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Health Reform 101

with Lisa Zamosky

WebMD helps readers understand their health insurance and the new health care reform law. The Affordable Care Act is bringing sweeping changes to American health care. Lisa Zamosky is here to help you navigate the health care maze and understand how these changes affect you.

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Tuesday, January 22, 2013

Hospital Bills Gone Wild!

By Lisa Zamosky

doctor with medical bill

The biggest concern everyone has about medical care is cost.

Two recent articles – one in the New York Times, the other by Los Angeles Times columnist, David Lazarus – highlight how crazy the process of medical billing following a hospital stay can be, and the devastating effects it can have, even on people fortunate enough to have health insurance.

The first article published in the New York Times, tells the story of a man who required surgery to remove nonmalignant tumors throughout his digestive system. “They removed his gall bladder, as well as parts of his pancreas, bile ducts, intestines and stomach,” the article’s author writes.

The price for this surgery: $250,000. The man makes $866 per week.

The family has organized the myriad medical bills and is in the process of negotiating with the doctors and the hospital that provided treatment. Their expectation is that they will never repay this debt.

David Lazarus of the Los Angeles Times tells the story of the medical bills he received following a hospital stay that resulted from his cat biting his hand. His hand became quite infected and ultimately required surgery. A six day hospital stay set him back $55,000.

Much of that bill was comprised of a $4,000 per night stay in the hospital and other unbelievable charges, including $16 for a generic form of Tylenol. And, that’s the cost for just one pill!

After all was said and done, more than $14,000 went left unpaid. But as a journalist writing for one of the country’s largest news organizations who happened to quote the hospital system’s president in his story, he was able to get that amount written off.

A Game No One Wants to Play

There’s so much going on behind the scenes that lead to outrageous hospital bills. None of us pay the same rate for the same service. What you pay may depend on whether or not you have insurance and what type of insurance you have.

Hospitals charge crazy prices that bear no resemblance to actual costs as a way of compensating for the treatment they have to provide to people who enter their emergency departments without health insurance. It’s also a way to make up for the deep discounts they give insurance companies.

Perhaps the biggest issue when it comes to crazy costs, however, is that today our system pays for each individual medical service we get, meaning the incentive for any health care provider is to do more.

The health reform law includes a number of provisions that aim to change the way doctors and hospitals are paid. There is a major shift underway to essentially put providers on a budget and pay them based on the quality of care they provide, rather than by the volume of care they provide.

Finding Help with Outsized Bills

In the meantime, if you have very high medical bills, seek some help.

If you get insurance at work, talk with your benefits department about what, if any, assistance might be available to you. Many companies today contract with healthcare advocates who help employees navigate the health care system and their insurance policies.

If you’re on your own, here are few resources to tap:

Share your story: What was your billing experience following a hospital stay? Were you billed fairly? If not, how did you deal with it?

Photo: iStockphoto

Posted by: Lisa Zamosky at 12:32 pm

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