economics free market medical

Another rant on medical costs

I’m getting another blast of medical bill nuttiness. Where to start…

As you may know, my insurance company has been denying all claims. I’m not going to get into that here, the upshot is that I’m getting the bills. I have had some success with negotiating lower prices at some places, my neurologist’s included. A big part of this negotiation involves me whipping out a credit card and actually paying the bill. Getting paid right away is a big incentive, at least to some people…

I needed a spinal tap, so naturally I was worried about the price. I knew that I could work with the neurologist’s but they made it clear that they lab costs were out of their hands. OK, maybe if I contact the lab and work out something before the test, I can work a good price. Hoo boy. I called my neurologist’s office to find out what lab they are using. I then called the lab. They directed me to another number for billing questions and then they sent me back to the lab. At that time, I was only trying to get a price. It turns out that the person I needed to speak to had already left.

So I went and got my spinal tap the next day, and at the lab I told them that my insurance wasn’t going to cover it. I asked if they had a discount for prepayment. They said they used to, but they stopped doing that on April 1. They did say I could pay for a third and then fill out a form to see if Riverside medical would be willing to forgive the rest. Um, OK. Can’t you do something now, I would prefer to pay now. They would do that only if I paid the entire cost. They would not move an inch.

I got a similar run around with some of the other doctor’s offices I dealt with from Riverside Medical. When I call to the office, they say they do not handle the billing. When I call, they are not willing to lower the price at all even though they were willing to accept my insurance company’s much lower payment. It was common practice for my mother (an orthopedic surgeon) to charge a much lower rate, usually the medicare rate, when the patient didn’t have insurance. So what’s going on?

What my neurologist’s office and my mother’s previous office had in common is that they did their own billing. All of the other people I have dealt with have others do the billing. Why does that matter? It matters because when I deal with people at the other offices, they don’t care if I pay or not. It isn’t their job to collect, their job is to do the paperwork properly. As a matter of fact, they have been conditioned to not get involved in the money aspects of the business, it is uncomfortable and messy. They insulate themselves to the point that they have no idea what things cost.

The problem is that the prices that are charged are set with the idea that the insurance companies will pay a fraction of that. If you do not have insurance, you are stuck with a much larger bill than the insurance companies would get. This isn’t necessarily a problem, reasonable people can quickly come to an agreement based on what the insurance company or the government pays for any given procedure. The key is that the other side has to be interested in getting paid, they have to be willing to make a deal. The companies that do not handle their own billing and the billing companies that do it for them are not interested. They just want to do their job. If you pay, you go into one slot, if you don’t pay, you go into the other…

All of this has had the perverse effect of making it attractive for the medical claim to go into collections. You see, the collection agent is paid based on their ability to get money. They have every incentive to get money, so they have every incentive to wheel and deal on the price. They would be ecstatic to get half of the bill paid. They take their cut, and the rest goes to the medical company. It’s their own stupidity and the incentives set up by their structure that prevent them from getting that money in the first place.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.