On Insurance
Like most stories worth telling, this one begins with something small.
In this case, a very small finger.
In December 2019, my wife and I packed up our 1.5 year-old and his various accoutrements to spend Winter Break (as a teacher, I still get those) with my parents down in South Carolina. Our annual visit was progressing as it often did, with lots of movies watched, delicious food eaten, copious showing off of the grandchild at synagogue, etc etc. For all intents and purposes, it was a fairly uneventful span of family time. That is, until one evening close to the end of our trip. My son was trying a beloved family recipe I hadn’t had since my youth when he his got finger lodged in a joint of the folding chair on which we had attached his travel booster. In dislodging it, the chair took a piece of his finger as its own. Cue tears and a LOT of blood for one small finger.
When a virtually identical event happened to our now three year-old last week, we sat with him, put pressure on the finger until it stopped bleeding, coated it with some Neosporin and a band aide, and gave copious neck kisses until the crying subsided. However, as relatively new parents, our instinct when it came to our munchkin was always one of alarm and overreaction. Did we slice off his whole fingertip? Was the bone broken? Did we just permanently disfigure our child? We wrapped his hand in a damp paper towel and made a beeline for the Emergency Room.
While our overriding concern at the time was for our child, we did have the forethought necessary to call our insurance company to determine what an out-of-network ER visit would cost. They told us that according to our plan, an ER visit is an ER visit no matter where it happens and we could expect to pay our usual ER co-pay of $100 dollars.
Moderately insane in retrospect, given the situation, but only moderately.
We arrived at the hospital and, after a short wait, found ourselves in a room in the pediatric wing. The crying (both his and ours) had subsided by now and by the time the nurse removed the paper towel, the finger had stopped bleeding. Twenty minutes, some disinfectant and a band aide, and some light back and forth with the ER doctor about the upcoming baseball season later and we were on our way back home.
A few weeks later we got a bill from the hospital for $1000.
I’ll repeat that.
A dab of hospital-grade Neosporin + a band aide + baseball jibber jabber = ONE THOUSAND DOLLARS.
The fact that we were billed wasn’t completely surprising. The attendant who checked us in was pretty confounded by our out-of-network insurance card and it took a little bit of explaining to assure her that we were covered. I suspected at the time that we might get a bill, but since we had been assured by our insurance company that they would cover the visit, I wasn’t that worried. And in the end (spoiler alert), my lack of worry proved to be the right choice. However the journey between Point A (Problem) and Point B (Resolution) was much more complicated than it should have been.
We first called our insurance company to ask what the hell was going on. They had no record of the visit, which means that the hospital had not filed a claim with them. They verified (again) that once the visit was filed with them, they would cover it and all we would owe is the co-pay we had tacitly agreed to when we went to the ER in the first place. We called the hospital, told them what had happened, they took our information, apologized, and said they would take care of it.
A few weeks later, the collection letters started to arrive. They had reported us to a collections agency to get the $1000 they felt they were owed.
We called the collections agency, explained what had happened, and were told they would “add a note to our file.” (After all, the only people who could call them off were the people who sent them after us in the first place.) We then called our insurance company who, now irate on our behalf, took the information we had for the hospital and the healthcare network of which it was a part, and said they would make the next call.
The letters did not stop, nor did the phone calls we received at least once a week. Then the letters to negotiate: they would accept $800 instead of the initial $1000 and we could make payments over time. Then came the threats: to report us to the various credit agencies or to get in touch with our employers to dock our pay. Keep in mind, COVID had hit at this point, but even a global pandemic wouldn't stop this pursuit for their pound of flesh. Only when we threatened legal action did the calls and letters subside. Around a full year after the visit, with a pandemic in between, did someone, somewhere, figure out that the hospital had REPEATEDLY filed the claim as in-network instead of out-of-network. A tiny clerical error had lead to a year of harassment. The issue was fixed, the claim went through, our insurance covered it as they said they would, and all parties moved on.
All parties, that is, except for one: me.
Given my unhealthy tendency towards perseveration, the whole situation had me swimming in implications; what an instance like this said about us as a society, and the various ways things could have progressed very differently.
To whit, I’m left wondering the following:
First, how in any realm of the imagination the services we received could add up to $1000. Given the average price of a 0.5oz tube of Neosporin ($5), a box of band aides ($5–6 or 11–17 cents each), and the size of the wound, I approximate the cost of materials to be somewhere in the realm 25–35 cents. Which would mean that 10 or so minutes of that doctor talking about how “it might be the Phillies year that year” (it wasn’t because COVID and also Bryce Harper is overrated) was worth somewhere in the neighborhood of $999.65. I know doctors and their time are valuable, but come on! It is certifiably insane that any human in their right mind could spit out a number like that and sleep well at night.
Of course, that is likely because a human didn’t spit out that number. It reeked of automation. That doctor probably forgot about our visit the second he filed the paperwork for it; it was not him we were fighting. However, given the point our society has currently reached vis a vis artificial intelligence, the computer program that spat out that number had to have been programmed by someone. Which means someone, somewhere, determined that the services we received were worth the amount we were charged for them.
