Broken Bills
Americans often boast of having the best health care in the world. It is certainly the most expensive health care. We pay twice as much as people in many other industrialized nations. Are we getting our money’s worth? Some population statistics, such as life expectancy, suggest we could be doing much better. How can we make sense of the complexity of American health care?
At The People’s Pharmacy, we strive to bring you up to date, rigorously researched insights and conversations about health, medicine, wellness and health policies and health systems. While these conversations intend to offer insight and perspective, the content is provided solely for informational and educational purposes. Please consult your healthcare provider before making any changes to your medical care or treatment.
How You Can Listen:
You could listen through your local public radio station or get the live stream at 7 am EST on Saturday, May 2, 2026, through your computer or smart phone (wunc.org). Here is a link so you can find which stations carry our broadcast. If you can’t listen to the broadcast, you may wish to hear the podcast later. You can subscribe through your favorite podcast provider, download the mp3 using the link at the bottom of the page, or listen to the stream on this post starting on May 4, 2026.
Why We Pay Twice as Much for Health Care
One reason Americans pay twice as much is the complexity of our health care services. We often call it a health care “system,” but it often doesn’t feel as coordinated as a system ought to be. Many other countries have universal health insurance coverage in one form or another (and there are many). That means the government has an incentive for keeping costs down. With so many different payers and players in the US, the incentives frequently go in the other direction.
You may notice this if you examine an explanation of benefits from Medicare or a private insurance company. There may be a sizable gap between what the provider charged and what insurance approved. Who pays the retail price? Only people who don’t have insurance, who are usually those least able to manage a big bill. If you find yourself faced with a hospital bill and no insurance coverage, it is important to talk with the billing department. Nonprofit hospitals should have a mechanism for patients without coverage to negotiate a lower total or a longer time frame in which to pay. Even some for-profit hospitals and medical practices are open to negotiation, but starting the negotiation as early as possible is key.
How Much Does an Emergency Cost?
Nobody plans for a medical emergency. That is the nature of emergencies–they are unexpected. If you need an ambulance to get you there, if you have to be transferred to another hospital with a better ability to care for your problem, if the doctors must do multiple tests to make a diagnosis will all influence your bill. As a result, emergency visits could cost from tens of thousands of dollars to a million or so. With high-deductible health insurance, a person or their family could end up owing more than they can pay. That is how some cases of bankruptcy are rooted in high healthcare bills.
We Pay Twice as Much Because Providers Make More
In the US, doctors were once in the same category of professionals as teachers or firefighters. Those days are long gone. Healthcare providers here are compensated more generously than providers in many other places, such as Canada, Japan or Israel. Moreover, just as there are middlemen in the prescription insurance business (called pharmacy benefit managers, PBMs), health insurance has its own middlemen. The result is a great deal of complexity, very little transparency, and a lot of parties trying to make money on each transaction. That also leads to a great deal of administration, which further increases the cost.
Why Don’t Market Forces Control Costs?
Some analysts suggest that the free market should be able to control costs. But for market forces to work, you need competition and transparency. Over the last decade or so, there has been increasing consolidation in every sector of health care. Competition is limited in most areas. Moreover, transparency is in very short supply in health care. For years we have been talking about how hard it is to do comparison shopping for health services like MRI scans or colonoscopies. If consumers cannot compare costs or value, they cannot make the rational decisions that would help moderate prices.
How Administrative Costs Increase Bills
Part of every insurance premium goes to paying administrative costs. Insurers pay people to review claims (and deny some). Preauthorization also adds to administrative costs.
Manage the Hospital Bill So You Don’t Pay Twice as Much as You Should
Years ago, we interviewed Marshall Allen, who titled his book Never Pay the First Bill. Our guest for the current episode counters always request an itemized bill. That way you can check it to make sure that simple items such as names, dates and insurance policy numbers are correct. Then look at whether the services billed are actually the services received. An estimated nine of ten hospital bills contain mistakes. The sooner you catch them and contest them, the less likely you are to have to pay them. To determine what you must pay, you may need to review the summary of benefits on your insurance policy. That lays out in detail exactly what the insurance will cover.
What Can Patients Do So They Don’t Pay Twice as Much?
- Ask for an itemized bill and check it carefully in every detail.
- If you find a mistake, contest it. Sooner is better, even though you may be trying to recover from a serious illness.
- Ask the billing office about patient assistance or a negotiated payment plan.
- Check with the Patient Advocate Foundation. They may be able to help in an individual case.
- Find out if your state has a consumer assistance program in the department of insurance.
- Notify an intractable billing department that your story will appear in your social media feed. This should probably be the last step if the previous ideas don’t work. But hospitals really don’t like bad publicity, so it might give you leverage you wouldn’t have otherwise.
This Week’s Guest
Linda J. Blumberg, PhD, is a research professor at Georgetown University’s McCourt School of Public Policy. She is an expert on private health insurance (employer and nongroup), health care financing, and health system reform.
Linda J. Blumberg, PhD, describes why we pay twice as much for healthcare
Listen to the Podcast
he podcast of this program will be available Monday, May 4, 2026, after broadcast on May 2. On this episode, Dr. Blumberg discusses the importance of the summary of benefits in your insurance policy in greater detail. You’ll hear about a situation in which an emergency department overcharged a patient egregiously; the summary of benefits was key in resolving the problem. You can stream the show from this site and download the podcast for free.
Download the mp3, or listen to the podcast on Apple Podcasts or Spotify.
Transcript of Show 1471:
A transcript of this show was created using automated speech-to-text software (AI-powered transcription), then carefully reviewed and edited for clarity. While we’ve done our best to ensure both readability and accuracy, please keep in mind that some mistakes may remain. If you have any questions regarding the content of this show, we encourage you to review the original audio recording. This transcript is copyrighted material, all rights reserved. No part of this transcript may be reproduced, distributed, or transmitted in any form without prior written permission.
Joe
00:00-00:01
I’m Joe Graedon.
Terry
00:01-00:05
And I’m Terry Graedon. Welcome to this podcast of the People’s Pharmacy.
