The Wall Street Journal reported last week on very aggressive tactics used by a few hospitals to collect on debts. As you can’t see the WSJ articles unless you subscribe (for money!) I didn’t link to it, but med blogger Bard Parker did and he transcribed much of it onto his site A Chance to Cut is a Chance to Cure, and then asked me to comment. So read his opinions and come back.
For those of you who didn’t bother to follow my instructions, the WSJ reported that some hospitals are going after debtors who have ignored court hearings by actually having them carted off to jail. Many of these hospitals are non-profit institutions who show considerably more aggressive tactics in debt recollection than most consumer goods companies. Indeed several of the examples seem to be going after particularly low-income debtors, and essentially forcing them to pay up by whatever means they can–which usually means borrowing from family members who scramble to find bail money while the patient is sitting in a jail cell.
Bard Parker and most of his commentators are sympathetic to the hospitals, in general believing that this is done in a very few cases when the patients could pay but have ignored all other efforts to come to an arrangement. As he asked for my comments, I’ll give some random comments below, for what they’re worth:
a) While it’s true that this is a tiny minority of patients, it is symptomatic of the problems many Americans have paying unexpected medical bills. It’s extremely unlikely that the financial benefits of collecting some of this money are worth the bad publicity these institutions just got.
b) Americans indeed often go into debt irresponsibly, but visiting the ER to deal with a miscarriage isn’t the same as, say, buying a diamond you can’t really afford on credit, even though it might cost more.
c) As is now quite widely known, the uninsured often get charged the highest prices by hospitals, as they do not have the ability to get discounts off the "list price" as do insurance companies. This "reverse" price discrimination isn’t exactly equitable or ethical.
d) Hospitals used to write all this bad debt off, and would charge more to well-insured patients to make up the difference. Starting in the late 1980s aggressive insurance companies lowered their payments and got rid of the hospitals ability to cross-subsidize from "rich" patients to poorer ones. But of course apart from the DSH program for a few inner city hospitals who treat a lot of uninsured patients, no new system of cross subsidization has been created.
e) The best system of cross-subsidization is called insurance. The people shipped off to prison in the article (and another 42 million Americans) didn’t have it usually because they are too poor to buy it (or not forced by law to buy it) and because the market for individual insurance is dysfunctional. I’d rather have our sheriff’s deputies out preventing crimes, rather than acting as debt collectors for hospitals. The way for that to happen is for policy makers to create an insurance system that works for the working poor including forcing them to participate. Then hospitals wouldn’t be bill collectors and patients wouldn’t have to avoid needed care for fear of not being able to pay. Hospitals would be better off in the long run if they put their considerable political clout behind the creation of such a system.
As I recently posted. These aren’t the views of some wacked-out lefty conspiracy theorist, or at least if they are, they seemed to be shared by representatives of Pfizer.