Which, on virtually every level, seems insane. It made me want to look a little deeper into the accepted relative value of healthcare in the United States. What I uncovered would take far too much time to cover and, frankly, I’m unqualified to do it. But to summarize: we often forget that healthcare is, first and foremost, a business in this country (and many others). And like any other business, healthcare providers are beholden to their shareholders AKA the people who pay their salaries, and buy their equipment, and pay into their retirement funds. Given the essential role healthcare plays in keeping people alive, it feels wrong to view it in such terms. But it is in such terms that it must be viewed in countries where the healthcare system and the government are disconnected.
So, if healthcare is a business, then healing people is the service they provide and they are free to charge whatever they want for that service. That is how businesses work. However, unlike say a restaurant, we are not often provided a menu of services from which to choose and even if we were, we wouldn’t ask for it depending on how dire our situation might be at the time. We place so much trust in healthcare providers to save our lives that we seldom ask how much that service will cost us. Most of us likely don’t even think of healthcare in those terms because, well, our brains don’t think we should have to. When someone’s entire outward appearance is one of benevolence and altruism, we tend to forget that there might be a self-serving element waiting in the wings. And because of this cognitive dissonance, we don’t consider the inhumane parts of the healthcare industry until its too late and we get the exorbitant bill from the nice people who made us feel better. And because the general expectation when entering a hospital is to feel better with no regard to the cost, the amount charged for that is not beholden to typical market-based supply and demand. When you walk into a store and say you want service no matter the cost, you aren’t getting a deal on that service. Exactly the opposite.
According to a 2019 survey, the average physician brings in around $2.4 million in revenue to their hospitals. Which means after covering their overhead — millions of dollars in machinery and medicine and utilities and physician salaries (anywhere from $140–320 thousand per year) — hospitals are pocketing $2.4 million dollars per physician in pure profit. That makes healthcare one of the most profitable industries in the world.
It’s a sobering thought, that the folks committed to healing are embedded within a system that is designed to make as much money off of us as possible. And make no mistake, this is not the fault of the doctors, but rather the system in which they must work if they are to make a living.
Which brings me to my second wondering: insurance.
The health insurance industry is, of course, part of the machine I detailed above. We pay each month, for many right out of their paycheck before they even see it, to a company which promises to take care of us if we get sick not by providing the services we need, but by negotiating with those who do. In other words, we do not pay insurance companies to make us better, we pay insurance companies to make sure that getting better won’t destroy our bank accounts. In some cases, the parent companies of the major insurance companies are the same umbrella under which the healthcare providers themselves sit. Which means those companies are making those monumental profits from the services provided AND the revenue paid to protect us from…that same company. If this is starting to sound like something more akin to a Scorsese movie, well…you aren’t wrong. Unsurprisingly, the health insurance industry has done VERY well for itself lately as well.
So let’s recap: hospitals can charge whatever they want because they know we’ll pay it because our health or the health of our loved ones matters to us, insurance can charge us whatever they want because they know we don’t want to go bankrupt for taking care of ourselves or our loved ones, one company can make a lot of money from both revenue streams and, as indicated by our story, will show no mercy or understanding even when their not getting paid was the result of an error THEY made.
All of these thoughts are sobering to me, which leads me to my final wondering: if all of that can happen to my family, who is fortunate enough to have fairly good insurance, what is being experienced by the folks who don’t?
Following the passing of The Affordable Care Act, the number of uninsured, non-elderly Americans declined by 20 million, dropping to an historic low in 2016. However, beginning in 2017, the number of uninsured nonelderly Americans increased for three straight years, growing by 2.2 million from 26.7 million in 2016 to 28.9 million in 2019, and the uninsured rate increased from 10.0% in 2016 to 10.9% in 2019. Given the onset of the Coronavirus Pandemic in 2020, the number of uninsured figures to have only grown in the last two years.
I can’t stop thinking about all the other new and terrified parents who just want their kids to be okay who get slapped with a bill like we did and who are actually on the hook for that inhumane amount. Or the other insured folks who lack the reckless indignation to not crumble once those scary collections letters start to arrive. How many times has that company gotten away with making simple clerical errors like that because folks were so scared about their credit score or job standing that they just paid to make the threats go away? (As more than one person told us to do.)
And what does it say about our society that we have accepted all of this as normal? Make no mistake, while I may have spoken about these issues above with the tone of someone just learning about them now, I was aware of them long before I was directly impacted by them. Which is sort of what made me want to write this in the first place: if we don’t talk about things that make us uncomfortable before they directly impact ue, about the things happening every day that just don’t jive with our understanding of the world, how can we ever hope to make things better?
I’m not the first person to write a piece like this one, nor will I be the last. And that’s the point. If you’d like, sound off in the comments about your own trials or tribulations with the healthcare industry. A singular voice affects very little…but a chorus sends a message.
