What Happens When You Let Private Equity Get Involved

Trauma centers at hospitals are increasingly separate entities from hospital emergency rooms, and increasingly owned by private equity firms.  The result is an explosion of 5 and 6 figure charges which serve only the interests of their corrupt investors: (For information about the expansion of PE into ER services, see here.)

The care was ordinary. A hospital in Modesto, California, treated a 30-year-old man for shoulder and back pain after a car accident. He went home in less than three hours.

The bill was extraordinary. Sutter Health Memorial Medical Center charged $44,914 including an $8,928 “trauma alert” fee, billed for summoning the hospital’s top surgical specialists and usually associated with the most severely injured patients.

The case, buried in the records of a 2017 trial, is a rare example of a courtroom challenge to something billing consultants say is increasingly common at U.S. hospitals.

Tens of thousands of times a year, hospitals charge enormously expensive trauma alert fees for injuries so minor the patient is never admitted.

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While false alarms are to be expected, such frequent charges for little if any treatment suggest some hospitals see the alerts as much as a money spigot as a clinical emergency tool, claims consultants say.

“Some hospitals are using it as a revenue generator,” Tami Rockholt, a registered nurse and medical claims consultant who appeared as an expert witness in the Sutter Health car-accident trial, said in an interview. “It’s being taken advantage of” and such cases are “way more numerous” than a few years ago, she said.

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Those fees, which can exceed $50,000 per patient, are billed on top of what hospitals charge for emergency medical care.

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At some hospitals, few patients whose cases generate trauma alerts are treated and released the same day.

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“If someone is not going to bleed out, or their heart is not going to stop, or they’re not going to quit breathing in the next 30 minutes, they probably do not need a trauma team,” Rockholt said in her testimony.

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“There must have been a consultant that ran around the country and said, ‘Hey hospitals, why don’t you start charging this, because you can,’” said Marc Chapman, founder of Chapman Consulting, which challenges large hospital bills for auto insurers and other payers. “In many of those cases, the patients are never admitted.”

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A few years ago, Zuckerberg San Francisco General Hospital charged a $15,666 trauma response fee to the family of a toddler who had fallen off a hotel bed. He was fine. Treatment was a bottle of formula and a nap. The hospital waived the fee after KHN and Vox wrote about it.

The fact that the hospital is named after Mark Zuckerberg is an interesting footnote to this story.  

This is one reason why I favor a publicly owned National Health Service (NHS) over single payer, the parasites in the finance, insurance, and medical industries will continue to look for new and creative ways to screw the public.

H/t naked capitalism.