Joe
00:06-00:27
You can find previous podcasts and more information on a range of health topics at peoplespharmacy.com.
Medical bills can be mysterious or infuriating. How can you make sense of the complexity and pay a fair price? This is The People’s Pharmacy with Terry and Joe Graedon.
Terry
00:34
Here in the United States, we pay more for our health care than people in any other comparable country. Despite this, our longevity statistics are worse.
Joe
00:46
We’ll talk with an expert about how we got ourselves into this mess and what we might be able to do about it.
Terry
00:54
She’ll help us better understand medical billing and how to challenge mistakes.
Joe
00:59
Coming up on The People’s Pharmacy, why Americans pay twice as much for less care.
Terry
01:15
In The People’s Pharmacy Health Headlines: An estimated two-thirds of American adults drink coffee every day. Now scientists have an idea why coffee is so popular.
Researchers recruited 31 coffee drinkers and 31 people who do not drink coffee for a detailed study. They compared the composition of their gut microbiota and found some striking differences. Then the coffee drinkers abstained from coffee for two weeks. During this time, the investigators noticed changes in their gut microbiota. After two weeks, coffee drinkers were once again provided with their beverage. Half the volunteers got regular caffeinated coffee, the other half got decaf. Neither researchers nor participants knew who got which beverage. Non-coffee drinkers did not participate in this part of the experiment.
Coffee-drinking volunteers reported less stress and depression whether the coffee had caffeine in it or not. People drinking decaf had improvements in learning and memory, possibly due to the polyphenols. Those getting caffeine in their mugs reported less anxiety but better attention and vigilance.
The scientists note that coffee is much more than a caffeine delivery mechanism. Coffee consumption also has an effect on the immune response.
Joe
02:37
Vertigo can be a disorienting and disturbing symptom. A recent overview published in JAMA describes one of the most common forms, benign paroxysmal positional vertigo, abbreviated BPPV. It’s caused when calcium carbonate crystals inside the ear move out of position.
A sensation of non-spinning dizziness or lightheadedness occurs when people lie down or change position. The diagnosis of BPPV relies on observing eye movements called nystagmus that occur when the head moves. It can be treated with a set of prescribed head movements called the Epley maneuver.
Although physicians often prescribe the antihistamine meclizine for vertigo, this drug is not effective for treating BPPV. Patients can also self-treat this condition by performing the Epley maneuver at home with good results.
Terry
03:34
Levothyroxine is one of the most prescribed drugs in America. That’s because millions of people have a sluggish thyroid gland. The condition is called hypothyroidism. Medical experts have worried that it is being over-diagnosed, especially in older people, based solely on thyroid function blood tests.
The investigators set out to examine whether de-prescribing levothyroxine is feasible. Study participants were all 60 or older and had been taking levothyroxine at the same dose for at least a year. The doctors began gradual dose reductions. Over the course of a year, 25% of the 370 volunteers were able to get off levothyroxine without having TSH or T4 levels go out of range.
Joe
04:24
One of the most contentious issues among nutrition experts in recent years has revolved around fat, in particular, the benefits and risks of omega-6 polyunsaturated fatty acids, or PUFAs. The AHA has long promoted PUFAs found in vegetable oils because they’re heart-healthy. Critics suggest that an imbalance with excessive omega-6 fatty acids could be harmful. Nutrition scientists distinguished between one specific omega-6 fat, linoleic acid, and all the others.
Researchers used data from nearly 274,000 volunteers registered with the UK Biobank. These middle-aged, healthy people had no dementia when the study began. Blood tests revealed the balance between linoleic acid and other omega-6 fatty acids.
Over the next 15 years, 5,800 individuals developed dementia. Those with the highest levels of linoleic acid were almost 20% less likely to come down with dementia. In contrast, those with the highest levels of other omega-6 fats were about 20% more likely to have a dementia diagnosis.
The scientists call for research on whether increasing dietary linoleic acid might help protect people from dementia.
And that’s the health news from The People’s Pharmacy this week.
Terry
06:15
Welcome to The People’s Pharmacy. I’m Terry Graedon.
Joe
06:18
And I’m Joe Graedon. Have you ever received a confusing medical bill? Actually, let me correct myself. Have you ever received a bill from a hospital that was not confusing?
Terry
06:30
Most of us have had, oh, maybe a moment of alarm when we’ve had to try and decode a complicated medical bill. Why is the American system so hard to navigate and so difficult to afford? We pay far more for our health care than people in any other comparable country, and we have much less to show for it.
Joe
06:53
To learn more about health care in America and how it compares to other countries, we turn to Dr. Linda Blumberg. She is a research professor at Georgetown University’s McCourt School of Public Policy. Dr. Blumberg’s expertise is in private health insurance, health care financing, and health system reform.
Terry
07:17
Welcome to The People’s Pharmacy, Dr. Linda Blumberg.
Dr. Linda Blumberg
07:20
Thank you so much for inviting me today.
Joe
07:23
We are delighted to be able to talk to you about, I think, one of the most challenging issues facing health care in America, and that has to do with our system for paying. So perhaps you can explain briefly how our payment system in the U.S. compares to most other advanced countries.
Dr. Linda Blumberg
07:47
Well, it is much more complicated than in most other advanced countries, probably in all other advanced countries. And that’s because we have so many payers and so many different sets of prices that are used for providers, for insurers, for different plans, et cetera, and how employer plans work. So the variation is enormous, which causes a lot of confusion for consumers.
And frankly, it often causes confusion for the providers as well.
Terry
08:17
I wonder if you would explain, Dr. Blumberg, you say so many different prices, which implies that if I were to go in for a CT scan of something, I might get one price and somebody else who has the exact same procedure done maybe charge something completely different. How does that work?
Dr. Linda Blumberg
08:39
That’s absolutely correct. And it all boils down to what type of insurance you have and what plan you have.
So if you are somebody who is enrolled in Medicare, the program in the U.S. for those who are 65 and over or who have particular disabilities that qualify them, there are prices that are regulated by the federal government in terms of what a provider can charge for each service.
