Emergency medicine, insurance companies, and patients currently exist in what I see as a standoff. The tension between the three parties will remain ever present until an outside force, likely governmental, comes in to resolve the conflict. However, why are each of these parties pointing fingers at one another in the first place? The principle reason is that while we all pretend that American health care functions as a market, like many other goods and services in the United States, emergency care certainly does not conform to market principles like Lasik surgery or joint replacements do.
When someone is having a heart attack, they do not have time to comparison shop. When a patient checks into the emergency department, the clinicians cannot determine in advance if the “customer” is willing and able to pay for the services provided. When you throw third-party payers into the mix, you wind up either with price controls (eg, Medicare and Medicaid) or out-of-network billing (for private insurers) wherever it isn’t prohibited. Arguably, the patients are most protected financially in the former situation, least in the latter. Providers, on the other hand, face the opposite financial risks.
Although emergency departments are taking a beating in the media over their billing practices, out-of-network billing is probably less common now than it was just a decade ago.1,2 For many reasons, including the increasing prevalence of high-deductible coverage, patients are finally becoming cost-conscious. The questions that no one seems to be able to answer: What is a fair price in an imperfect market? Should emergency services be a multiple of the Medicare price? Should it be the usual and customary physician charge or a function of the in-network payment agreed to by providers willing to accept the insurer’s reimbursement?
In a marketplace where EMTALA can effectively drive private insurance rates down to zero and where “your money or your life” allows physicians and hospitals to set charges infinitely high, it is imperative that states and/or the federal government establish an actual database where everyone—physicians, insurers, and patients—can see both the charges and the actual reimbursement rates so that a fair price for emergency services can be determined.
Cameron Gettel, MD, in a recent EMRA+PolicyRx Health Policy Journal Club article, articulates why this is high stakes for emergency physicians: “Transparency in how insurance companies provide fair coverage for their beneficiaries and calculate payments to providers is greatly needed as the present one-sided media perspective has misled the public by placing blame solely on physicians.”2 This month’s EMRA+PolicyRx Health Policy Journal Club article anticipates that without a standard for how much health care services should cost, our work will inevitably be compared to Medicare prices.