Ever received a bill for a health service that troubles you? Does it seem too much?
Is it hard to understand what you owe from what insurance pays? Does it seem like the share you pay always goes up?
Medical costs are a universe unto themselves. How doctors and medical facilities (hospitals, radiology practices, etc.) come up with their charges seem to lack any rational basis.
Famously, in his article that became a book, author Steven Brill challenged the CEO of a big health insurance company to explain his ‘explanation of benefits’ (the bill-like statement you get that is NOT A BILL), and the CEO couldn’t do it. Here Brill recounts the story in an interview with Minnesota Public Radio. Context — Brill had a big operation for an abdominal aortic aneurysm, so he decides to use himself as a test case:
After I got home, about 2 or 3 days later, I received in the mail 36 different explanations of benefits from my insurance company, in 36 different first class envelopes, which tells you something about how inefficient the system is.
As I started to open them, I thought to myself: I’m the world’s leading expert on hospital bills and insurance bills, this is going to be fun. When I opened the third envelope, it said the following. This is an explanation of benefits from United Healthcare, which is headquartered in Minnesota: Amount billed: $0; amount paid by insurance: $0; amount you owe: $154.20. I looked at it and I looked at it. If nothing was billed, how could I owe $154.20? I turned it over, I tried to decode it, I couldn’t figure it out.
As it happened, before I went into the hospital, I had scheduled an interview with the CEO of United Health out in Minnesota … So as soon as I was able to travel, I went out to Minnesota and I did the interview. … And then at the end, I reached into my pocket and took out that explanation of benefits and handed it to him. I said: “I’m wondering if you could just help me understand this, I’m having trouble figuring out what this means. How could I be billed $154 if nothing was billed?”
He looked at it and he looked at it, he turned it over, he looked at the coding, and finally looked up and said to me: “I could sit here all day and I could not explain that to you. I have no idea what it means. I don’t know why they sent it to you.”
I said, “Aren’t you they?
That explanation of benefits is the single most common form that consumers receive in what is by far the largest industry in the United State: The healthcare industry. Tens of millions of those explanations of benefits go out from United Healthcare every year, and the head of the company can’t even understand what it means, so how are the rest of us supposed to understand what it means?
As an entree to discuss the issue of health costs in the U.S., and people’s disparate reactions to them, I share with you the story of Mrs. Sutton, a patient of mine who had a somewhat atypical reaction to the cost of her colonoscopy — even though she owed nothing out of pocket. I also want to emphasize how poorly doctors do in helping patients anticipate their costs of care. Reliable pricing information is hard for us to come by, too — as some commenters note. But some new companies (apps, of course) are trying to tackle this issue head-on.
Click on the box below to read it. Feel free to add your own story to the mix.
Thanks for reading.