Crowd-sourcing Medical Bills

What if everyday purchases were priced and consumed like healthcare services?

These days you’d have to try hard not to know the price of a product or service before you buy it. So imagine booking an airline ticket with zero knowledge of the cost, only to return home to a bunch of outstanding bills for the trip. One statement may cover the seat rental and fuel used. Another bill may itemize each time the flight attendant handed out drinks. A few weeks later a bill for the pilot’s flying time may roll in. Can you imagine the resulting confusion, stress and angst?

I know it sounds absurd but this is the nightmare patients face every time they use the healthcare system. And it isn’t uncommon for these confusing medical bills to spiral out of control. Last year, the Commonwealth Fund (a non-profit healthcare research group) reported that 20% of US adults had medical debt or faced problems paying medical bills and only 58% of Americans felt confident they would be able to afford the care they needed.

So what options do consumers have when faced with the reality of paying for their healthcare?

Option #1: Prepare ahead of time. Ideally everyone would find the right insurance policy and shop for services before care is needed. The good news is price-shopping tools are coming to healthcare. Companies such as Healthcare Blue BookOut-of-Pocket, and Fair Health allow patients to research prices ahead of time. Taking price transparency a step further, straight into the hands of doctors, Cost of Care will make it possible for physicians to consider the cost of medical care as they treat patients.

Inevitably, there are going to be situations where cost cannot be considered beforehand. What options remain for patients facing the resulting bills, explanation of benefits (EOBs) and insurance policy questions? And it’s not just those without medical insurance that face these problems. In 2009, researchers at Harvard University reported medical debt was involved in roughly 2/3 of bankruptcies, even though the majority of those individuals had health insurance!

Option #2: Deal with the aftermath. Most consumers are left to sort through the resulting pile of medical bills to understand how much is owed and if the statements are correct. Healthcare experts are regularly quoted estimating 30% to 80% all medical bills contain mistakes. But just because mistakes happen, it doesn’t mean they are easy to identify and fix.

This is the reason we launched CoPatient. We set out to create a community-based resource where patients can find answers to questions about their medical bills … where caregivers can understand if these bills contain errors … where everyone learns about options to reduce the burden of their medical debt. Rather than consumers facing their medical debt in isolation, imagine a web-based community that demystifies medical bills while pointing out potential errors or ways to negotiate down the debt.

The next time you receive a medical bill in the mail, consider taking action to make healthcare more affordable for yourself and the broader community.

Step 1: Remain Calm. Take a deep breath and don’t let the deluge of paperwork overwhelm you.

Step 2: Get Organized. Sign up for your insurance company’s website to access documentation about your benefits and keep track of EOBs. Reach out to the hospital and doctors’ offices to request copies of each itemized bill.

Step 3: Join the Community. Work with an advocate to recognize errors on your medical bills and identify ways to negotiate a lower price.

Aggregating the experience of those who are dealing with medical bills and sharing that information widely will make everyone facing medical debt better off. It will be services like CoPatient that will help patients understand and manage their medical debt, putting them on a path to physical and financial recovery!

• Schoen, et al. How Health Insurance Design Affects Access to Care and Costs, by Income, in Eleven Countries. Health Affairs Web First, Nov. 18, 2010.
• Himmelstein, et al. Medical Bankruptcy in the United States, 2007: Results of a National Study. The American Journal of Medicine. Vol 122, No 8. 2009.
• Silver-Greenburg, Jessica. How to Fight a Bogus Bill. Wall Street Journal. February 19, 2011.

Katie Vahle, is co-founder of CoPatient, LLC.

Costs of Care (Twitter: @CostsOfCare), where this post was originally published, is a Boston-based nonprofit organization that collects anecdotes from doctors and patients. We feel these stories are poignant because they put a face on some of the known shortcomings of our system, and also because they unveil how commonplace and pervasive these types of stories happen.

