” structure for a public option.

“What we are saying is — if there is a public option, it can’t be based on Medicare rates unless the regional disparity in Medicare rates is fixed,” said Ross, who also plans to press for more controls on government spending on health care and more savings from changes to Medicare.

House Majority Leader Steny Hoyer, D-Maryland, waved off any suggestions that Thursday night’s development was a setback.

“Let me make it very clear that everybody in that room thinks we ought to pass health care,” Hoyer said.

But he acknowledged they still need to work through the details.

Popularity: 2% [?]