Monday, October 21, 2013
Saturday's New York Times featured a story about a family that was nearly ruined by medical bills resulting from their infant daughter's emergency heart surgery. Although the hospital was in network, not all of the doctors who treated the infant were, and so the insurer passed on "balance payments" to the family for the difference between what out-of-network medical personnel charged and what insurance covered for such out-of-network medical personnel.
According to the story, the family was never informed that some of the people treating the child were out-of-network. Then they were billed thousands of dollars. Fortunately, the child's grandmother had the resources to fight the insurers every inch of the way and the story has a relatively happy ending. They were able to appeal some of the out-of-network charges, and then their insurance company agreed to kick in a bit more of a contribution and the out-of-network provider wrote off the rest. The family only ended up paying around $10,000.
That result is likely the result of a compromise that relied on the facts of the particular case, but it also seems like the right result under a theory of restitution. The family did not agree to have an out-of-network provider provide medical services for their daughter. When such services were provided, they were provided officiously to the extent that the medical provider sought compensation beyond what the family was willing to pay. They should not be required to pay in excess of that amount when nobody ever asked them if they would accept services out of network.
However, the facts of this case are relatively easy. The answer to the question of whether a family would accept out-of-network medical services necessary to save their infant daughter is almost certainly yes. But what follows from that. One could argue that whether or not there is actual consent to treatment by out-of-network providers in an emergency situation, recovery should be limited to in-network charges. Consent is not meaningful when given under conditions of such emotional duress. Or one could argue that, because a family would always consent if asked, the officious intermeddler argument above is specious. Families that want better coverage will have to pay for better insurance.
According to the Times, it is not clear that the Afffordable Care Act (ACA) addresses this problem. One expert says it doesn't and that the ACA could exacerbate the problem because networks may be smaller on many ACA plans. On the other hand, the Times reports that under the ACA, annual out-of-pocket expenses should not exceed $6,350 for individuals and $12,700 for a family of two or more in 2014.
The distinction between in-network and out-of-network is likely a historical accident in the United States. I would guess that it is unknown in many of the 45 countries whose health care systems are regarded as more efficient than that of the United States. Twenty-three of these countries have higher life expectancies than the U.S. Overall, in a 2000 study, the World Health Organization ranked the United States 38th overall in the quality of its healthcare system, despite the fact that the U.S. in #1 in per capita expenditures on health care.