Tuesday, July 31, 2012
On July 28, my home-town newspaper, the Spokane, Washington Spokesman-Review, reported a story that points out many of the perverse incentives in our current method of reimbursing health-care providers. James Munroe, 22 years old and unemployed, sliced his fingers in an accident. He is uninsured. His neighbor, Elizabetth Cobbs, a registered nurse, recognized that the cuts needed medical attention, but were not a life-threatening emergency. Being a good neighbor, a decent human being, and understanding the economics of health care which dictate that an emergency room is the most expensive place to get care, Cobbs took him to U.S. Healthworks' urgent care center, and guaranteed payment of what she thought would be around a $200 bill. Instead, the bill came to nearly $700, including a $179 "first-time patient fee," and $106 for two finger splints, which can reportedly be purchased for $6 each on-line.
What is wrong with this picture? First of all, Munroe and Cobbs would have been better off seeking care in the most expensive setting available, the hospital emergency room. Unlike U.S. Healthworks, the hospital is legally obligated to at least screen and stabilize Munroe, and is also required under state law to provide charity care and utilize it for people like Munroe. Although the bill would have been more than $700, Munroe and Cobbs would probably have paid very little, if any, of it. Instead, these costs would have been ultimately born by all of us, either through subsidies to the hospital made possible by our tax dollars, or through cost-shifting to those of us with insurance, who ultimately pay higher premiums to subsidize care to the uninsured.
Second, I am reasonably certain that no insured patient would have been billed $700 for these services. Insurers negotiate with providers for discounted prices; uninsured people are powerless to negotiate in this manner. Thus, the people who are least able to bear the costs of care, the uninsured, wind up with the highest bills. As Cobbs reportedly said, "There is a moral imperative here . . . Why are you charging $53 apiece for a $6 item?" The answer, unfortunately, is because they can, and it's all about profit for U.S. Healthworks. U.S. Healthworks is a for-profit company, which has just been acquired by the non-profit Dignity Health (formerly Catholic Healthcare West). Dignity Health will own U.S. Healthworks through a for-profit subsidiary. This will allow the moral imperative to continue to bow to U.S. Healthworks' profit imperative while Dignity can continue to tout its high-minded mission ""Delivering compassionate, high-quality, affordable health services; serving and advocating for our sisters and brothers who are poor and disenfranchised; and partnering with others in the community to improve the quality of life."
Is $53 for two finger plints "affordable?" Does this service and advocacy for the poor include unemployed 22 year-old James Munroe? And if it does, will Dignity communicate that message to its for-profit subsidiary, U.S. Healthworks? And should non-profit health care systems be able to limit their mission statements to apply to only to some parts of their enterprise? I would guess that given the publicity surrounding Munroe's situation, U.S. Healthworks will discount or write-off his bill. But what about all of the others in the same position, without neighbors like Cobbs or connections to the newspaper?
Cross-Posted on Healthy Interests