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Elisabeth Rosenthal deserves a CJR laurel for her Sunday New York Times article, the latest installment in her “Paying Till It Hurts” series on why and how the cost of American healthcare is so exorbitant.
It’s a standout series, and this may be Rosenthal’s best story so far. In chronicling the troubles of Peter Drier, a 37-year-old New York City resident who had surgery in December to fix herniated disks, Rosenthal zooms in on a serious and growing problem confronting patients all over the country: Bills from providers who are outside their insurers’ networks can amount to big, big money. Drier got stuck with a $117,000 bill from an assistant surgeon he never met and whose care he had never approved.
In an interview with CJR about the series earlier this year, Rosenthal said, “I didn’t want to look at rare medical events but instead at encounters that everyone relates to.” With Drier she scored a hit. As higher cost-sharing and more out-of-network providers make the healthcare system harder to navigate, and providers push back on efforts to control costs, many of us could find ourselves in Peter Drier’s predicament. And we won’t all be as “lucky” as Drier, whose insurer agreed to pay the full surprise bill for out-of-network care.
There are four main takeaways from Rosenthal’s latest effort:
- Despite their best efforts, even motivated patients really can’t easily shop for healthcare and have full information about the costs, as some of the current conventional thinking expects. Rosenthal shows that Drier researched his insurance coverage, learned what procedures would cost and what the carrier would pay, and negotiated for lower rates. Still, he had no clue an out-of-network assistant surgeon would be helping out and billing into six figures for his services. “I thought I understood the risks. But this was just so wrong—I had no choice and no negotiating power,” said Drier. Neither do patients in many other medical situations.
- Regulatory safeguards are minimal in many states, and there is strong lobbying by providers to keep that that way. “This has gotten really bad, and it’s wrong,” James Donelon, the Republican insurance commissioner of Louisiana, told Rosenthal. “But when you try to address it as a policy maker, you run into a hornet’s nest of financial interests.” In New York, the legislature did manage to pass a law earlier this year that will offer some protection. Though it’s far from perfect, as I’ve pointed out, patients like Drier will not be responsible for unforeseen out-of-network charges beyond what they would have paid to providers in the network. The measure also calls for better up-front disclosure. Time will tell if the law helps patients, or hospitals find ways to skirt its protections.
- Extra and unnecessary procedures continue, even as health policy wonks rail against this problem. Rosenthal added significant context to her report by discussing how neurosurgeons compete with orthopedists to do spinal surgeries, some of which may be unnecessary. The rate of spinal surgery in the US is twice what it is in Europe and Canada, and five times that in Great Britain. Although studies are limited, Rosenthal reports the available data suggests that after two years patients who have surgery for disk problems do no better than those treated with painkillers and physical therapy. (The pain does resolve far more rapidly with surgery.)
- Providers have devised ways around efforts to clamp down on high costs. As Medicare and commercial insurers have reduced payments to neurosurgeons, whose base salary dropped from $630,000 in 2010 to $590,000 this year, the surgeons have turned to consultants who offer innovative strategies to boost their income—including the way they code their bills, aggressive collection practices, and classifying more operations as emergencies. Hospitals have turned to new ways to increase reimbursements, too. “The idea of having an assistant surgeon in the O.R. has become an opportunity to make up for surgical fees that have been slashed,” said Dr. Abeel Mangi, a Yale professor of cardiac surgery.
Rosenthal also illustrated how America’s split-payment system is connected to the cost shift to consumers. Most bills are paid by either private insurers or public payers like Medicare and Medicaid. When Medicare lowers reimbursement, it’s not uncommon for providers to make up the difference by charging more to patients and insurance carriers. If Drier’s surgery had been done for a Medicare patient, the assistant surgeon could have billed only 16 percent of the primary surgeon’s fee. Under current Medicare rates, that would have amounted to about $800—less than 1 percent of the actual bill from Drier’s assistant surgeon, which he reluctantly agreed to pay, with his insurer’s money, after attempts to negotiate a lower price failed.
In our interview last winter, Rosenthal explained one of her goals for the series: “There needs to be a change in the incentives, whether it’s a move to a more marketplace intervention—a real market—or a single-payer, national health system. I would like people to know what the options are, and once they understand the origin of our high-priced system encourage a more open discussion of what kind of system they want to have.”
Her latest piece helps spark that discussion.
Related content:
America’s health care prices are absurd. So, now what?
Wonkblog on the ACA cost-control feature that might make you change your doctor
What coverage of New York’s ‘surprise billing’ fix left out
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