7 replies »

  1. Lets not forget the flip side of the coin when discussing this problem. Transparency is an issue not just for patients, but for the people actually providing patient care whether the individual healthcare provider or the entire hospital. We have little ability to adjust our prices and services to meet demand or patient care preferences, Ie, CMS just refused yet again to reimburse for telephone based visits and patient education, MediCal just cut all outpatient services by 10% across the board. So much for the resurgence of support for primary care and preventative medicine despite the horrific access to primary care in this country for even the insured.

    We are faced with third party payers that reimburse a different amount for almost every patient we serve in a given day, different reimbursements depending on the ICD-9 code used to describe what is otherwise the same diagnosis or procedure, or even within Medicare Advantage plans drugs or procedures that are covered at different rates or not at all plan to plan (an especially problematic area for patients). I would love to provide clear pricing information for my patients and be incentivized to provide more efficient care, however the prices I set for my services have almost no relationship to what I actually receive from the government or health insurance company months later. (Yes, MONTHS). Every sad story of a sick patient trying to fight their insurance company when it refuses to cover a service is also a story of clinics and hospitals trying to stay afloat when this refusal to pay happens after the service is already rendered; often forced to pass all of these costs on to direct pay patients. Certainly hospitals should be punished when care is flagrantly innappropriate, but withheld payments go far beyond reason.

    Organized medicine is also to blame with the AMA RUC making reimbursement recommendations with more concern for how much tape is used in a procedure or training years required in our archaic medical education system, rather than patient demand or comparative analysis of the value of the service or procedure. These recommendations, made behind closed doors, are swallowed almost wholesale by CMS, and then copied by private insurers. A group of physicians just filed suit against CMS arguing this opaqueness in price setting is against federal law.

    I think patients will find many in the healthcare system very excited about partnering in these efforts for transparency.

  2. Great dialogue! I agree that many insurance companies offer great tools on their websites – to help their beneficiaries find doctors, estimate out-of-pocket costs, and understand how their claims have been adjudicated. However, not all insurance companies are consumer friendly and totally transparent.

    It would be great if all consumers, with or without insurance, had the good sense to understand their financial liability up-front and negotiate discounts before they consume. However, having worked on the provider side, I know how infrequently this happens in reality.

    Clearly a lot of frustration and dissatisfaction emerges on all sides of the equation as more cost sharing falls squarely on the shoulders of consumers. I am advocating not only for improved price transparency and awareness up-front but also a recognition that millions of Americans are facing medical debt with few resources to turn to for assistance!

  3. Good post, however the situation for covered individuals is not unknown as the author suggests. True, that the actual charged amount is probably unknown, but if anyone can decipher their insurance policy, they should have a general sens of their responsibility of an office visit or imaging test or hospital stay.

    The variability in true cost related to payer contracting, deductibles, co-pays, health-care savings accounts make real transparency nearly impossible, therefore the concept that Jonathan H states is a feasible solution.

    Payers can and should disclose the actual responsibility of the individual as the service payment ultimately passes through them.

    For the self-pay, well, good-luck. Discounted charges, cash-pay rebates etc. should be negotiated up front if he system is willing. I firmly support open pricing, full transparency and true cost estimation across the entire spectrum.

  4. Regarding step 2: some insurance company websites also have cost estimator tools that use your actual benefits (including remaining deductible) and the actual claims experience of the insurer by treatment or diagnosis to show an average expected cost and range of costs (a standard deviation or so in either direction). The best tools have results specific to individual providers.

    If your costs are above the median and you can see no clear reason why, that’s a good time to start looking for errors or funny business.

  5. Wellcardhealth provides a free medical discount card that may address some of the ideas in this article. Call 800-479-200 to learn more about a product that is changing healthcare.

  6. Far too often, the interests of patients are an afterthought–or ignored altogether. Transparency in copays, fee schedules, out-of-pocket costs, and bill negotiation should be considered a core pillar in a patient’s bill of rights. Here’s to copatient.com helping make all of this much easier for patients!