If you have private health insurance, however, there is no regulation on the prices. And so a lot of it depends on what the market will bear for the particular provider that you happen to be using and the negotiations that they have completed with the particular insurance plan you have.
And so you may have a United Health Insurance Plan and somebody else may have a United Health Insurance Plan, but they’re two different plans and those would pay different prices for the same procedure.
Joe
09:34
Well, we’ll talk about billing in a minute, but what has always confused me is the idea that if you have insurance and you have to go into the hospital for some sort of a procedure, you would get bill X if you have insurance company Y.
But if you have no insurance and have to pay out of pocket, it can be substantially greater. I mean, like dramatically more expensive, which seems like it’s just [bleep]-backwards. Pardon my language. I mean, it just seems upside down.
How do they figure out these crazy prices?
Dr. Linda Blumberg
10:20
Well, first of all, we do not have a rational basis for deciding the prices that an insurer is paying to a particular provider or what a particular provider is going to charge to someone who’s uninsured. And you’re right. If you walk in the door without any insurance coverage, you are likely to be charged the highest price of anybody that’s walking in the front door of a hospital.
And that is because there is no insurer or third-party administrator that is negotiating any prices on your behalf. So you’re basically being charged the, you know, the retail rate, which is the highest that there is.
What a lot… as you say, it makes no sense because usually people without insurance are the people with the lowest incomes, right? And they have the least ability to pay for these services.
And oftentimes the hospitals, in particular, the nonprofit hospitals are required to have programs that lower prices for people with modest incomes that are coming in without insurance. However, they often don’t even advertise that these programs exist. They’re hard to find even on their websites.
And so people who are walking in without insurance are being charged huge prices, and they have to know to say, “Listen, well, I have low income and I need to have access to someone who’s going to help me with whatever program you have for low income people walking in the door.”
So it is a lot of hit and miss in terms of what people understand about what might be available to them and what negotiated deals a particular hospital has made with a particular health insurance plan. And it’s often a function of how much market power the insurer and the health care providers, the health system have in that particular area is going to drive whether the prices are lower or higher.
Terry
12:22
Dr. Blumberg, you mentioned the retail price of a procedure or a hospitalization. And you also mentioned that Medicare prices are regulated, even though all these other prices are not. I’m going to mention, as a Medicare patient, I occasionally look at my explanation of benefits and I find them very confusing and/or alarming because what I see is that my provider, for example, might charge $355 for something. So that’s the retail price. And Medicare approves, let’s say, $128, you know, as that’s the approved payment, but it doesn’t pay that full amount. And then the supplemental, I happen to have Blue Cross, picks up usually most of what Medicare doesn’t pay on the amount that Medicare has approved. But there’s such a mismatch between that retail price and that approved price. How does that work?
Dr. Linda Blumberg
13:40
Well, that shows you that when somebody who walks in the door to get the retail price is being charged much more than somebody who’s coming in with Medicare. And that is by federal government law, is that physicians who take payments from Medicare, who participate in Medicare, have to agree to take the rates that are set out in federal law.
And these providers know they’ve made this agreement with the federal government. That’s why they’re participating. So this is customary for them. It’s not surprising to them that there is a disconnect between those prices. In fact, very few people end up paying the actual retail price.
But if you’re walking in with private health insurance, you’re likely to pay considerably more than or your insurer is going to be paying more and you are likely to pay some more also compared to the Medicare prices. So on average, and this is just on average, hospital payments under private insurance are in the neighborhood of two and a half times what Medicare pays. And for physicians, for clinicians, it’s more on average about 25% above what Medicare pays. So the variation is large even around that.
You know, for some procedures and for some clinicians, they may be getting 600% of Medicare or 900% of Medicare. It varies enormously through the system. And that’s why I say we’re not paying privately on any rational set of prices.
Joe
15:17
So what has really boggled my mind is that if, for example, you need a hip replacement, as I have had, or a cataract surgery, the provider may charge thousands of dollars. Let’s just make up a number and say, you know, $3,500 for this particular cataract surgery. But Medicare may only pay a few hundred dollars.
It’s like the discrepancy is so dramatic. It would be as if the sticker price for your car is $25,000, but you actually only have to pay $18,000. I mean, people are so shocked by these numbers. They seem to make no sense whatsoever.
And you kind of wonder, well, how can this system function if these billable numbers are two, three, four times more than the doctor actually gets paid? It seems insane.
Dr. Linda Blumberg
16:19
Except for the doctor doesn’t really expect to get paid the amount that they’re showing on the bill, they have negotiated particular rates of payment with insurance plans, and they have accepted the federal government fee schedule, which is public information.
So the retail prices that you see are really pretty meaningless because the real prices are the ones that have been negotiated with whoever the insurance company is, whether it’s public or private.
Joe
16:50
Unless you don’t have insurance, unless you’re not eligible for Medicare, in which case you’re on the hook for an unbelievable amount of money that you can’t possibly afford.
Dr. Linda Blumberg
17:02
Absolutely. But then, you know, I always suggest to consumers when they’re in that situation, first of all, if it’s with the hospital, to explore what programs they have for uninsured people with modest incomes. Because if it’s a nonprofit hospital, they’re required by law to have some kind of program. Whether a particular individual is going to qualify for it is up to what that program looks like. But you always explore that.
And absent that, or if you’re talking about care you’ve received from an individual physician, I always suggest that the consumer talk to the physician, talk to the financial manager for the practice and see if there’s some way to negotiate that rate down. Because as you said, it doesn’t make any sense and nobody with private insurance is paying for it.
Terry
17:51
You’re listening to Dr. Linda Blumberg, research professor at Georgetown University’s McCourt School of Public Policy. Dr. Blumberg’s expertise is in private health insurance, health care financing, and health system reform. She has analyzed the Affordable Care Act and studied strategies to address remaining health insurance coverage issues.
Joe
18:14
After the break, we’ll ask Dr. Blumberg how much an emergency might cost.
