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Jon Lewis
Jon Lewis
Attorney • (888) 295-7409

Why are Medical Bills so High?

3 comments

Did you know that hospitals and physicians rarely ever receive the amount they charge for their services? Health insurance companies do not pay the actual bills invoiced by medical professionals. Why is that?

We had a client who was injured in a truck collision. His injuries were serious enough to warrant several nights in the hospital and a couple of surgeries. What were his medical bills? Approximately $72,000.00. What did the hospital and physicians get paid? $11,714.01, approximately 16% of the amount billed.

If you had a retail store, would you accept 16% of your prices? Why do hospitals and doctors? Are they over-charging, or are they getting paid too little?

What if you don’t have health insurance? What happens then? Well, I can tell you that I handled collections for a hospital about 13 years ago, and if patients came in for emergency treatment and didn’t have insurance, we sued them for the full amount, not 16%. Why do private pay individuals have to pay the full amount? I understand why health insurers receive a discount, but an eighty-four percent (84%) discount? What if Bill Gates doesn’t want to get health insurance? He can pay any amount billed so why doesn’t he receive the same discount as a company like BlueCross?

Is this a form of fraud or misrepresentation? In Alabama, BlueCross BlueShield has such a monopoly on health insurance that they dictate to hospitals and physicians what they can charge for their services. Many doctors speak poorly of BlueCross BlueShield as a result of their influence. Some won’t even accept their rates as a result. Should the health insurance companies be setting the rates for medical treatment? Is that capitalism?

I don’t have the answers to all these questions, but I think they need to be discussed, especially in light of healthcare reform. What are your thoughts?

3 Comments

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  1. Jan Boswell says:
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    Jon,

    I have often said we need insurance reform. If a hospital is only receiving 16% of their bill, you have to wonder how they are paying salaries for nurses, X-ray techs, housekeeping, etc. Insurance companies to a degree already dictate treatments protocols. Treatment protocols should be dictated by the condition of the patient.
    In hospital bills, there is a certain amount on “padding”. This is because the salaries for nurses and other health care workers are not charged as a separate line item.
    Doctors and hospitals should get paid a fair amount for the services rendered. It is scary to think that a lab, test, or procedure may not be performed because of fear of non-payment.
    I have as many questions as you do. We need an open discussion in this country. Reform can not happen overnight. Personally, as a healthcare professional, the proposed healthcare reform concerns me.

  2. Mike Bryant says:
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    There are two major issues you are pointing out here: 1) the actual payment issue by the health insurance companies and 2) The issue of what the uninsured pay. Two reasons why reform is absolutely necessary. But you have one side playing politics, slamming lawyers, and never having shown any interest in really getting a bill together and the other continuing to struggle to get the votes together.
    The real issues need to be discussed and solved.

  3. Jon Lewis says:
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    Thanks for your comments Jan and Mike. Jan, you are right. We do need an open forum. That’s one reason I posted this. To start such a dialogue. There are so many issues surrounding healthcare reform, but something has to be done soon.