Medical Cost, Debt, Obamacare, and Charity

Ideas and Issues
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July 21, 2021

New Orleans    

Every once in a while all the pieces fall into place, and the whole puzzle comes together in a perfect picture.  This is happening to hospitals and healthcare right now.

The federal Department of Health and Human Services (DHHS) has taken a look at how well hospitals have responded to the mandatory requirement to post their prices transparently on their websites.  As we have predicted from the early results of our three-state study in Arkansas, Louisiana, and Texas, noncompliance is almost the rule, both in spirit, since they resisted the requirement in court for so many years, and in letter, now since January 1st when they are required to post.  DHHS is not happy.  In fact, they are so unhappy that they are now in the process of proposing increasing fines for hospital shenanigans and avoidance.  The sticker price on the fines would be up to $2 million per year for large hospitals, and they are counting any facility with more than thirty beds as large, and that’s almost all of them.

DHHS has noticed that many just aren’t bothering to post at all.  Let’s just call that impunity.  They have also noticed with the help of the Wall Street Journal, that others are posting, but are writing computer code in the websites that block any searches of their prices.  The whole point was to allow healthcare consumers to be able to comparison shop on procedures and costs, so these hospitals resorted to chicanery.

Given the steady increase of healthcare costs even during the pandemic and its multi-billion dollar infusions into hospitals, it is less of a surprise, but equally tragic that anew study has found that in just five years medical debt has now more than almost doubled from $81 billion in 2016 to $140 billion in 2020.  Medical debt has now jumped past all other contenders to take first place as the largest category of debt in collection.

The next piece that fits in this puzzle is even less surprising.  The debt load is predictably higher in those states that have still refused to expand the coverage of Medicaid under the Affordable Care Act.  This is where politics really slams the pocketbook and in doing do hits lower income and working families up the side of the head and then kicks them in the guts until they land in total poverty.

There’s no respite either.  Our earlier studies add the final piece in the puzzle, because there is no backstop from charity care those nonprofit hospitals are required to provide as a condition of their tax exemption and that many for profit hospitals at least claim to provide.  The figures are in many cases less than 1% of gross revenues and the averages are not much higher.

The full picture is squalid.  Racketeering and profiteering come to mind.  When we think about health care and its relationship to life and death, these should be the last things we think about, yet in the US now, for millions the prices and their peril will continue to be foremost when confronted with personal and family healthcare crises.