I am a health policy scholar who became a patient last year, when I needed a surgical repair to a heart valve. My two identities united the day after my operation, when a congenial woman from the admissions department came to discuss my insurance with me.
Her intent was to make sure I understood my forthcoming medical bill. Put more starkly, she wanted to remove any surprises from a forthcoming surprise bill, which typically occur when patients get caught between their insurer and their provider. Surprise bills have become the scourge of U.S. health care, and despite many promises, policymakers have remained mostly feckless at stopping them. New accounts now report that surprise bills have even hit people seeking care for COVID-19.
The timing of my admissions department representative was quite poor — I was still in the ICU, had multiple tubes piercing my neck and torso, and hadn't slept much of the night — but her visit was revealing. One awkward but central dynamic in the issuance of surprise bills, and one of the reasons a solution has been so evasive, is that their shame lies not just in the inflated amounts they demand. Their true outrage is in their disrespect for patient autonomy.
The stress of surprise bills
The chief complaint concerning surprise bills is that they demand amounts that far exceed what any reasonably informed person would pay. They cause real financial pain and target unsuspecting patients moments after they required medical care.
Surprise bills have also become widespread. One recent study reported that as many as 20% of elective surgeries at in-network hospitals produce surprise bills. The average amounts of those bills far exceed what 40% of patients could pay with their available savings. Another study just reported that average surprise bills rose 81% just from 2014 to 2017.
Congress has wrangled over proposed solutions to surprise bills, and it appears that the leading candidate for reform will be to be institute arbitration proceedings. The logic is that arbitrating financial disputes between payers and providers will protect the patient from billing confusion.
But there's a problem with arbitration. It still allows providers to extract prices that exceed market rates. By definition, a surprise bill reflects a strategy of subterfuge; a physician provides a service at a price that no informed payer would ever agree to if given the choice. In no other industry can someone provide a service and then demand a price that far exceeds what others charge. If arbitration generates compromises between the reasonable prices to which an insurer agrees and the inflated "surprise" price, health care costs will go up for everyone.
Imagine an auto mechanic replacing your tires and billing you US$500 per tire after completing the work. When you remark that everyone else sells the same tires for $80 each, should the mechanic be entitled to arbitration to resolve your disagreement? As a general matter, the law says no. To the contrary, if the auto mechanic did not state the price in advance, the law requires you to pay no more than the market price that everyone pays. Arbitration is just a backdoor strategy to extract unearned money from patients and insurers.
It's not just about bills
Lost in the political debate is that the real injury from surprise bills is their capitalizing upon a patient's vulnerability. Patients need to trust their providers, and that makes them uniquely exposed to exploitative financial practices.
Unlike nearly every other aspect of the economy, health care prices are overwhelmingly hidden from patients. Medicine is fastidious about patients providing informed consent before receiving care, but there is little to no commitment to ensuring that patients can give informed consent to prices. This prevents patients from making fully informed decisions about their health care, and it removes much-needed price competition from health care markets. More important, it denies individuals their autonomy as informed patients and consumers.
I felt this lack of personal agency well before the woman from the admissions department visited me in the ICU. Preceding my surgery, I wandered hospital hallways in a patient gurney, feeling exposed and layered with unwanted sympathy. Only a few weeks before, I walked these same hallways as a faculty member who lectured to physicians and staff. Like all other patients, I lost part of myself when I submitted to my physician's care. Though this might be a necessary consequence of modern medicine, it also invites nefarious conduct. Surprise billing is despicable precisely because it capitalizes on our vulnerability as patients.
American medicine will continue to fail — it will continue to cost unsustainable amounts without nurturing a healthy population — if it continues to deny patients their agency as willing and informed partners in their care. All of us deserve protection from surprise bills, and all of us deserve protection from arbitration processes that will inflate health care costs. But most critically, we deserve to enjoy the autonomy as patients that we have in other parts of our lives.