Tuesday, November 04, 2003

Thanks to all who submitted comments to my post about the Wall Street Journal story last Friday. (Although not all were happy, but more on that later) I asked Matthew Holt for his opinion on this from a health policy standpoint, and he graciously responded. While I may not agree with all of his positions, I respect them and find them well thought-out. Here goes:

a) While it's true that this is a tiny minority of patients, it is symptomatic of the problems many Americans have paying unexpected medical bills. It's extremely unlikely that the financial benefits of collecting some of this money are worth the bad publicity these institutions just got.

Hospitals are some of the most public-relations sensitive institutions around these days. As shown here, here, and here the hospital mentioned in the story is taking a beating in the press over this.

As is now quite widely known, the uninsured often get charged the highest prices by hospitals, as they do not have the ability to get discounts off the "list price" as do insurance companies. This "reverse" price discrimination isn't exactly equitable or ethical..... Hospitals used to write all this bad debt off, and would charge more to well-insured patients to make up the difference. Starting in the late 1980s aggressive insurance companies lowered their payments and got rid of the hospitals ability to cross-subsidize from "rich" patients to poorer ones. But of course apart from the DSH program for a few inner city hospitals who treat a lot of uninsured patients, no new system of cross subsidization has been created.

As I posted (scroll down to October 3)here in "the good old days" this debt could be written off without hurting the bottom line, since you could "balance bill" the rest away. Not anymore.

Mr. Holt then writes:

The best system of cross-subsidization is called insurance. The people shipped off to prison in the article (and another 42 million Americans) didn't have it usually because they are too poor to buy it (or not forced by law to buy it) and because the market for individual insurance is dysfunctional. I'd rather have our sheriff's deputies out preventing crimes, rather than acting as debt collectors for hospitals. The way for that to happen is for policy makers to create an insurance system that works for the working poor including forcing them to participate. Then hospitals wouldn't be bill collectors and patients wouldn't have to avoid needed care for fear of not being able to pay. Hospitals would be better off in the long run if they put their considerable political clout behind the creation of such a system.

I agree (scroll to October 1), as I quote myself:

1. Disassociate health coverage from employment. Individuals should be able to purchase insurance themselves, and take it from job to job. They should get the tax benefits that companies get now on the premiums.
2. Individualize plans. Why should a young, healthy twentysomething have a plan with drug coverage? One reason why plans are so expensive is that they all have to include coverage for things that a person may never need.
3. Require some level of basic coverage to be purchased. This applies to auto insurance in my state, and will help spread the risk pool.

As you can see from the ungodly hour that this is being posted, I am on call and now have to go operate. When does my 80-hour week kick in?
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