Here’s a couple of sentences ripped from the headlines recently: It is free to be tested for COVID-19 in the US, but the cost of treatment can be shocking. Even if you’re insured, the deductible and co-pay can add up to several thousand dollars. And if you’re uninsured, the financial toll is even uglier. That’s what Boston resident Danni Askini learned when she got a $34,927 bill after receiving treatment in a local emergency room for COVID. That’s from Time magazine.
Episode 260 of the show was about the Shkreli Awards and the worst profiteering in health care. The judges of the Shkreli Awards bucketed the winners into a few categories. One of the categories of “winners” was called Schizophrenic Compartmentalization, and this schizophrenic behavior seemed super applicable to hospitals this past year. This schizophrenic compartmentalization happens when the person who wrote the mission statement and probably doctors and nurses are on a totally different planet than the billing department. So, I wanted to take a look at a couple of mission statements just as a reference point, including the mission statements of the hospitals that won Shkreli Awards in the Schizophrenic Compartmentalization category.
Luckily, there is a Web page where hospital mission statements are all collected in one place, so I did not need to travel far to confirm that they are all very, very similar—something along the lines of treat patients with compassion, be a productive member of the community, ease suffering, and give the highest value to all concerned. That’s very noble and what I would expect a hospital, honestly, to be striving toward.
Here’s the thing, though. This is what the whole hospital is supposed to be doing. I didn’t find one mission statement that said everybody except the finance team is subject to this mission statement. Those guys over there? They have their own.
In this health care podcast, I speak with Doug Aldeen. Doug is an attorney. He is generally hired by self-insured employers. He has dealt with hospital finance teams for two decades, so he is the perfect person to dig into the delta between the hospital’s mission statement and the finance team’s mission statement. This is what we talk about in this podcast. Doug also offers up some solutions at the micro and the macro level.
One vocabulary word before we get started: RBP is otherwise known as reference-based pricing. This means when a health plan, usually a self-insured employer’s health plan, says that they’re going to pay for health care services based on usually the Medicare rate. So, they’ll pay, like, 1.5 times or 2 times what Medicare pays, for example.
Do I want to be a little bit sensitive right about now to some of the hospitals that are struggling under the weight of COVID and the shutdowns that have been transpiring across the country? Yeah, I do. At the same time, there is absolutely no excuse to take advantage of those that you claim to serve. There’s a big delta between charging a fair price and wrenching dollar bills out of the sweaty hands of hard-working Americans just because you can.
You can learn more by emailing Doug at doug@health-attorney.net or following him on LinkedIn.
Doug Aldeen is an Austin, Texas–based health care and Employee Retirement Income Security Act (ERISA) attorney who recently served as ERISA counsel on behalf of the Berkeley Research Group in New York City to the $7.7 billion May 2016 acquisition of Multiplan and its medical bill repricing product Data iSight by the private equity firm Hellman and Friedman. Since 1997, he has represented reference-based pricing organizations, a bundled payment software platform, PPO networks, medium to small self-funded plans, third-party administrators, and provider-sponsored health maintenance organizations in various capacities, including Herdrich v. Pegram, which was argued before the US Supreme Court in 2001. Moreover, he serves as a resource to national news organizations regarding issues on health care and as a consultant with the Governmental Relations Committee at the Self-Insurance Institute of America in Washington, DC, and as an adviser to RIP Medical Debt, which has abolished over $1.2 billion in medical debt. Doug received his JD from the University of Illinois.
03:59 Exploitive hospital billing practices.
04:20 The impact these exploitive billing practices have on patients.
04:45 Why would a hospital exploit the patient with their billing practices?
09:31 “You could adversely affect 3 million people.”
10:53 The “scorched earth” policy.
11:33 EP242 with Marty Makary, MD.
12:28 “I think the long-term plan … is preserving the network.”
13:08 EP186 with David Contorno.
16:03 A third exploitive billing process: hospital-owned insurance plans, or “payviders.”
20:35 MOOP: maximum out of pocket.
21:07 RBP: reference-based pricing.
21:58 Exploitive tactic #4.
26:03 The solution to changing exploitive billing strategies.
26:39 “You have to be willing to travel.”
28:34 EP240 with Olivia Ross.
28:47 “It’s educating your employees and really having an honest conversation about ‘This is what it really costs.’”
30:28 Doug’s advice to hospital execs listening right now.