I realize the entire word of medical bills and health insurance is going to change drastically next year. For the time being it is a total clusterfuck for the uninsured and only slightly better for the insured.
Now let’s look at how this applies to real people who sustain serious injuries in car accidents.
One of our clients was in a horrible crash and broke both lower leg bones. He had external fixator rods installed at Grady and then came back a week later for a second surgery to have internal fixation rods installed. Grady apparently did good work on the client and he appreciates them saving the leg. The problem is that our client has no health insurance and no significant savings. Grady has presented a $100,000 bill for services rendered. Had our client had health insurance, the same procedure would have cost $35,000.
Our client is an uninsured limo driver, aged 34. He served in the Israeli military as a young man and made a decent income as a driver. He is a good citizen, he just could not afford a health insurance policy.
The vehicles involved in the crash have only $150,000 in insurance coverage to pay for his injuries and the individuals have no personal assets. These are unfortunate facts and any plaintiff’s lawyer will tell you, there are a lot of “two-legged stools” out there. A two legged stool is a case with two of the three requirements necessary for a successful claim. Damages is one leg. Liability is a second leg. Enough insurance to cover the damages is the third leg. Many claims are missing one critical leg. In this case our client does not have enough insurance to cover the serious injuries and as I said that is a common fact pattern.
The problem is Grady Hospital and every other hospital that treats the uninsured completely differently from the insured. Well “duh” you might say. People buy health insurance for two reasons; to spread out the payments for medical care and catastrophic events and to secure a lower negotiated price for medical care.
The inequity arises in that hospitals all but conjure a price for services. I am sure there are complicated tax reasons and Federal funding requirements for the prices they choose but the ultimate truth is that there is little basis in reality. There is a total disconnect between the price a hospital charges for a particular service and what the market really pays for those services. One hospital may charge $18,000 for a rotator cuff surgery and another will charge $45,000.
In any sane market, the price is determined by what people actually pay for the service. The buyers in this market are not private individuals, they are large insurers. They set their prices with bulk buying and beneath them is the floor of what Medicare will pay.
So we have a good idea of what these services can be bought for and still allow the hospital to make a profit. We can agree that the private uninsured buyer should not get the benefit of the same price the insured pays. But, we disagree that the uninsured should pay 3 times what the insured pays. Given that a patient in an emergency room setting has absolutely no control over the price they pay and is by definition in an emergency situation; how is it not price gouging?
As universal health care spreads out across the country next year, we can only hope that, these situations occur less and less, but until then, our firm will continue to fight with price gouging hospitals.