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The Grim Lottery of Surprise Medical Bill Stories

Journalists can occasionally help the victims of the health care industry's predations, but without major reform these abuses will continue.

John Moore/Getty Images

In April 2017, a man named Drew Calver thought he was dying. A heart attack had pinned him to the floor of his bedroom. His neighbor took him to St. David’s Medical Center in Austin, where he was successfully treated. Weeks later, he received a bill from the hospital: That’ll be $108,951.31, please. St. David’s was out of network on his insurance, and Aetna had only paid $55,840 of the total $164,941 bill for his treatment. 

How? As NPR reported in conjunction with Kaiser Health News, although “insurers will pay for needed emergency care at the closest hospital—even if it is out of network...the hospital and the insurer may not agree on a reasonable price.” If the insurer thinks the hospital is charging too much, and the hospital won’t budge, the bill goes to the patient. In this case, NPR discovered that the hospital was definitely charging too much: Calver was billed $19,708 each for two stents placed in his arteries, but the median price paid by hospitals for stents of that type is just $1,153. According to billing experts that NPR spoke to, even the amount that Aetna did pay was vastly inflated—as much as twice what it should have paid. The price of the stents was roughly four times what it should have been, the cost experts at Healthcare Bluebook told NPR. 

This story has a happy ending. After NPR reported on Calver’s case, the hospital agreed to lower his bill—to just $331. But the feel-good resolution only leaves distressing questions. Did the hospital, in the end, eat the more than $100,000 cost purely because of the bad look caused by media coverage? Or is it possible that the charge was absurd in the first place, and they happened to get caught this time? 

This is a well-trodden genre of media story, the only bright spot being that this sort of coverage can occasionally save someone from financial ruin. This week, the Los Angeles Times reported on the case of Ethan Hassanzai, severely disabled by cerebral palsy and other conditions. One day, he began vomiting and having seizures and was rushed to his local ER in Torrance, which quickly determined he needed to be sent, by air ambulance, to the medical center at UCLA. Days after his release, his insurer Anthem declined to cover these transportation costs. Even after months of appeals, Anthem insisted the air ambulance wasn’t “medically necessary,” and that he should have been sent, via ground transportation, to a closer hospital. 

The question of why Hassanzai’s family should have to bear this cost and not the medical practitioners who made these arrangements receives a blank stare from our health care system. As Ethan’s mother told the Times, “The doctors made the decision to transport him by helicopter. Were we supposed to challenge them?” Patients are not doctors, and should not refuse doctors’ orders because they think an insurance company might deny a claim; it is actually vital for the practice of medicine that patients are able to trust that doctors are making the best medical decisions for them. 

But again, a happy ending: After the story ran, complete with statements from an Anthem spokeswoman who told the paper that the air ambulance company “can charge whatever they choose,” Anthem reversed their decision and covered the cost. What changed the calculus? Once again, it was journalists creating a modicum of pain and shame. 

There are dozens if not hundreds of examples of stories like this, where media attention caused a reversal of a hospital or insurer’s decision. A patient profiled in NPR’s “Bill of the Month” series in 2018 needed a second surgery to fix a plate installed in her leg after a skiing accident, which broke after just a few months. Aetna, having determined for themselves that the cost was unreasonably high, only paid for part of that second surgery, leaving the patient on the hook for the $7,410 difference. (This is known as “balance billing.”) After NPR’s coverage, the hospital and Aetna agreed to refund her $6,358. Another NPR story told the story of Sovereign Valentine, who received an insane $540,841.90 bill for dialysis performed at an out-of-network center; this bill was waived after the story came out. 

Not every NPR “Bill of the Month” story, nor every similar story covered by journalists, ends in triumph for the patient. (Many of the more successful outcomes came in stories where the bills were absurdly high.) But while the proliferation of these stories occasionally leads to providers having to swallow thousands of dollars, it has not shamed the U.S. health care system into making sense of itself, or hospitals into agreeing to sensible prices, or insurers into not denying claims that are necessary. An outrage flares up; the hospital or insurer pays the price; and the system continues apace. Getting caught occasionally is the cost of doing business. 

Here is a sentence that is sure to ruin your day: One third of the $5 billion that GoFundMe has raised in its nine years went towards medical expenses. Visiting the website and searching “cancer” or “insulin” is like poking your head into a Victorian madhouse, or a jail in hell: The desperate pleas, hands reaching out for help, none more deserving than the rest, all because of the neglect and torment that the rich choose to foist upon the poor. If you have $50 to drop on GoFundMe, that’s great; but for every campaign you donate to, there are hundreds more you can’t help. There’s no guarantee that the campaigns that raise the most money will go to the neediest people, or that it won’t be a combination of the size of their social media network and sheer luck that will determine whether they can pay their bills or not. 

An individual might get lucky and have their GoFundMe show up in a news story. They might get a call from NPR about their medical bill. For those people and their families, it makes all the difference in the world. Journalists can take pride in such reversals; it would seem that they have a high success rate in balancing the scales for people caught in these traps. But journalists are hopelessly outnumbered. You can assign a whole newsroom to this task and barely make a dent. And so, in the system at large, nothing seems to change. 

Why do the stories like Hassanzai’s or Calver’s keep happening? Largely, because of hospital pricing practices and the adjacent problem of insurance networks. Insurance networks ostensibly exist to lower prices (which explains why America spends twice what some other OECD countries spend per capita on health care). Insurers bargain on rates with providers, who then get access to that insurer’s patients, which is supposed to lower premiums and costs overall. If the provider is in-network, insurance will pay for more or all of the cost. If the provider is out-of-network, the insurance company might pay a bit, depending on how generous your plan is, but the patient is likely to be stuck with the balance. This is supposed to encourage patients to be sensible, shop around for care, and carefully ensure they go to only in-network providers. But this is impractical, if not impossible, for patients in dire need of emergency care. 

