Heroes, Hospitals and Transparency

Whether the word “hero” has been overused to the point of meaninglessness during the pandemic is worthy of debate, few would question that health care professionals have done themselves proud in their dedication to serving others, at grave risk to themselves and their families and under conditions that no doctor or nurse should endure.

And some of that magic rubs off on the building where this happened. Without ICU beds and, dare I say it, ventilators, how could the defense against COVID-19 have been as valiant as it has? So hospitals get our love too, to the tune of $100 billion in the stimulus package plus whatever additional monies they can glom off the $349 billion in rescue money. And as additional funding gets debated within the bathrooms of Congress, the Democrats are seeking another $100 billion dedicated to hospitals. After all, they’re heroes, right?

The nation’s hospital groups sued the Trump administration on Wednesday over a new federal rule that would require them to disclose the discounted prices they give insurers for all sorts of procedures.

They argued that the administration exceeded its legal authority in issuing the rule last month as part of its efforts to make the health care system much more transparent to patients. The lawsuit contends the requirement to disclose their private negotiations with insurers violates their First Amendment rights.

It’s not their “private negotiations” at issue, but the end result of those negotiations, the charges paid by insurance companies and accepted by the hospitals. If a hospital charges an insurer $12 for a saline drip, why do they charge you $19,478 (I’m making these numbers up, but then, so do hospitals so fair is fair)?

Enter into the mix the now-understood and appreciated fact that hospitals stock up on things they might not need at the moment, like personal protective equipment and ventilators, just in case a pandemic strikes. There they are, sitting in a storeroom in the basement of the hospital, unused and uncharged for, but available in case of emergency.

Somebody has to pay for them. And if they are never used, and neither you nor insurers are ever billed so they exist merely as an expense to the hospital, somebody has to cover the cost. It’s even worse when the stored items have a shelf-life and eventually get thrown away or sold on eBay. You want hospitals to be prepared, don’t you?

American hospitals are taking a scalpel to the hands that feed them. They have received $100 billion in coronavirus bailouts from the federal government, and they can draw on the $349 billion in rescue funds for businesses. At the same time, they have the gall to sue the government — to block new federal rules requiring them to come clean about their opaque prices.

Last week, hospital groups ­requested virtual oral arguments in their lawsuit, which has been postponed by the outbreak. Meanwhile, congressional Democrats have demanded an additional $100 billion in hospital funding on the grounds that the original tranche wasn’t enough to cover corona-induced costs.

At essentially the same time, hospitals are beloved as our heroes, and appreciated for what they are and have been capable of doing to save our lives even as government preparedness has fallen a tad shy of responsibilities at times, and yet are in court arguing that the prices charged the big boys shouldn’t be revealed or you’re going to be miffed when you compare them to the deal revealed on your surprise hospital bill.

Clear prices before care are the key to reducing out-of-control health costs. They will allow ­patients and employers, which provide health coverage for 181 million Americans, to shop around for the best quality of care at the lowest price.

Revealing this information threatens hospitals’ sky-high revenues, which depend on a murky price model ripe for price-gouging, overbilling and waste. Hospitals deviously pass on these costs to powerless, often ­unsophisticated patients via bills weeks after treatment.

We have an unfortunate tendency to valorize or vilify based on the one thing, the last thing, in the public consciousness. At the moment, hospitals are wonderful, beloved and adored as the places that allow our heroes to save lives. Indeed, they are perceived as heroes themselves, even if they’re buildings with beds and their respective pans, and inanimate objects can neither be good nor evil.

Perhaps the administrators who had the foresight to stock up on a month’s supply of PPE for our heroes are hero-adjacent? In any event, they are not the evil behemoths who send out bills for absurd amounts that destroy lives of the un- and under-insured. And, of course, those who can’t cover the $16,300 deductible and co-pay of Obamacare.

The novel coronavirus doesn’t obviate the need for price transparency — it only reinforces it. The Trump administration has (rightly) announced that the government will shoulder the cost for coronavirus treatments for the ­uninsured. Congressional Democrats want a similar guarantee from health insurers for those in the private market.