Terry
18:18
Are we getting any bang for our buck compared to other countries? How do health insurance middlemen affect the cost of care? Some people suggest that the free market should take care of the pricing problems.
Joe
18:29
Why haven’t market forces brought health care prices down?
Terry
18:43
You’re listening to The People’s Pharmacy with Joe and Terry Graedon.
Terry
20:45
Welcome back to The People’s Pharmacy. I’m Terry Graedon.
Joe
20:48
And I’m Joe Graedon.
Joe
21:17
We’re talking about the high cost of health care in the United States. Are we getting our money’s worth? We pay far more than people in most other countries, but our health statistics are abysmal.
Terry
21:31
Many families in America go into debt because of huge medical bills. In some cases, people have lost their life savings and their homes because of a health care crisis.
Joe
21:42
Will cuts to Medicaid make this situation more challenging? Will hospitals close because of reduced financial stability?
Terry
21:52
Our guest is Dr. Linda Blumberg. She’s a research professor at Georgetown University’s McCourt School of Public Policy. Dr. Blumberg’s expertise is in private health insurance, health care financing, and health system reform.
Joe
22:10
Dr. Blumberg, in the event that you had an emergency, and let’s say you had to have an ambulance and then you had to go to the emergency department, maybe you thought you were having a stroke or a heart attack, and then you’ve seen multiple specialists and you have a whole bunch of tests, CT scans and goodness knows what else. And then you have to stay in the hospital with maybe a couple of procedures for, let’s say, three to five days. How much might your bill be at the end of this hospital stay?
Dr. Linda Blumberg
22:43
Well, a total bill for a hospital stay can be enormous. It depends upon the services you’ve received, how long you’re staying. But, you know, it can often be in the tens of thousands of dollars. But, you know, there are people who have inpatient stays in a hospital for a length of time in serious conditions that could be a million dollars, right?
So it all varies a lot, but an emergency department is a particularly expensive place to obtain care, and hospital stays are the most expensive costs that we face in our healthcare system.
Joe
23:17
I’d like to ask you about how much bang we’re getting for our bucks in the United States compared to other advanced countries, because, you know, we have done an amazing job at getting smoking down. I mean, turn back the clock about 40 or 50 years and like half of Americans, especially men, smoked. And today it’s down around 12 or 15 percent or lower, maybe around 10 percent. So we’ve made some real progress in terms of health behaviors. But that aside, our life expectancy has not improved dramatically.
Other countries, for example, Japan, South Korea, Sweden, and France are all about 83 to 84 years of age. In the U.S., our life expectancy is around 78 years. We spend annually over $12,000 a year per capita per person. In Germany, it’s 8,000. In France, it’s $6,600. And in Sweden, it’s $6,400.
So almost half of what we spend. And yet their longevity is much greater. I mean, substantially better. How? I mean, what?
Terry
24:37
What gives?
Joe
24:36
What is going on? How can it be that we’re paying so much more for so much less?
Dr. Linda Blumberg
24:45
Really good question. Part of what’s going on and probably the biggest difference in terms of what we spend compared to other countries, developed countries on health care, is the prices that are paid to the health care providers from, you know, who we’re receiving our care from.
So a hospital stay for the same services in the United States is typically going to cost considerably more than if those services were obtained in Canada or in Japan or in Germany or in Israel. So those are systems that… where all of the… There is regulation of the prices that are paid, are paid for medical procedures, regardless of the type of insurance coverage you have. And some of them have, you know, different plans, et cetera, not as much variation as we have here, but some variation.
But all of those prices are limited in those countries by government dictate. And we are, as I said, we’re only limiting the prices that we pay for medical care if you’re in a public insurance program like Medicaid or Medicare. If you have private insurance, which most people below age 65 have a private health insurance, those prices are not regulated.
In addition, when you think about longevity, we do have a more diverse population in a lot of respects than is the case in most other developed countries.
But in addition, we have the issue here of still having a significant number of U.S. residents without any health insurance coverage at all, which is not the case in these other developed countries where they have at least some level of universal health insurance coverage. And sometimes it’s considerably more comprehensive than the types of coverage we have here.
And so when you have a significant share of the population, even if it’s only at this point under 10%, about 10% of the population under age 65, you still have a considerable number of people who are not getting access to medical care when they need it. And that is going to affect longevity.
Other things like diet and pollution and, you know, various other different issues. We have a lot of gun violence here, which is not the case in the vast majority of other countries. So all of those things go into the difference. But the difference in our spending is completely on the prices that we’re paying to our health care providers on the commercial side.
Terry
27:25
Dr. Blumberg, you’ve written about health insurance middlemen. I wonder if you could explain what that is and how it affects the prices we pay.
Dr. Linda Blumberg
27:35
Sure. So when we are obtaining medical care in this country, we are paying for the particular services, right? And money is going to the providers who are providing these services to us. But we’re also paying administrative costs. And those administrative costs are built into the prices that we’re paying to hospitals and doctors and other providers. And it’s also built into the premiums that we’re paying for our health insurance coverage.
And increasingly in this country, we have moved our healthcare economy into a space where huge numbers of dollars are going for administrative fees that are associated with what I refer to as middlemen. People have heard a lot about prescription drug benefit managers.
But the same is true on the medical side. So a hospital is spending large amounts of money on a revenue cycle management company that is trying to figure out how to send in bills and code the services delivered to increase the revenue of the hospital. Same on the physician side. You have various different types of entities that are contracting with insurance companies to do particular types of tasks that the insurance company or the third-party administrator either doesn’t want to do themselves or finds more profitable to contract out to their subsidiaries.
So there is a lot of dollars that are going into making the prices higher on the claim side, on the medical service price side, and that are also being built into our insurance premiums through higher claims and through higher administrative loads that are attached by the insurer. So, I mean, we’re talking about an industry that is hundreds of billions of dollars every year that is really extractive, that’s pulling dollars out of every one of the transactions. And there’s billions of transactions that go through our system every year.
And so these entities, these administrative and financial entities have figured out how to extract dollars from the healthcare economy by adding some administrative costs to every single transaction that is being processed through the system.
