26 July 2017

Ahhh ……… The Glories of the Free Market

Hospitals have had problems with staffing their emergency rooms, and have taken to contracting with a company called EmCare.

The result has been exorbitant fees charged by out of network doctors:
Early last year, executives at a small hospital an hour north of Spokane, Wash., started using a company called EmCare to staff and run their emergency room. The hospital had been struggling to find doctors to work in its E.R., and turning to EmCare was something hundreds of other hospitals across the country had done.

That’s when the trouble began.

Before EmCare, about 6 percent of patient visits in the hospital’s emergency room were billed for the most complex, expensive level of care. After EmCare arrived, nearly 28 percent got the highest-level billing code.

On top of that, the hospital, Newport Hospital and Health Services, was getting calls from confused patients who had received surprisingly large bills from the emergency room doctors. Although the hospital had negotiated rates for its fees with many major health insurers, the EmCare physicians were not part of those networks and were sending high bills directly to the patients. For a patient needing care with the highest-level billing code, the hospital’s previous physicians had been charging $467; EmCare’s charged $1,649.

“The billing scenario, that was the real fiasco and caught us off guard,” said Tom Wilbur, the chief executive of Newport Hospital. “Hindsight being 20/20, we never would have done that.” Faced with angry patients, the hospital took back control of its coding and billing.

Newport’s experience with EmCare, now one of the nation’s largest physician-staffing companies for emergency rooms, is part of a pattern. A study released Monday by researchers at Yale found that the rate of out-of-network doctor’s bills for customers of one large insurer jumped when EmCare entered a hospital. The rates of tests ordered and patients admitted from the E.R. into a hospital also rose, though not as much. The use of the highest billing code increased.


In the study, the researchers examined nearly nine million visits made to emergency rooms run by a variety of companies between 2011 and 2015, using data from a single insurance company that does business in every state. In exchange for access, the researchers agreed not to identify the insurer. Insurers and health care providers typically sign contracts forbidding them to reveal the prices they have agreed to, and the national trends in surprise billing detected by the Yale team are consistent with a broader study by government researchers.

The new data suggests that EmCare, part of publicly traded Envision Healthcare, did not sign contracts with the insurance company and was able to charge higher prices.

Fiona Scott Morton, a professor at the Yale School of Management and a co-author of the paper, described the strategy as a “kind of ambushing of patients.” A patient who goes to the emergency room can look for a hospital that takes her insurance, but she almost never gets to choose the doctor who treats her.
This actually highlights a flaw in Obamacare:  Whatever protection you have goes away when you get out of network services.

The larger picture is that for-profit healthcare is inefficient and morally bankrupt.


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