What a Johns Hopkins surgeon learned from researching US hospital billing practices


For Marty Makary, MD, problems with U.S. hospital billing practices came sharply into focus about two years ago.

The Johns Hopkins surgeon and professor of health policy and management had heard stories about massive medical bills due to high-deductible health plans and out-of-network care. At the same time, neighbors in his low-income Virginia neighborhood would show him bills they couldn't interpret.

"My neighbors would tell me stories that didn't make sense and were downright embarrassing to me as a medical professional," said Dr. Makary, author of the New York Times' best-seller, Unaccountable.

Those stories spurred Dr. Makary and his research team at Baltimore-based Johns Hopkins to delve deeper into hospital billing practices. They traveled to 22 cities over two years to meet with hospital leaders, insurance executives, patients, revenue cycle staff and others about today's industry problems.

Their findings are detailed in The Price We Pay, released Sept. 10, which discusses, among other things, hospitals that have filed debt-collection lawsuits against patients to garnish their wages. The book also also highlights those innovating and disrupting medical care to help solve root problems the industry faces.

Becker's Hospital Review recently caught up with Dr. Makary to discuss The Price We Pay and what he wants hospital revenue cycle leaders to learn from it.

Editor's note: Responses were lightly edited for length and clarity.

Question: What were your goals in doing this research and writing the book?

Marty Makary: The goal is to restore the public trust in American hospitals. Price-gouging and aggressive billing makes people afraid to seek medical care, and it harms the great standing of American hospitals. Some patients have told me they're scared to go to hospital because they've been sued [over medical debt], and some say they'll only call Uber to go to hospital because they don't trust ambulances to not price-gouge them.

Q: What did you learn from the research?  

MM: I think I was mostly encouraged by the folks who are responding now to the public concern and showing prices when possible. [For example, in the book] I profiled a surgery center in Oklahoma that offers a menu of prices. The prices are the same for insurance as they are for individuals paying. I met revenue cycle leaders telling me that in the past, they never had to provide a price estimate for labor and delivery, but now they do, and they're working harder to meet the consumer demand for prices, often stretching the resources of their offices.

In my opinion, this situation is not the fault of people working in revenue cycle. It is the byproduct of an unaffordable healthcare system that has been managed by insurance companies with higher deductibles and narrower networks. Now people are engaged in their bills and can't afford them sometimes.

From my research, I'm [also] convinced there's no one personality type of any stakeholder in healthcare. It's not that insurers have one personality type or that you can describe hospitals with a mold. The reality is there's a tremendous amount of heterogeneity in hospitals and insurers and who they are, and it's based on the local organizational culture, the local values and the individuals running organizations and how coordinated or fragmented those organizations might be in their billing processes.

Most hospitals won't sue a [low-income] patient because it violates trust with community. [However], one-third of hospitals from our research have sued patients. I have no problems with a hospital suing to garnish the wages of someone who agreed to have plastic surgery, because the price is disclosed in those situations. Where we have crossed the line is suing low-income patients who live paycheck to paycheck above the poverty line and were not given a price when they asked for one for elective services. When I confront hospitals that do sue low-income patients about the frequency of lawsuits and patient stories, most find it egregious, and many have agreed to stop suing patients altogether.

Q: What do you see as the biggest obstacle to an efficient patient financial experience?

MM: Good stuff is happening. We're seeing institutions, especially smaller [health] centers, offer an honest menu of prices for a select subgroup of services, which is driven by employers who are now looking to contract on open market for joint replacement surgery and off-the-shelf bundled procedures. And the market's responding to that demand. Hospitals are offering services on an open market, and this is an opportunity for hospitals to be leaders. I don't blame anybody for the mess we're in. If anything, hospitals and physicians have inherited a messed-up way of doing business. But we're living in an exciting time. One example in Carlsbad [Medical Center in New Mexico]: After I saw a $11,000 bill for a CT scan, I went to the radiology department and asked how much a [scan is]. [A hospital representative] said about $5,000, and she whispered to me if you go to mdsave.com, where consumers can shop, you'll see the hospital lists it [there] for $500. 

Q: What do you want hospital revenue cycle leaders to take away from your research?

MM: My goal is to create broad healthcare literacy with the book. I explain how hospital revenue cycle departments are often reasonable, if as a patient, you can engage with them. I would like for people working at hospitals to know that this healthcare billing crisis is no one person's fault. It is a system that we inherited, and it's a broken system. Knowing about the disruptors who are changing the way business is being conducted is exciting, and it's good for people to know what's on the horizon because people are getting hammered, and everyone has a story— even hospital employees themselves. Employees have said they've been affected by collections.

There's a tremendous amount of contempt, and areas of agreement are that we can do better and healthcare costs have spun out of control, but we can fix this. There's no diabolical person in healthcare, and the purpose of the book was to say how it's starting to change and where we need to get to, and the basic steps we need to get there. Restaurants responded [to calls for nutrition information on food], and we got nutrition labels. Similarly, price transparency will usher in quality transparency.

Q: What are the next steps for your Johns Hopkins research team?

MM: Our larger effort is a two-year project to develop measures of billing quality and make billing a quality measure. Billing quality is medical quality. For example, one metric of billing quality we're developing is hospitals that provide bills that are itemized in plain English— that's a good performance on bills. Those that provide itemization but aren't understandable perform less well, and those with no itemization perform poorly.  We are also developing measures of the appropriateness of medical care. The book has some of the research, but the book was completed a year ago, so our research is ongoing.


More articles on healthcare finance: 

Minnesotans confused by surprise medical bill ads, US senator says
North Carolina county to go after nearly $30M in unpaid ambulance bills
What being a chief revenue officer entails: Freeman Health System's Kevin Gaudette on his new role


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