Joe
30:07
Dr. Blumberg, I think most people have a real hard time dealing in billions and dealing with middlemen and all the other stuff, but they can relate to an office visit. So for example, if you had to go see a specialist in this country, maybe a gastroenterologist or a dermatologist or a cardiologist, those bills for just a quote unquote ‘regular visit’ could be in the hundreds of dollars.
In Sweden, it’s 40 bucks. That’s the maximum a specialist can charge in Sweden. Kids are free in Sweden. I think most parents know that a pediatrician’s visit can be pricey. They have no health care premiums in Sweden. It comes off their tax bill. The average hospital bill in Sweden for a day, this, you know, being in the hospital for a day, is $11. In this country, it can be thousands. And the maximum that a person would pay for all medical appointments annually in Sweden, everything lumped together would be $160. It can cost us $160 for just one visit in this country.
So I’m just wondering, when will the American public say enough is enough?
Dr. Linda Blumberg
31:38
So I think one important thing to remember is that, yes, when somebody is taking their kid to a pediatrician in Sweden, they’re not paying anything out of pocket. But their taxes are higher, right? Because those providers still have to be paid for the services they’re providing. It’s a matter of how the prices are, how they’re being paid. And in those countries, much more of the dollars are flowing through their national health system, which is funded by tax dollars.
And so the tax rates in Sweden, for example, are typically quite a bit higher than we face in the United States. But they, at the same time, obviously the country is regulating how much the providers can earn for providing the services that they’re provided. So there are some limits that lower the incomes, the revenue that the providers receive, but much more of the dollars are flowing through the government and from tax dollars than is the case here.
We have always struggled here in the United States with balancing, number one, regulation. How much do we want to regulate prices instead of letting the market decide what a private sector person like a health care provider or hospital is going to receive? And we also struggle with increasing our taxes, right? And so we could create a system where we have greater regulation of the prices and limits on prices that are paid to health care providers to lower our total spending. We can also finance more coverage through the federal government or through state government for more people.
But it is a real political struggle to convince people that while they feel like their… that health care is too expensive, they’re afraid of oftentimes of putting limits on what their particular doctor is going to make or their particular hospital is going to make. Because the hospitals and the physicians will let them will tell them whether it’s accurate or not, that their access and their quality of care is going to suffer if they do that.
And there are also people in this country are very much resistant to significant increases in their taxes, even if you tell them it’s going to lower other out-of-pocket expenses because they don’t really believe it, right? Or they think they’re going to end up paying more for somebody else to have lower prices. So it is a very complicated political balance here.
I think people are getting more and more frustrated with the way that the system works and the increase in the denials and the red tape and the complexity people have to jump through to obtain their medical care. But the political challenge is real in terms of more government regulation of prices and/or financing more care through the tax system.
Terry
34:43
Well, you’re absolutely right. It is very complicated politically. And you mentioned that one of the alternatives that is sometimes posited is: let market forces regulate prices, which is, I think, where we are, except that market forces are only making prices higher, not lower.
Why doesn’t health care in America work like a market should?
Dr. Linda Blumberg
35:12
We have had a tremendous amount of consolidation in our healthcare industries. And so when we talk about hospitals being bought, you know, buying other hospitals and creating hospital systems and, you know, sometimes often now buying medical practices, insurance companies, UnitedHealthcare is now the biggest employer of physicians in this country, right?
The insurers and the healthcare systems are buying up these middlemen that are making more money off of, you know, as I was saying, extracting dollars from the claims that are being processed. So there’s been a tremendous amount of complexity added in the financial relationships between all of these stakeholders, the providers, the insurers, the middlemen.
Very few of them are independent at this time. Very many of them have conflicts of interest, all directed in the direction of increasing prices on the commercial side and increasing spending.
Terry
36:15
Right. Lots of complexity, not much transparency.
Dr. Linda Blumberg
36:18
Right. It is basically capitalism run amok. And you’re talking about a product in health care that was already from the beginning of time, much more complicated to shop for than a refrigerator, right? You know, you don’t know necessarily what you’re going to need in terms of services or what it’s going to cost before you walk in the door at the doctor’s office or in the hospital.
It is not something that is easy to shop for, whereas I can, you know, spend 20 minutes and figure out what the best price I can get on the refrigerator I want is. That’s just not the way medical care works. And then when you take the consolidation and the hidden fees and the conflicts of interest that have arisen both between co-ownership in the healthcare industry and these financial deals that are being made between the insurers and the middlemen and the providers at this point, you have a situation where there is no competition in these markets or where there is, it’s extraordinarily limited.
And so you’re not going to… the more this is allowed to fester and expand, which is what it is doing year in and year out, the worse it’s going to get. You’re not going to have competition driving prices down. You’re going to have greater financialization of the system continuing to drive prices up.
And really the only way to interfere with that is for government to put limits on both what prices can be charged for particular services and to eliminate the financial dealings that are interconnecting all of these stakeholders with each other and encouraging higher intensity coding and hidden financial fees that are passing between different entities that are driving costs up for consumers and employers.
Terry
38:14
You’re listening to Dr. Linda Blumberg. She’s a research professor at Georgetown University’s McCourt School of Public Policy, and she is an expert on private health insurance, health care financing, and health system reform. Dr. Blumberg has provided technical assistance to states in their efforts to analyze and implement federal reforms and examine the implications of private equity companies’ movement into health care.
Joe
38:43
After the break, we’ll discuss why you need to examine your hospital bill extra carefully and with skepticism.
Terry
38:52
Hospital bills are complex and they often contain errors. To really figure out the charges, you need to request an itemized bill.
Joe
39:01
Surprisingly, your insurance company might not behave like an ally.
Terry
39:09
How do you contest a bill that is obviously wrong?
Joe
39:12
Sometimes media exposure of outrageous bills can make a big difference. Most hospitals hate bad publicity.
Terry
39:31
You’re listening to The People’s Pharmacy with Joe and Terry Graedon. Welcome back to The People’s Pharmacy. I’m Terry Graedon.
