Healthcare Billing: The Final Solution

The man next to me on the boarding platform at Penn Station was short in stature. He wore black leathers, and black combat boots. His wallet was affixed to his belt with a chain thick enough to have been scavenged from the Titanic. The man’s long, blond curly hair was shiny enough to land him on the cover of Cosmo. The lizard part of my brain was tempted to ask him whether he belonged to Hell’s Angels or Charlie’s Angels, but I was too tired to run if he attacked me with either a knife or a curling iron.

We wound up sitting together on the train, and when he learned that I consult on patient experience he said, “If you really want to improve patient experience, fix the billing.”

So I did.  Here is what I came up with; two simple rules to make the billing experience more palatable.

  • Rule 1: If the hospital cannot explain its own bill, then you do not have to pay whatever they cannot explain.
  • Rule 2: The Affordable Care Act. Ask them how they determined whether the amount they charged you was affordable to you.

Patients and health systems view the billing differently.  Health systems provide multiple bills because multiple parties are involved—one for the surgeon and one for the pain, and one for the little girl who lives down the lane. When you go to Burger King you get one bill.  Burger King could give you separate bills; one from the baker, another from the farmer that sold you the slice of tomato and the piece of iceberg lettuce. But if Burger King did that, you would eat at Wendy’s.

Patients want one bill, a bill they understand, and an amount that somehow ties back to the service they signed up to purchase.  And because the bills patients receive do not correspond to that guideline the patients call and the call. And they dispute the bill, the amount, the itemization.  And then they question the value, they delay payment, or refuse to pay the full amount, or simply refuse to pay. And the next time they need to be confused by their healthcare bill, they decide to get confused by some other health system’s bill

And the health system now has a very dissatisfied patient. A patient who makes it his mission to voice his dissatisfaction to anyone who will listen. After many calls to the patient to attempt to collect payment, a process that further alienates the patient, the health system sells the patient’s bill to a collection agency.  Then the health system pays a consulting firm millions of dollars to fix their revenue cycle. And the consulting firm comes in. It creates new business processes and new business rules. And it sells your health system on the importance of six-sigma and seven-sigma.

The part health system do not seem to understand is the part that is overlooked.  Every health system that has ever looked at this problem thinks the problem is a collections problem.  And so when they meet in the big conference room with the consultants in the hospital’s administration wing, everyone’s focus is on improving collections.  If however the problem is not that people refuse to pay, but that they refuse to pay something they do not understand, how much of the problem would go away if the health system fixed billing instead of collection.  Collections may be working just fine,, but nobody will know until the bill is fixed.

Eighteen months go by.  The bill remains unpaid. The health system spent millions of dollars on consultants.  When all is said and done the health system still issues multiple bills that nobody but the consultants understand.  Perhaps the next patient who inquires about their bills should be told to call the consultants for an explanation.

I told the person next to me on the train to call his health system and to tell them the following; I will pay all of these charges as soon as someone can tell me what each charge cost the health system.  I then told him to use the money he was going to use to pay his bill to go on vacation because nobody in the health system knows the actual cost of anything other than a Tylenol.

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