In 2013, The New York Times reviewed the hospital bills of 100 patients stricken by an outbreak of food poisoning. The journal found that when patients were hydrated with saline – sterile salt water – they were charged 100 to 1,000 times the manufacturer’s price for the solution.
It’s worth remembering this history when looking at the dispute between two healthcare giants: Anthem, the state’s largest health insurance company, and MaineHealth, the country’s largest healthcare provider. ‘State. Last month, MaineHealth announced that Anthem had harmed Maine Medical Center, the network’s flagship hospital, a rate of $1 million per month, and Maine Med will terminate its network agreement with the insurer. at the end of the year.
In response, the Indianapolis-based Anthem accused MaineHealth of overcharging patients, citing bills that include a $136 charge for a bag of saline solution that costs the hospital about $2.
That’s mind-blowing markup, but as anyone who’s tried to make sense of a hospital bill knows, it’s neither unusual nor limited to MaineHealth. What happens is how a provider’s overhead is allocated in our fee-for-service health care system.
There’s no line on your bill for people making sure the hospital has enough bags of saline solution, that they’re properly stored, or that they’re put into your body by someone who know what they are doing. There is also no line item for the part of your bill that covers unpaid care the hospital is required to provide to people who do not have health insurance and the difference between the actual cost of a service and what the federal government pays through Medicare and Medicaid.
Anthem, of course, knows all of this. But instead of negotiating a price for things like a bag of saline solution or installing a stent in a patient’s heart, the company refuses to pay its bills – and that doesn’t seem like a strategy that is limited to its operation in Maine. According to the reports:
• The Georgia State Insurance Commissioner fined Anthem $5 million in March for failing to pay suppliers in a timely manner.
• VCU Health in Richmond, Va., says Anthem owed them $385 million, or 40% of its claims.
• A federal mediator recently awarded $4.5 million to 11 Indiana hospitals after finding Anthem breached its contract by delaying payment for thousands of emergency care claims.
These cases suggest that something is going on here beyond the insurance company’s concern for the health care consumer in Maine.
Other countries regulate health care costs, but that is not how our system works. About half of the population has private insurance through work. Negotiations between providers and insurance companies are supposed to exert downward pressure on prices. Anthem may complain about the price of a bag of saline after negotiations are over, but refusing to pay claims won’t reduce the costs – it can only shift them onto someone else.
We should have a more rational system – a system where health care keeps us healthy and insurance coverage gives us peace of mind. Instead, high costs drive people away from their doctor, and insurance fails to protect them from ruinous medical bills.
MaineHealth and Anthem should settle their differences — a state as small as Maine can’t have its biggest insurer kicked out of its biggest hospital.
But as this case shows, we cannot rely on market forces to control health care costs.