Do You Have Enough Health Insurance? Maybe Not Given How Hospitals Over-Bill!
Posted by
Dan FrithDecember 18, 2007 6:10 AMAmericans fortunate enough to have health insurance, and there are many who do not, hope they have enough insurance coverage for that dreaded catastrophic injury or illness where the medical bills are staggering! Here is a real life story of one man who thought he had plenty of coverage.
Jim Lawson, 61, was working for an oil company in northern California when he became ill from a staph infection in his arm. Unfortunately for Jim, the infection entered his blood stream and caused multi-organ failure. Jim was hospitalized, most of the time in intensive care, at the California Pacific Medical Center. He quickly exhausted his health insurance policy limit of $1.5 million. When he made a miraculous recovery several months later and returned home, he received a bill from the hospital for $1.2 million.
Jim and his wife did not have enough money or assets to pay this bill...a bill they began to closely review. What did they find? The Lawsons found almost unbelievable over-billing! For example, the hospital charged $791 for stockings designed to improve blood circulation. The same pair can be purchased on the Internet for as little as $12. Many of the readers of this blog have similar horror stories about hospital over-billing.
What is at the root of the problem? In my opinion, it has two explanations. First is the fact that what a hospital bills for services and products bears no relation to what it costs the hospital to provide those services and products. I have spoken with hospital billing officials and they admit this fact. In other words the hospital charges whatever they damn well want!
The second reason for hospital over-billing is that it bills those least able to pay (under-insured or uninsured) the most, and here is why. Insurance companies and HMO's negotiate charges with the hospital. The insurance carrier may negotiate a charge of $2,000 for a particular procedure but the hospital charges the uninsured $8,000 for that same procedure. Again, I have confirmed this fact with one of my local hospitals. And by the way, when the uninsured patient cannot pay...the hospital uses that fact to justify increasing their charges even more in order to "make up for" those unpaid bills. Finally, if the hospital is a non-profit hospital (don't get me started...) it will say that the fact it did not get paid for those services...is an example of its charitable work!
BALONEY!!!