This is the easiest way to make a hospital CEO squirm

Until pricing in the American healthcare system is more transparent, we can expect continued reporting on shocking hospital bills and, by way of that, more blasé responses, nonsensical skirting and plain old lies from hospital administrators and executives.

I read pieces about hospital pricing — such as Steven Brill's "Bitter Pill," Elisabeth Rosenthal's ongoing "Paying Till It Hurts" series, the recent op-ed in the Wall Street Journal about a $20,000 hospital bill for a head bruise — with great anticipation for the paragraph in which the hospital spokesperson makes an appearance.

It might be the CEO, CFO, an administrator from the billing or payer relations department or a member of the media relations team. (I imagine a long thread of emails exchanged to determine which lucky employee will take the hot seat this time and get back to the reporter.) But despite the title, the quote often embarrasses the individual and, in some way, the institution.

Now, maybe this seems slightly unfair. Why should I place so much emphasis on hospital administrators when the entire healthcare economy is dysfunctional? The device companies, pharmaceutical giants, insurers — what about the roles they play? This is a huge problem, developed over years and years, that I know. But this doesn't let hospitals off the hook or make it any less wrong when they fib. One thing we should probably stop doing: Diluting responsibility by pointing to the size of the problem.   

Again and again, journalists and readers are fed bologna when they ask why a Tylenol with codeine pill at the hospital cost $36.78 when the market price is $0.50, why a troponin test cost a patient $199.50 when it cost the hospital $13.94, why a breast pump costs $543 when we could buy one for $25 online. It is maddening, and there is little urgency to bring any reason into these conversations.

When asked to explain prices for a test or drug, hospital officials often point to the chargemaster, an opaque, massive computer file that determines hospital prices. But then something strange happens. Almost immediately after upholding it as the holy grail of pricing, officials quickly dismiss the chargemaster, noting that few patients end up paying the full "sticker price" due to insurer coverage or negotiated rates. Throughout 16 months of reporting for the TIME piece, Steven Bill said he found "officials treat [the chargemaster] as if it were an eccentric uncle living in the attic. Whenever I asked, they deflected all conversation away from it. They even argued that it is irrelevant."

Some hospital officials act like journalists are dense for even thinking to ask about prices. Mr. Brill included some of hospital officials' blasé responses and bluffs in the article itself. When he asked one CFO to explain the chargemaster prices, the executive shrugged and said, "They were set in cement a long time ago and just keep going up almost automatically."

A spokesperson from Stamford (Conn.) Hospital said he doubted the CEO had seen the chargemaster list in years. "So I'm not sure why you care," he told Mr. Brill.

The senior vice president of payer relations at Yale New Haven (Conn.) Health System first told Mr. Brill the system thinks the chargestmaster is "totally fair." But when asked to explain how the price for a certain test was calculated, he said he "didn't know exactly" and would try to find out. He later said it was "a historical charge, which takes in to account all of our costs for running the hospital."

One hospital spokesperson from Chesterfield, Mo.-based Mercy told Mr. Brill that the health system's lawyers decided the CEO's discussion of a patient's medical bill (with information redacted to protect privacy) would violate the federal HIPAA law. Mr. Brill, a Yale Law School grad, founder of CourtTV and American Lawyer magazine, said he was unfamiliar with a HIPAA provision barring such discussion, but the spokesperson maintained this stance and ended further discourse.

Another hospital CEO in California told The New York Times "you need a PhD in health economics" to understand medical pricing. Not the most patient-centered thing to say, even though it might be true. And if so: Shouldn't we expect more hospital CEOs to get back to school then?

In a recent piece for the WSJ, Eric Michael David, MD, JD, wrote about the steps he took to get to the bottom of the $20,000 hospital bill he received after taking his son to the hospital for a head bruise, which was found to be medically insignificant. The main item in question was a $10,000 charge for "trauma team activation."
Armed with trauma experience in two of New York City's busiest hospitals, Dr. David said he knows what a trauma team activation looks like — and it resembled nothing that occurred around his son's care. He called the hospital, where the billing agent told him it was hospital protocol to call a trauma team where there is a head injury with internal bleeding. Dr. David said this wasn't clinically indicated, and the billing agent then said it was "county protocol" to categorize such cases as trauma. County protocol?

"I called her bluff and said if she could show me the county regulation requiring a trauma team for an 11-day-old head injury, I'd happily pay my bill. She said she'd have the head of emergency services call me," he wrote. That individual called him back two weeks later, agreeing to having the charge removed. "A week later, the hospital wrote to say that they were delighted I'd had the chance to speak with the head of emergency services, but the billing department had determined that the $10,000 charge was accurate."

These are just a few deflective strategies in recent reports about hospital bills and prices. You don't have to look hard to find them.

It will take years for our discussion about prices to gain clarity, but in the meantime, hospitals have ample room for improvement in how they handle these inquiries. With the arrogance, defensiveness and incoherence of the responses detailed here, it is almost as if the aforementioned spokespeople didn't realize they would be named and quoted in national publications. Maybe some spokespeople intend to deceive, maybe others are grasping for straws and unsure of any other way to "shape their message." I want to think some executives take on these questions with integrity, but it seems there are either fewer of those quotes or just fewer making it to print, unfortunately.  

Until hospital administrators and executives start tackling this conversation with more honesty, they are asking for a thousand more news stories that cast them in bad light.


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