Joe
39:46
And I’m Joe Graedon.
Joe
40:16
Are you the kind of person who pays bills as soon as you get them? Nothing wrong with that. But when it comes to hospital bills, you may need to slow down. It turns out they often contain errors that can be tough to track down.
Terry
40:33
Medical bills, especially hospital bills, can be extremely complex. And hospitals make mistakes all the time. You’ll need to scrutinize every charge.
Joe
40:44
We’re talking today with Dr. Linda Blumberg, research professor at Georgetown University’s McCourt School of Public Policy. Dr. Blumberg’s expertise is in private health insurance, health care financing, and health system reform. She has analyzed the Affordable Care Act and studied strategies to address remaining health insurance coverage issues. Dr. Blumberg has also analyzed approaches for setting standards of affordability for insurance coverage.
Terry
41:14
Dr. Blumberg, some years ago, we spoke with a fellow, I think his name is Marshall Allen, who wrote a book. He titled it: “Never Pay the First Bill.” And we found our conversation with him quite interesting. I’m wondering what you think of that advice.
Dr. Linda Blumberg
41:34
Well, I think my advice is always be skeptical and look carefully at a bill. Don’t just pay it, because the vast majority of them, whether they’re coming from a hospital, much more likely from a physician, also reasonably likely there’s mistakes in them. And so you do want to approach them with some skepticism and caution.
Joe
41:58
Well, actually, that’s not enough. And the reason I say that’s not enough is because most of us, when we look at a hospital bill or a clinic bill, we don’t know what to make of it. I mean, it is really confusing. And as you said, there’s like the bill that the doctor presents and the bill that the clinic presents or the hospital presents.
And then there’s what Medicare might pay or might not pay or your insurance. It’s like, how in the world do we make sense of our medical bills? How do we even get started?
Dr. Linda Blumberg
42:38
It’s rough and it takes a good deal of patience and time, unfortunately. Hospital bills in particular, I’ve heard estimates that nine out of 10 of them have errors. I’ve heard others say that there’s never a hospital bill that doesn’t have an error in it, right? And they’re the most complex of the bills that an individual is going to receive.
My advice is always the first thing you do is request an itemized bill from the hospital, because by and large, what the hospital will send out is a summary bill, not an itemized bill. And you can’t figure out what the errors are in general from a summary.
So request an itemized bill. If they don’t send it, you got to ask again, because sometimes they’re a little pokey about it because they just want you to pay. They don’t want you to look at the itemized bill.
Joe
43:26
Well, let me ask you this: let’s say you get an itemized bill and it says that you had an ultrasound done on such and such a date of, you know, such and such a part of your body and you go, “No way. I did not have an ultrasound at all.”
How did that happen? And then how do you contest something that’s obviously wrong?
Dr. Linda Blumberg
43:53
The first stop from my perspective is to call the billing department, to call the physician’s office of the physician that you’ve seen and contest it and say, there’s a mistake. I’m being charged for a service that I never received. An insurance company, if you have an insurer, can also often be helpful when you’re talking about something you’ve been charged for that is something you have not received. But it sometimes will take multiple calls and multiple interactions to resolve a problem like that.
You know, one of the most common errors that people see in hospital bills is being billed twice for the same thing or the number of, you know, something that was charged for, you know, some supply or something is, you know, somebody added a zero to it by mistake, you know, assumedly. And that needs to be corrected, and so engaging with the physician who you’ve received services from with your insurer and trying to contact the billing department directly at the hospital…
Joe
44:59
Let me ask you one follow-up to that, because you would think that since the insurance company, if you’re fortunate enough to have insurance, would be an ally, would be joining you in fighting an incorrect bill or a bill that was overcharged for some reason or a service that was never provided or a medication that you never got.
We’ve heard that insurance companies, they’re not as likely to be enthusiastic about challenging these bills because after all, they’re just going to pass those charges on to their customers and consumers. It’s like, well, why waste our time? Because you, you know, you, you were charged for aspirin, but you didn’t get aspirin. So how do we get the insurance companies fired up to actually challenge mistakes?
Dr. Linda Blumberg
45:55
It is sometimes a struggle for sure. One of the things that people should be aware of, and what I talk about when I talk about this complex web of interconnected financial interests across stakeholders in the healthcare industry, is that insurance companies, they can make greater profit the higher the claims. Under the law, they are limited in terms of what percentage of a premium can go to administrative costs, including profit. So since that’s limited as a percentage, the higher the total spend on claims, the bigger the amount of money they have left over for their administrative costs and their profit.
And so in a lot of ways, they’re disincentivized to hold down spending, which is contrary to what many people who are using, buying health insurance coverage expect of their insurer. They think their insurer is trying to get the best deal for them. That is not always the case.
And so you can talk to the consumer reps with the insurer, but sometimes you’ve really got to go directly to the provider and dispute. And there’s a nonprofit called the Patient Advocate Foundation that is particularly created to help people with chronic illnesses contest incorrect bills and deal with billing issues. There are others who will do it for a fee as a percentage of what savings created.
But it becomes sometimes a situation where the consumer themselves needs to do repeated calls and contacts and filing complaints in order to get a bill resolved. But I still always say contact the insurance company as well. They may be in a mindset to help out.
Terry
47:52
Dr. Blumberg, you’ve mentioned that patients can and probably should negotiate with whether it’s the physician’s office billing or the hospital billing, especially if they don’t have insurance, but even if they do. Can you tell us about a time when somebody did that? What was the outcome?
Dr. Linda Blumberg
48:17
Well, sure. I mean, I think it depends greatly on the health care provider, right? And if you have had a primary care physician for many years and then you’ve lost health insurance coverage or for some reason you have a gap or et cetera, you know, there are ways in which, you know, in circumstances where these providers will either set up a payment plan for you, or they’ll say, “Listen, you know, you’ve been a great patient and I want to help you through this rough spot.” And they’ll negotiate down, you know, hopefully to what at least at a minimum that the private insurer would have paid, right?
