Cash-Paying Patients are Such a Bother
When is the last time you paid cash for something and the seller made you fill out a signed, witnessed, and dated form explaining that you were expected to pay in full at the time of purchase immediately after you had signed a credit card slip authorizing payment for the full price of the service that was about to be rendered?
Never? You obviously haven’t tried to pay cash for health care lately.
Called things like “Self-pay financial policy and waivers” or “uninsured patient information documents,” the forms treat self-pay patients like chumps who must be reminded of their responsibilities. Even if you have just written a check or run your credit card for the full quoted price of a discrete routine service, you will still be required to sign and date a witnessed document saying that you know you are responsible for paying for services.
At HCA facilities, the Patient Information Document helpfully explains that
- the “balance due on the account is expected to be paid in full at the time of service,”
- “if you are unable to pay the discounted account balance in full, we will work with you to establish monthly payment arrangements,”
- if “you cannot establish monthly payment arrangements, we will assist you with applying for Medicaid assistance,”
- “if you quality for a charity discount based upon Federal Poverty Guidelines, your account will be considered paid in full.”
How HCA determines whether someone’s income is below Federal Poverty Guidelines must remain, for the moment, one of life’s little mysteries. Do people who have just lost their jobs and technically have zero income qualify for free hospitalization?
The “Self-Pay Financial Policy and Waiver” form for a group of physical therapy clinics explains that its cash pay clinic fees will be reduced “from our regular commercial fee schedule to $80.” Although the clinics say they are always willing to take your money, paying patients must stipulate that they understand that “payments received after the date of service will be accepted but no reduction of fees will be made” and that “no forms will be produced now or in the future for you or us to submit for insurance billing.”
In short: Pay cash, eliminate collections overhead, and get reduced prices.
Real health care reform will have arrived when cash is the norm for routine services, and those who pay cash are treated as valued customers rather than as potential deadbeats.
Linda, the whole system is set up for third-party payment. People who pay with their own money are a nuisance.
All this will change after the revolution.
Try a Minute Clinic. The experience is as different as night and day.
I like Bruce’s comment. We’ll set this straight after the revolution.
I’ve always hated the threatening tone combined with legal double-speak that I’m required to read and sign with a new doctor. Who understands this stuff? It’s a first visit only form. What if my situation changes? Even though I have insurance, it seems they’re after a pint of blood and my first born son if they don’t get paid in full within their set time frame.
Lizzy, it’s just like the department of motor vehicles. Except the DMV doesn’t ask for your blood or your first born son.
On average, 97% of hospital bills are paid for by third party payers. Hospitals have virtually no experience managing cash-paying customers. As a result, they are not as good as other areas of the economy collecting from their customers. Of course, patients also have little experience with cash when seeking medical care so it’s often a recipe for disaster.
Recently I spoke to a young man at a Christmas party who had gone to the Emergency Room. He said the hospital did not even try to explain the costs for the services ordered or why he needed them. The charges were inflated “list-prices” for a medical condition that the ER staff was unable to diagnose that went away on its own. As a result of his experience, he didn’t feel obligated to pay the bill. He explained he felt bad with an outstanding debt – but he felt the bill was unfair and a vendor should not expect to be paid when it provides no opportunity to the patient to discuss and decline a service.
Auto body repair shops appear to operate pretty efficiently. I wonder what the percentage of cash-paying customers is to insured repairs?
Mr. Barnett brings up an interesting point. If your auto insurer tries to force you to go to a shop of its choosing, it’s called “steering” and is discouraged by state laws. In health care, we call it a “network” and the culture assumes that it is a benefit, instead of a restriction of trade! (Nor have I been hearing about government-focused “Accountable Care Organizations” for our cars!)
Now, the one advantage auto insurers have that health insurers don’t, is that the auto insurer’s liability is limited to replacement value of the car. Because the price of a car is determined in an ordinary market transaction, it’s “easier” for a third-party payer to “supervise” what repairs are worth.
Because we didn’t acquire our mortal frames like we did our cars, I think we have an emotional resistance to health insurance that is actually insurance. That’s why we tolerate the idiotic way the government and the health sector have designed how we pay for medical and hospital services.
However, the paperwork that Linda Gorman describes is not only driven by a lack of familiarity and comfort with self-paying patients. Hospitals’ contracts with government and private payers limit their ability to charge discounted cash prices in the normal way.
Not that I’m excusing hospitals’ behavior. They are serial opponents of patient-centered health care.