Getting rid of ‘fuzzy’ bills

After interviewing Hawaii Medical Service Association President Michael Gold this week and then reading about the vastly different charges hospitals have for similar procedures, we are more pessimistic than ever about reining in health care costs.

HMSA chief Gold told us that the Affordable Care Act will increase health care prices. The various stories about the wild swings in charges from hospital to hospital left us with the impression that nobody knows what is going on in the world of health care pricing.

Then, to top it off, a hospital administrator was quoted in the Honolulu Star-Advertiser as saying, “Hospital billing is a complex issue – one that is not easily navigated by the consumer.” In other words, we the public are not smart enough to understand why they charge what they charge.

Frankly, we’re not sure why estimates are not required for major procedures. Your auto mechanic has to provide one for that $400 tuneup of your car, but the hospital doesn’t have to provide one for that $75,000 pacemaker. It makes no sense.

The only possible explanation is that the vast majority of that $75,000 is usually paid for by an insurance company or Medicare, and not by the consumer. Also, there are so many deals that no one knows what the base price of a hospital procedure is – the bill may say $20,000 and one insurance company may have a contract that allows $2,000 for it. Another insurance company may pay $2,200 to the same hospital for the same procedure.

The only folks who owe the full $20,000 are the ones without insurance – and some hospitals even make deals with them.

Probably a good place to start real health care reform would be with a “Truth in Billing” requirement. If a hospital is expecting $125 for a set of X-rays, it shouldn’t be allowed to send out a bill that shows a $1,000 charge. The charges should be based on their actual costs, including overhead.

In short, medical bills should be made simple enough for the public to understand.

A “Truth in Billing” law would eliminate health care fraud. Let’s face it, with today’s fuzzy billing practices and the trillions of dollars in medicine, there must be a tremendous amount of fraud going on.

* Editorials reflect the opinion of the publisher.