Large medical bills like those in the NPR series often occur when a patient doesn’t realize that the doctor who treated them—who might have showed up while they were unconscious, or bleeding, or in agony, when financial matters are naturally far from the front of your mind—was out-of-network; these are called “surprise bills.” Sometimes, people are taken in an ambulance, unconscious, to an out-of-network facility. Frequently, the ambulance itself is out-of-network. If it’s an air ambulance, as in Hassanzai’s case, the cost can be enormous. The reason this is a common occurrence is because the out-of-network prices are purposefully inflated to aid hospitals in their negotiations with insurers. But this isn’t taken into account when it comes time to bill the patient. (Unless the patient manages to get an NPR reporter on the line.)  When the bill arrives, the hospital is telling you with a straight face that it absolutely costs $15,076 for four 14 millimeter screws, and they’ve got all the power of the state to go after you and make you pay up. 

Surprise billing has attracted a lot of federal and state-level attention, in no small part thanks to the work of journalists like those at Kaiser Health News, NPR, and Sarah Kliff, who conducted a large-scale project on emergency room bills at Vox. Pretty much everyone supports ending surprise billing—except for those who currently profit from it, most notably the private equity companies who own “physician management” organizations that have taken over some emergency departments. 

Research led by Zack Cooper at Yale found that when EmCare, one of the largest private equity-backed physician staffing firms, enters a hospital, they “raise out-of-network rates by over 81 percentage points and increase average physician payments by 117%.” Their average out-of-network billing rate was 62 percent, according to Cooper’s study. The research also found that these practices weren’t evenly distributed among hospitals: While half of hospitals billed out-of-network at a rate of less than five percent, 15 percent of hospitals billed out-of-network more than 80 percent of the time. 

This practice is so lucrative for the private equity companies that own these firms that they have poured tens of millions of dollars into a shady and secretive campaign to derail the legislation Congress is considering to forge something more equitable. Last month, The New York Times reported that TeamHealth and Envision Healthcare, two private equity-backed physician staffing companies, were behind a mysterious group called Doctor Patient Unity, which has spent more than $28 million on TV ads. This shadowy organization, along with a constellation of similar but less deep-pocketed groups, seek to defeat legislation that would set benchmarks for out-of-network prices, based on what in-network doctors are paid locally. Doctors’ groups prefer an approach that uses arbitration, where an independent arbitrator chooses the price. These groups successfully lobbied to get a provision added to the House surprise billing legislation that would use an arbitration “backstop” if the benchmark price isn’t to their liking—which it never would be. 

The bigger problem with this legislation, as necessary and well-intentioned as it is, is that it is trying to bring sense and justice to a system that is fundamentally nonsensical and unjust. You can’t really “end” surprise billing without getting rid of insurance networks, or the practice of billing patients for their care at all. You can’t really banish the horrible scenario of medical debt without a single-payer system, because someone does eventually have to pay the hospital, whether it’s an insurance company or the patient. A system like ours—in which hospitals set their prices based on what they can get away with rather than what medical care actually costs; in which insurance will pay up on these inflated costs because they can pass the pain onto consumers via premiums; in which doctors are paid off by private equity ghouls; in which the individual patient is financially liable for their bad luck to get sick if the hospital and insurance can’t agree on a deal, or if they don’t have insurance—is not one that can be easily brought to heel. And fixing the problem of surprise billing only scratches the surface of what needs to be done to ameliorate all of the injustices of the American health care system. 

Surprise bills are just the most explicitly outrageous example of these inequities, because they arise so often through no fault of the patient, and the costs that are incurred are comedically high. For all the ardor that Republicans have poured in to making the health care system more unjust, you’ll never see them contending that the ridiculous charges documented by the likes of NPR are Actually Good. As the providers occasionally caught in the spotlight have learned, greeting the rarely exposed outrage with quiet acquiescence ensures that a more formidable check never gets applied to this unjust arrangement. 

That’s remarkable, given what we know of other political conflicts. When the Obama administration mounted an effort to protect the DREAMers—who like the victims of surprise billing, couldn’t be blamed for their circumstances, having been left out of their parents’ decision to bring them to the United States—no amount of differentiating their innocence from that of other immigrants, such as the constantly railed-against “gang bangers” or those whose traffic violations made them worthy deportees, deterred opposition to their cause. Focusing on the most faultless, idealized individuals did not convince Republicans; Democrats only succeeded in further ostracizing immigrants who didn’t fit the DREAMer mold. 

In the case of surprise billing, legislation feels doomed to quietly die at the hand of massive, coordinated industry opposition and Senate Majority Leader Mitch McConnell’s steadfast commitment to obstruction. Even if it succeeds, it would only stem a tiny part of the bloodletting happening in American healthcare. It is no more just for a person who is completely uninsured to get saddled with tens or hundreds of thousands of dollars in medical debt than someone who got surprise billed after doing their due diligence. The medical bill itself is the problem.

People do not get into medical debt on purpose; people don’t choose to be uninsured for fun, and even if they did, we should pay for their care anyway. We should pay for the care of murderers, Nazis, and people who listen to Coldplay, because health care is a human right, and it is not a choice. An unaffordable medical bill is a travesty whether it’s a surprise or not. Saddling a person with life-ruining debt is a cruel and inhumane system at work, even if they didn’t look both ways before they got hit by that car.