Your Rx For Hospital Sticker Shock

The swelling prices in health care suggest the need for more than just having insurance in order lower your health bill. Yet the typical person faces an uphill battle to learning the health care finance game.

Miami, FL February 5, 2005 -- Wheeled into the operating room poked, prodded, and x-rayed you are on pins and needles. This experience will be like nothing else not because of all the battery of tests you have been through but for the rude awakening that your hospital bill feels like it will hurt you more than your illness.

'That's hospital sticker shock,' says Garth Gibson. An MBA graduate in hospital finance he's spent the last ten years managing hospital billing and contracts for large hospitals and hmos.

He says it is wishful thinking to believe that your bulging bills are due to billing errors and greedy executives. That is a myth encouraged by big business auditing companies says Garth.

He sites the often quoted Equifax study that found the average billing error amounted to $1,300. What they don't tell you is this amounts to less than 5% of the total bill said Garth.

If you really want to know what's going on with your medical bills you should first start with understanding how your bill is put together in the first place.

Your medical sticker price is calculated from a price list assembled every year for everything from nail clippers to transplant surgery. This price list varies from hospital to hospital. Experts say there are many factors for the differences.

The following is a summary of three of the biggest factors:
- Modern Equipment. Some hospitals have newer equipment. If so then you are probably paying for it with higher prices. Hospitals pay nearly a million dollars for modern day CAT Scans and nearly $25,000 for new defibrillators. Considering that just 100 years ago most diagnostic medicine consisted of Petri dishes and microscopes you can see why costs are higher today
- Charity Care. Some hospitals treat more people who can't pay their hospital than others. In fact a few have the sole purpose of treating people without regard to how the patient will pay for it. If you are thinking how do organizations make money from people with no money well the answer is they don't
- Cost Shifting. Is the name given to the act of jacking up the prices on hospital items in order to cover the costs of non-paying customers. This is the reason why you may see on your bill charges for $300 dollar walkers and $850 dollar drills.

Hospitals used to be reluctant to talk about this cost shift but as more and more people end up paying their bill instead of their company or insurer individuals are asking hospitals to account for every penny.

Hikes in medical bills threaten the stability of many families. Recent research by the Schools of Law and Medicine at Harvard University confirms families are at financial risk even with medical insurance. Across the country families are asking how can they protect themselves.

'Go to B.E.D.' says Garth.

BED stands for:
Benefit. Asks for a Summary Plan Benefit Description (SPD) from your health plan
Educate. Read your SPD to learn what your plan will or will not pay for
Document. Go through the appeals process. The burden of proof is on the plan to explain why they are not paying for something. This gives everyone a chance that the plan will erase any medical expenses that you are currently paying on.

Start with this if you want sleep better at night says Garth. For the uninsured he advises they obtain an estimated hospital bill before they are hospitalized then try to negotiate a better deal upfront.

'That way you avoid hospital sticker shock.'

If you would like more right and wrong ways to cutting your hospital bill help is available. Call 305-788-6756 to receive your free booklet, "Your Rx For Hospital Sticker Shock:Tips, Tricks, Traps"

About Garth Gibson
Garth Gibson has an MBA from the University Of Connecticut. He has ten years of experience in medical finance working for some of the largest hospitals and health plans in the US. A former Naval Officer he received a special award for innovative hospital management while in the armed services.

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