Tuesday, November 25, 2008

Good Morning, Good Morning,

I found this Newsweek item on a link on the MSNBC website.  On the one hand we have the crisis of patients who desperately need medical care that often bankrupts them even if they have insurance and on the other we have hospitals whose continued existence depends upon getting paid and doing everything they can to collect.  However, this little paragraph caught my eye.  I was struck by the emphasis on credit and collection agencies.  I was also struck by something the article said was legal but, to my mind, smacks of fraud.  I have highlighted it in red.  

"With their own solvency at stake, hospitals are doing everything in their power to collect on unpaid bills. That, according to the Boston-based advocacy group the National Consumer Law Center, can mean suing patients and their spouses, failing to explain charity care options, offering credit or loans and using collection agencies and the threat of bad credit to coerce patients into settling up. A number of big banks now offer credit cards exclusively for medical procedures—and a growing number of hospitals have started checking patients' credit scores while they sit in the waiting room."

Here is another snippet that disturbs me:

"The Fair Credit Reporting Act allows medical providers to report medical debts to credit reporting agencies but forbids them from indicating what treatments were involved. But rather than report delinquent accounts to credit agencies outright, hospitals often send them—or, ever more frequently, sell them—to outside collection agencies, which are more than happy to do the dirty work for them. That means threatening phone calls, lawsuits—and, in some states, agencies even going after spouses or grown children. (According to a 2003 Federal Reserve study, 52 percent of collection records that appear on credit reports are related to medical debt."

Why should I be disturbed by this?  Well, for one thing, in a time when medical costs have skyrocketed, where is the check on costs?  Hospitals can charge anything they want and then sell the debt, for a fraction of its book value, to someone else.  And if they are selling it for less than their true costs, I would be very surprised.  So they get paid and the collection agency, if it collects anything at all, also gets paid.  The only one who gets shafted is the patient.  This also ties into an interesting segment 60 Minutes, I think it was, aired about a year ago.  The report detailed how insurance companies were charged half or less than patients without insurance.  Actually, that would be illegal.  What they did was give the insurance companies 'rebates.'  

And this use of credit reports should also be illegal:

"But while the credit checks are legal, they're not always welcome. Many advocates worry they could impact the quality of care—or worse, they say they've heard cases where providers have coerced patients to use available lines of credit they can see from the reports."

It may sound like I am down on hospitals but I recognize that they are in desperate straights also.  And the reason is no more of their making, totally, than it is the fault of patients, entirely.  The following sums up the situation quite well:

"Hospital administrators say they've been forced to undertake such steps in part because of the growing cost of caring for so many uninsured Americans—now numbering almost 46 million, according to Census Bureau figures released in August. But it's also the fact that those who do have employer-backed health care—more than half of all Americans—are paying more and getting less. Annual health-insurance premiums for families now average $12,680, according to the Kaiser Family Foundation—more than double the amount in 1999. Of that, families contribute about a quarter out of pocket, not including copays and deductibles."

Many of these facts came out in the election.  Although I am not an Illinois resident, I get the news from Illinois because I live just across the border from Chicago in Indiana.  I cheered this year when one of the candidates, a Republican, lost big.  His opponent ran a very effective ad which showed him saying that everyone had health care.  All people had to do was go to the emergency room and they could get medical care.  Some years ago, another Republican candidate, for Governor, lost in part because she said that anyone who made more than $40,000 per year could afford to pay for their own health insurance.  Really?  How many of you can afford to pay more than 10% of your income (25% of $12,680) and then pay the copays and deductibles as well.  And what if your employer isn't paying any part of the insurance tab?  How about paying one-fourth of your income?      


Kay Dennison said...

And what if you have no insurance and suffer a chronic condition. Been there; done that -- shredded the T-shirt un frustration.

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