Efforts by employer groups to establish caps on medical procedures and identify quality providers may get a boost from data derived from Medicare and other data bases by a patient advocacy group. The data reveal vast differences in billings for similar procedures, and uncovered major overbilling trends — exactly the kinds of situations employers are attempting to control.
The advocacy group NerdWallet released its findings based upon three areas of research: analyzing federal data from the Centers for Medicaid and Medicare; consulting the Association of Credit and Collections Professionals; and commissioning a Harris Poll that gathered input from 2,000 consumers on health care spending.
The latest report represents a follow up of sorts of a study launched by NerdWallet last year, when it released findings that "nearly 60 percent of all personal bankruptcies in the United States are caused by medical debt."
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The latest study dove deeper into the causes of this debt. Among the findings:
- U.S. households lost $2,300 in median income between 2010 and 2013 while their health-care expenses increased by $1,814.
- Medical debt is the largest category of consumer debt in collections, with 20 percent of U.S. adults likely to be contacted by a debt collection agency about medical debt in 2014.
- 63 percent of U.S. adults surveyed have received medical bills that cost more than they expected.
- Data from across all Medicare Compliance Reviews of U.S. hospitals conducted by the Office of the Inspector General in 2013 revealed "rampant billing errors led to an average medical bill overcharge of 26 percent."
- For the same inpatient treatment, "one hospital can charge more than 50 times as much as another hospital. Furthermore, for the 100 most frequent inpatient procedures covered by Medicare, there is an average of 25 times difference between lowest and highest charges."
- 73 percent of adults say if they knew the cost of medical care before receiving a treatment, they could make better health decisions.
"The system Americans trust for their medical care is not very trustworthy when it comes to providing price transparency for procedures and error-free billing," said Christina LaMontagne, author of the study and General Manager of NerdWallet Health. "Many Americans think they are getting the best care in the world, and yet the American household is more indebted to the medical system than ever before."
NerdWallet cited one nationally recognized medical bill expert, Pat Palmer, as a supporter of its findings.
"In my 20 years of medical bill advocacy work, our organization has saved clients over $100 million. Most of that money was saved after identifying errors and overcharges on hospital billings and improper insurance reimbursements. Over 80 percent of the medical bills clients send to us have errors. Our clients feel overwhelmed by the cost of health care. Why is our system so complicated that regaining health means losing financial well-being?" asked Palmer, founder of Medical Bill Advocates of America.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