But it is very much [an] ad hoc kind of decision that’s being made by these providers. Now, in the situation of a hospital, particularly for people who have modest incomes, there are programs that nonprofit hospitals have, as I mentioned before, that are there to help people in financial straits. And those programs, sometimes they’re programs that are funded by state government dollars. Sometimes it’s… parts of it, the hospital themselves, but those are programs that exist explicitly for people in tough situations. And some… but some… The problem is you have to really push to get the information about them to figure out whether you’re eligible.
Joe
49:41
Dr. Blumberg, what about media exposure? I mean, every once in a while, somebody sort of blows the whistle on an outrageous bill that just blows everybody’s mind. It’s like, that’s ridiculous. And they contact their, their local TV station or their newspaper, and all of a sudden, you know, it goes, you know, wild on the internet, and it affects the hospital in such a way they say, “Oh, never mind, let’s negotiate a better bill.”
Is that something that people can actually do successfully?
Dr. Linda Blumberg
50:15
Yes, people have done it successfully. And there’s, you know, ‘bill of the day’ kinds of newspaper reporting, et cetera, where some experienced reporters are doing this repeatedly on behalf of people in particularly egregious circumstances. And it can be really effective at cutting through to the right people at the right moment to get a better deal created. And so, listen, if I was in that situation, I would use whatever options I had at my disposal.
You know, in some states, unfortunately, it’s not all states, but in some states, state governments have what are called consumer assistance programs. They were originally funded by the federal government across the country, but that funding has not been reappropriated in many years now. But those consumer assistance programs, if you’re lucky enough to live in a state that has one, can sometimes also be helpful if you contact them, file a complaint with the state. If it’s a problem with the insurance company and it’s a fully insured product, not a self-funded plan from the employer, you can file complaints with the Department of Insurance, et cetera.
So there are opportunities for going higher. And I always suggest to people, even if you’re contacting someone at the hospital, if you’re not getting any kind of satisfaction from a consumer rep, you want to escalate to a manager, to whoever. You want to just go as high as you can in the pecking order to try to get some resolution.
Joe
51:50
We are concerned about pharmaceutical prices, as you can very well imagine here on The People’s Pharmacy. And we have seen pharmacies disappearing in this country at an extraordinary rate, in part because private equity firms have bought up large chains, and those large chains are now closing not dozens but hundreds of pharmacies. And so the idea of a mom-and-pop pharmacy where the pharmacist was a sole operator seems to be disappearing very quickly. And drug prices, as everybody knows, are way higher in this country than any place in the world.
What do you suggest when it comes to the costs of medicine in this country, especially for people who have life-threatening conditions and their bills may be in the tens of thousands of dollars?
Dr. Linda Blumberg
52:43
It’s really, really difficult. And I wish I had a good answer for you. I know some people are trying to obtain medications at more affordable prices outside of the country. That’s always challenging and a little bit risky depending upon where you’re going to get the medications. But there are some programs that particular pharmaceutical companies have that lower prices for people with modest incomes or people who do not have health insurance coverage for brand-name types of drugs that they need.
And so, you know, I usually suggest to people, first stop if you can’t get satisfaction or help from your insurance company. And sometimes if it’s not on their formulary, you can get evidence from your… help from your physician about why that particular drug is so necessary to try to appeal and get coverage from your insurance company. If you’re without insurance or without good enough insurance to cover costs, I would suggest to people go to the website for the company that makes your drug and see if they have some programs that might be able to help.
There are also some states [that] have particular programs for providing financial support for prescription drugs.
Joe
54:04
Dr. Blumberg, we only have about two minutes left. If we were to put you in charge of the entire health care system, how would you change things?
Dr. Linda Blumberg
54:15
Well, first of all, I would put back a number of the coverage cutbacks that this administration has put in place or that they will be putting in place in the near future in the Medicaid program because every person in this country should have access to affordable, adequate health insurance coverage for their medical needs.
Beyond that, I would put limits in place on the prices that are charged by providers, and I would do it broadly across all prices, and hospital level, physician level. I would include prescription drug controls in that as well. I would then make sure that we are monitoring a system to make sure that everybody has the access that they need.
And I would do a lot to break up the kinds of integrated financial incentives from co-owned entities in the healthcare system to separate those financial incentives, create more competition and clarity in terms of what people are paying when they obtain care.
And I think we’ve also got to go a ways to your point about the prescription drug issues on the private equity side. There’s a lot of practices that private equity typically uses in the healthcare space that are extractive and damaging both to prices, quality, and sometimes the stability of the healthcare providers themselves. And we have to prohibit those kinds of high debt financing and other extractive practices that are often in place there.
Terry
55:50
Dr. Blumberg, did we miss anything that we should have asked you?
Dr. Linda Blumberg
55:54
No, I think we covered a lot. So, yeah, I think, you know, when people get their bills, they should always make sure that the names, the dates, you know, the insurance information is all correct. Sometimes that stops insurance companies from paying appropriately from like little minor like typo errors in addition to the kinds of things we talked about.
And everybody who has a health insurance policy by law has access to what’s called a summary of benefits and coverage or an SBC. This is part of the Affordable Care Act law. It’s an English-language summary of your benefits. And so I always suggest to people to have that in hand so you can make sure that when you get the bill that says this is what your insurance company pays, this is what you owe, that you’re clear that that is really what you owe.
So, for example, I had a situation where I was helping somebody and they had gone into the emergency room for urgent care that the doctor told them to go to the ER. And the hospital charged them $2,000 up front on a credit card when they walked in the door. Their summary of benefits and coverage very explicitly said that the only charge they should be charged when they walk into an emergency room for a real emergency is $200.
It took me about an hour and a half or two hours and maybe three or four different telephone calls to resolve that. But it was really clear from that summary of benefits and coverage that that person was overcharged. So, you know, knowing, being really on top of what your health insurance plan is supposed to cover and comparing that to what you’re being charged is a really important line of defense.
