Writing in the Wall Street Journal, Joel Stein explains how to not pay your medical bills. The article, written tongue-in-cheek, is amusing but also touches on a serious topic. About a year ago Stein went to a dermatologist to have a mole removed and a pathology report for skin cancer. Mr. Stein reports that a year after the procedure a pathology bill arrived in the mail for about $605. DermTech is a company that makes adhesive stickers that are placed on a mole or skin lesion, peeled off and the RNA/DNA examined for skin cancer. You (and your insurance company) are basically paying for a pathology report from examining a strong adhesive sticker.
Mr. Stein is no stranger to the dysfunction of the U.S. health care system. In no other industry would prices be opaque or hidden and a year later you get a bill in the mail for a service you never knew about prior. He explains medical prices are mostly arbitrary, bearing little resemblance to costs or supply and demand. As he states so eloquently, numbers are just made up. He explains:
The American healthcare system is not the only marketplace with made-up numbers. There are also Middle Eastern bazaars, used car lots and Pentagon budgets. And wherever there are made-up numbers, you can bargain.
I have shopped at the Grand Bazaar in Istanbul and American medical practices would even make Turkish vendors blush. In health care there is not one price, but many prices – a different price for each customer. There is the chargemaster (list) price, that is totally made up. Then there are negotiated discounts off list prices for each third-party payer that are functions of made up numbers. Then there is the cash price before the service, which can sometimes be negotiated and there is the cash price after the service, that is often the list price unless you argue. Then there is the negotiated price after the fact when the service provider is worried they will not get paid. This is the one Mr. Stein is discussing. In Stein’s case, the original price was $1,485. The insurance negotiated discount portion was $880. The balance owed was $605. Again, the only real logic to these prices is what DermTech thought they could extract from health plans. When Stein contacted DermTech to explain he planned to write about his experience:
[Chief Medical Officer Loren] Clarke was more upset about my bill than I was, and not because I had screwed him out of $884.80. “The billing team doesn’t want to take people’s money. They want the patients’ insurance to pay for it.
As I’ve said at least a million times, the U.S. health care system is predicated on price gouging employer plans and insurers, and patients as a last resort.
Back to the story. A lot of people don’t pay their medical bills. Doctors will tell you that it’s like pulling teeth sometimes to collect substantial copays for patients. At the time of his bill, DermTech was in bankruptcy. That is an indication that not everyone (including insurance companies) is happy with $1,485 cancer stickers. Stein explained his negotiating technique:
I called the number on the bill. I used a friendly voice to tell the friendly woman on the phone that I’d like to pay my bill right now, but I’d like to pay a lot less. I did not tell the woman that the bill was unfair or that I didn’t have the money or that a year is a long time to wait to charge someone for a sticker. I simply offered to pay less.
She immediately offered me a “20% prompt payment discount.” Which would reduce my $604.80 bill to $947.84. This seemed like the kind of faulty math that would explain DermTech’s Chapter 11 problems.
The DermTech customer service representative indicated there was yet another cancer sticker bill soon to arrive in the mail, again from a year earlier. Stein offered $200 for both tests and the company called back later and agreed to accept $300 to settle the entire $1,185 bill. The deal wasn’t bad, all things considered. However, not everyone knows they should bargain. They shouldn’t have to.
I too went to a dermatologist several years ago to have a discolored lump surgically removed from my left shoulder blade. Being uninsured at the time, my initial visit was $85 in cash. The doctor asked about other skin problems and examined eczema at no extra charge. He wrote me a prescription for steroid cream and his staff scheduled surgery for a month later. The price of my surgery was quoted in advance. It was something like $571 and included a pathology report and a follow-up to remove stitches. My dermatologist is 37 miles away through some of the worst, most congested Dallas traffic. No big deal. I will gladly suffer through traffic to see a friendly doctor with reasonable prices, rather than a stick & peel pathology report billed a year later at $1,485.
Read more at: How to Not Pay Your Medical Bills – WSJ