A California ER charges wildly different prices for the same care on the same day

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A California ER charges wildly different prices for the same care on the same day

The Kaiser Family Foundation recently reported that the annual cost of family health insurance jumped to nearly $24,000 this year, the largest increase in a decade. While insurance executives and owners can cite many reasons, one of the main reasons is the lack of control in the Wild West of health care prices.

A friend of mine encountered a striking example of this last year after her 4-year-old daughter unfortunately suffered the same injury twice on the same day.

The girl’s parents were getting her ready for school one morning when, while pulling her hand up her shirt sleeve, she experienced excruciating pain. They took her to the children’s emergency department down the street from their home in the Bay Area, where she was diagnosed with “nurse’s elbow” or, more technically, a “radial head subluxation.” Usually in young children, whose ligaments are looser than in adults, partial dislocation is straightforward to diagnose and treat. A simple elbow maneuver snaps it back into place in seconds.

Coming home from school that afternoon, my friend’s daughter was playing with her nanny when her elbow gave out again. They went back to the same emergency department and went through the same steps with another doctor.

My friend, who was lucky enough to have good insurance and the means to pay his share, knew the bills weren’t cheap. What he didn’t expect was a stark illustration of the arbitrary nature of medical billing.

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While the fee for the first visit is $3,561, the fee for the second visit is $6,056. Same child, same hospital, same insurance, same diagnosis, same procedure, same day—and yet the price is different not only by a few dollars or even by a few hundred dollars, but almost double.

How can we understand this? How can a patient be charged vastly different prices for the same treatment on the same day?

Emergency room billing consists of hospital fees and professional service fees. Hospital fees include a “facility fee” that is part of each emergency room visit and is coded at one of five levels. Level 1 is the simplest—someone who needs a prescription, for example—while Level 5 is the most complex—for problems like heart attacks and strokes that require significant hospital resources. And of course there are additional hospital fees for X-rays, medicine, etc., which are unnecessary in the case of my friend’s daughter.

Professional service fees for emergency physicians and other providers, such as radiologists,. In this case, there is no charge for professionals other than the doctor in the emergency room.

But the listed charges show that the two visits are billed differently. The first is paid a Level 1 facility fee and a Level 3 professional fee. And the bill imposes additional fees, including hospital and professional fees for the care of the injured joint patient.

The second visit, on the other hand, is charged a Level 2 facility fee and a Level 4 professional fee, both of which are higher than the morning fee. But unlike the first visit, no other charges appeared.

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Why is the same injury coded as more complicated and expensive medicine the second time than the first? Why did the coding and billing company decide to charge for additional services on the first visit but not on the second?

I know two doctors who treated my son’s friend; they work on the same team, use the same billing and coding company, and charge the same price. That is why different doctors do not explain the difference. In my practice, even attending physicians do not have access to information about how billing for our services is determined.

My friend and I repeatedly contacted the hospital’s billing department, but they proved unable to provide any reasonable explanation.

Unfortunately, this is nothing new. About a decade ago, I published a series of studies that showed what arbitrary medical billing can do. Hospitals charge from $10 to $10,169 for a cholesterol test; $1,529 to $182,995 for uncomplicated appendicitis hospitalization; and $3,296 to $37,227 for a normal vaginal delivery.

Only uninsured patients are asked to pay these sticker prices. But despite the “discounts” given to insured patients through their insurance companies, these charges end up creeping into higher premiums and other costs. Medical bills are responsible for about 59% of bankruptcies in the US.

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There are few certainties in life, but one of them is that we will all need health care at some point. And another one, at least for those of us who live in America, is that we have no idea what it costs or why. This would not be tolerated in any other industry.

What can we do about it? This is where we can benefit from a government agency like the Consumer Financial Protection Bureau, which helps regulate banks and other financial entities that commit so-called “injustices against everyday Americans.”” We need someone to regulate the injustices inflicted on Americans every day at the hands of the health care system as well. Recent efforts by the Federal Trade Commission and the Department of Justice to unify the health care police and address other anticompetitive practices in the industry are also helpful.

More government regulation and oversight will not address the more fundamental problem that we continue to try to treat health care as a market good, which it clearly is not. But it helps ensure that treating a minor injury in the afternoon doesn’t cost twice as much as it did in the morning.

Renee Y. Hsia is a professor of emergency medicine and health policy at UC San Francisco, as well as a Soros fellow and a Public Voices fellow at the OpEd Project.