Joe
57:47
Dr. Blumberg, whenever we talk to healthcare professionals, they often complain these days. They complain that they have to see way too many patients in way too little time. They complain about the cost of their education, whether it’s a nursing school or pharmacy school or medical school, that it’s very expensive and that they had to go into debt. And then they complain about the whole fee structure and all the bureaucracy and all the time they have to spend sometimes arm wrestling insurance companies, and it’s not actually practicing medicine the way they would like to.
But at the same time, we hear that people earn rather extraordinary incomes. So a, for example, orthopedic surgeon is often making $500,000, $600,000, $800,000 a year. A family practice physician may be only making $150,000 to $200,000 a year.
How do the payments to healthcare professionals in this country compare to the healthcare professionals in, let’s just say, the UK or Germany or Sweden?
Dr. Linda Blumberg
59:20
We are paying our specialists in particular a lot more than are being paid in those other countries. I don’t have the statistics at hand on those specific salaries, but, you know, I’m not sure we’re paying our primary care physicians, you know, any more or not significantly more than they are paid in other countries. But, you know, those are at the highest levels, you know, as you said, the orthopedic surgeons, the interventional radiologists, the folks that are being paid for procedures at really high levels are paid much more than we see in other countries.
And I think my understanding is, and I’d have to look at this more carefully, but my understanding is that education in general, including education for medical professionals, is much more highly subsidized in most of these countries than we do here.
And so if you’re going to pay considerably less, then we also have to think about subsidizing the education for some more medical professionals than we do. And that should be part of the thinking if we’re going to put a lot of limits on what these providers can make.
Joe
01:00:38
And finally, our listeners learn from stories. And quite honestly, so do doctors. They call them case reports. But it makes the topic that we’re discussing come alive in ways that just talking in a more academic way [does not]. Have you had any experience over your career in which a patient or a family or some situation where the billing was so outrageous that it came to your attention and it was able to be modified?
You mentioned spending a couple of hours on the phone because the person was billed so much on their credit card when they entered the emergency department. Is there any other story you could share about billing that would be how I would describe it as helpful for our listeners to comprehend the scope of the problem?
Dr. Linda Blumberg
01:01:40
Well, you know, I am an academic researcher, right, and a policy researcher. And so I do not generally work as an advocate for patients. Every once in a while, a family member or a friend or somebody who sees a program that I’ve been speaking on will contact me and ask for help and I’ll do what I can. But that’s the most…
The situation with the $2,000 bill instead of the $200 bill is my most recent case of that. But, you know, the other thing that I’ve seen a lot in terms of what’s been in the media is stories of people who go in for an emergency room visit, and it’s a reasonably modest kind of situation. They’re not in there long. Maybe it’s for a child and they were worried, but it’s really not a big medical problem. And the intensity with which that bill is coded is way out of whack with the services that were provided because emergency room visits are coded by the intensity of the situation and the services needed.
And so those are situations where people can get bills in the huge range, tens of thousands of dollars for something that should have been a much more low-cost price. And seeing that and having to go back and appeal that is something that is becoming more common, I think, in emergency departments over time. So I don’t have a lot of individual stories where I have particularly intervened because that’s, you know, I’m a data and analytic person more than I am, you know, I’m not really a consumer advocate.
Terry
01:03:26
Dr. Linda Blumberg, thank you so much for talking with us on The People’s Pharmacy today.
Dr. Linda Blumberg
01:03:32
My pleasure. Thanks for having me on.
Terry
01:03:34
You’ve been listening to Dr. Linda Blumberg, research professor at Georgetown University’s McCourt School of Public Policy. She’s an expert on private health insurance, health care financing, and health system reform. Dr. Blumberg has provided technical assistance to states in their efforts to analyze and implement federal reforms. She’s also examined the implication of private equity companies’ movement into health care.
Joe
01:04:05
Lyn Siegel produced today’s show. Al Wodarski engineered. Dave Graedon edits our interviews. B.J. Leiderman composed our theme music.
Terry
01:04:14
This show is a co-production of North Carolina Public Radio, WUNC, with The People’s Pharmacy.
Joe
01:04:23
Today’s show is number 1,471. You can find it online at peoplespharmacy.com. That’s where you can share your comments about this episode. We’d love to hear your reports about hospital bills, interactions with the medical system. Please, you can reach us through email, radio at peoplespharmacy.com.
We’re also trying to enhance our YouTube channel with videos of our interviews. If you’d like to watch our interactions with guests you hear each week on The People’s Pharmacy, why not go to YouTube and search for People’s Pharmacy?
Terry
01:05:01
Our interviews are always available through your favorite podcast provider. You’ll find the podcast on our website on Monday morning. In this week’s podcast, we also discuss how easy it is for errors to creep into the bill, even through simple typos. The summary of benefits for the insurance coverage is a crucial document. It lays out exactly what the hospital can and can’t charge you for. One reason health care costs so much in the U.S. is the high cost of specialized medical professionals. How does compensation in other countries compare to what health care professionals make here? You’ll also hear about emergency room coding errors.
Joe
01:05:48
At peoplespharmacy.com, you could sign up for our free online newsletter to get the latest news about important health stories. When you subscribe, you also have regular access to information about our weekly podcast. We would be so grateful if you would write a review of The People’s Pharmacy and post it to the podcast platform you prefer. If you find our topics thought-provoking, please share them with friends and family. In Durham, North Carolina, I’m Joe Graedon.
Terry
01:06:18
And I’m Terry Graedon. Thank you for listening. Please join us again next week. Thank you for listening to The People’s Pharmacy Podcast. It’s an honor and a pleasure to bring you our award-winning program week in and week out. But producing and distributing this show as a free podcast takes time and costs money.
Joe
01:06:55
If you like what we do and you’d like to help us continue to produce high-quality, independent healthcare journalism, please consider chipping in.
Terry
01:07:04
All you have to do is go to peoplespharmacy.com/donate.
Joe
01:07:10
Whether it’s just one time or a monthly donation, you can be part of the team that makes this show possible. Thank you for your continued loyalty and support. We couldn’t make our show without you.
