Hospitals

Two healthcare leaders become patients and are enraged by the billing bureaucracy

There is nothing like a dose of reality to change your perspective. This is why the smartest entrepreneurs talk to customers before launching a new product or service. This is why all hospital CEOs and medical device executives should be a patient at a hospital on a regular basis. The transformation after this firsthand experience […]

There is nothing like a dose of reality to change your perspective. This is why the smartest entrepreneurs talk to customers before launching a new product or service. This is why all hospital CEOs and medical device executives should be a patient at a hospital on a regular basis. The transformation after this firsthand experience with the healthcare system is amazing. Here are two stories of hospital visits by healthcare leaders that illustrated the same thing, as Paul Keckley put it: There’s nothing like being a consumer in the health system to remind one of its strengths while being exposed to its flaws.

John Sung Kim is the founder and founding CEO of Five9 and currently leads DocBase in San Francisco. He admits that previously he has viewed patients and providers as whiny. Then he had a motorcycle accident and spent a night in the hospital. He described the experience this way: amazing doctors and nurses, horrible IT, and billing bordering on mail fraud.

While the hospital charged $49,674.80 for that one night stay, my insurer only paid $34,772.36. The rest was “forgiven” by the hospital. I called both the insurer and the hospital – the insurer told me I was fully covered and the hospital made it nearly impossible to get a detailed bill.

Even though his bill was paid, Kim started to get more calls and bills from the ambulance company, his car insurance company and even a medical device firm. He decided that the ambulance company was trying to milk as much money out of the system as possible. The really crazy collections call was from an orthopedics firm. Kim shared part of it in his post:

Me: “I got a bill for a device that i wasn’t given. Why are you sending me collections notices?”

Representative: Mr. Kim, are you telling me you’re going to destroy your credit for $600? We already gave you a substantial discount from what I can see.”

Me: “How do I get a discount on something I didn’t get?”

Representative: “Mr. Kim, I’m not here to argue with you. I’m staring at a piece of paper right here with your signature on it saying you will pay for this device.”

Me: “Wow that’s cool IT you have. What does my signature look like?”

Representative: “Excuse me?”

Me: “I have a very unique signature, it’s a common shape. You’re staring at it right now, right? Is it a circle, a square, a triangle?”

The representative hung up on me.

Earlier this summer, Paul Keckley had total knee replacement surgery. His bill — almost $60,000 – was not any easier to understand than Kim’s:

At the bottom of my bill, the hospital noted “We have filed a claim with your insurance carrier. Please take a moment to review the insurance information listed above in order to ensure your claim is billed accurately.” It’s nice of them to forward the bill to the insurance company, but I’d like to sign off on what was charged before it’s sent, and I don’t have a clue what some of the 11 items even mean. What’s the “central service” and “PASR”, and why was there a separate billing for the “laser surgery center,” that’s different, I guess, than the “operating room” charge of $38,092.80. But I intend to find out, and notify both my insurer and providers what I learn.

Given his background, it’s not surprising Keckley goes on to analyze the larger problem with this pass-through system: everything is passed on to someone else who will pay — an insurance company, taxpayers or individuals. He points out very correctly that transparency in healthcare costs is not enough to solve this problem:

Unless customizable data about prices and costs, outcomes and options is available in easy-to-use sources widely accessible at no cost to consumers when they make decisions, pass-throughs will persist and costs will soar. Transparency is not an end in itself; it is a key element of a solution that equips consumers to make decisions that impact their health and their pocketbooks.

… it means the relationship between having health insurance, managing costs and optimizing care needs fresh thinking: If insurers are part of healthcare’s pass-through economy without adding value, what’s their role?