America got a free ride on the hospital cost of coronavirus, which is good in the sense that it enabled anyone who couldn’t breathe to go to the emergency room without having to consider the impact on the rest of their lives. Then again, why that shouldn’t be the same for a heart attack or stroke is a mystery as well.

But when payment is mandatory and prices are opaque, providers can jack up rates without repercussions. Price transparency for treatments provides accountability for hospitals, arming patients and ­employers with the information they need to shop for value.

Do people price shop doctors or hospitals? When an emergency strikes, do you call the local ambulance to inquire as to their pricing options? Would you negotiate with your surgeon on the operating table? Few of us would. At least few who value their lives. But after the pandemic, the heart attack, the stroke, a bill will arrive at your door step for some absurdly high price, maybe for some services never performed, and you will have basis to challenge whether your hero just charged you for ventilators in the backroom that the government paid for with its bailout.


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12 thoughts on “Heroes, Hospitals and Transparency

  1. Not Harold

    Doctors are professionals who need to be paid like any other.

    Lawyers should be particularly familiar with the pay and service quality received from various sources and how “essential and free” works for both the clients and the practitioners. There’s a reason why most officers facing serious charges hire private counsel instead of using JAGs and we’ve all seen what PDs are like even in places like NYC.

    On heart attacks an other emergencies – people absolutely do shop. Unless you collapse on the steps of a hospital you or your loved ones can look for the best quality option, an in network option, etc. Do you drive to the community hospital or go another 5 minutes to the hospital with a specialist cardiac unit? Paramedics even do this shopping for you – driving to a tier 1 trauma center that might be a bit further away than the closest ER.

  2. Kathryn Kase

    Public health authorities have been warning elected officials, bureaucrats, and the public for as long as I’ve been in local government (three years) that the next public health threat would be a virus akin to the flu, and very likely not bioterrorism (as Fox and friends would prefer to yap about). If federal and state authorities chose not to heed those warnings or, worse, cut funds for public health planning as the feds did and a number of states did, then needless deaths and bailing out private hospitals are the price of the views that led to those budget cuts.

    I know who’s paying for the hospital bail outs. To be determined is who will pay for the needless deaths.

  3. L. Phillips

    When I first stumbled into the lobby of this hotel the quality of writing and reasoned responses (most of the time) made being here a daily intelligence test.

    For reasons I don’t claim to understand, lately it is more like watching Rorschach tests.

    Maybe we could agree to leave the snark and diversions behind – except for Tuesday Talk and CLS on Friday. For my part I promise to shut up, read, and enjoy learning.

    1. SHG Post author

      That’s an interesting observation. An example or two would be helpful to me to better understand. If you prefer, send me an email, but I would like to know what you’re seeing.

  4. The Real Kurt

    It seems, at some level and in some ways, that most, perhaps near to all, health care is truly a government enterprise.

    That’s how I read it, based on the amount of government funding that’s received by most health care facilities, regardless of whether they are “private enterprise” or not – including (especially?) supposedly non-profit entities.

    Thus, it seems appropriate that transparency in pricing should be the rule, based on the idea that “If you get and depend on government money to run the organization, you are an arm of the government, and government agencies must account for their finances.”

    The Real Kurt

  5. Dan

    Do people price shop doctors or hospitals? Look at procedures that aren’t generally covered by insurance (e.g., LASIK or cosmetic procedures), and therefore have relatively transparent pricing, and you may get a different answer than you expected. People won’t always go for the lowest price (I certainly didn’t when I has LASIK done), but it’s certainly a factor–if nothing else, you need to convince yourself that you can afford it. And if Surgeon A charges more than Surgeon B, you know that, and you can then ask what you’re getting (if anything) for the extra money.

    But even if you’re not going to price shop, you need to be able to find out what a procedure is going to cost. Your MI is going to happen when it happens, and that’s when you’ll need whatever treatment you’ll need (and any shopping you’ll be doing then isn’t going to be for price, but for the best hospital/clinic/doctor you can get), but your knee replacement is scheduled, and you have some flexibility in that. What that’s going to do to the family budget is a legitimate factor in that scheduling, but only if you can find out that information–a colleague of mine several years ago tried pretty hard, but AFAIK was unable to get that information before the procedure.

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