The Growing Burden of Medical Debt for Insured Americans
Health insurance, designed as a financial safeguard against illness and chronic conditions, presents a paradox in America: many insured individuals are burdened by substantial medical debt. This contradiction highlights systemic flaws in our healthcare system, where high out-of-pocket costs, aggressive debt collection by hospitals, and policy gaps create a crisis impacting financial stability, equitable healthcare access, economic mobility, and both financial and health disparities.
The Rising Tide of Medical Debt Among the Insured
Penelope Wingard's experience, a 58-year-old black woman from Charlotte, North Carolina, starkly illustrates the human cost of medical debt for the insured. After her breast cancer treatment in 2014, she faced a new challenge: escalating medical bills. Despite Medicaid coverage during treatment, she found herself uninsured and overwhelmed by costs for follow-up care. "My hair hadn’t even grown back from chemo, and I couldn’t see my oncologist," she recalls, underscoring the immediate financial burden of her illness.
Her financial woes deepened with subsequent medical issues, including an aneurysm and vision problems, leading to tens of thousands of dollars in debt. "It’s like you’re being punished for being sick," Wingard's experience reflects a broader trend affecting many insured Americans - not just the uninsured.
This trend is echoed in recent reporting by The Guardian, showing most hospital debt in the U.S. now involves insured patients, rather than uninsured patients, often due to high deductibles and unexpected out-of-pocket costs. The Kaiser Family Foundation’s 2023 Employer Health Benefits Survey further highlights it, noting a rise in high-deductible health plans, which, despite lower premiums, can lead to significant financial strain during medical emergencies. This change also represents employers selecting benefit designs that shift costs to employees or, more directly, a lower overall value of compensation packages.
Wingard's ordeal and these findings paint a concerning picture of U.S. healthcare, where insurance all too frequently fails to provide adequate financial protection, underscoring the need for a critical reevaluation of insurance structures and policies.
The Role of Hospitals and Aggressive Collection Practices
The medical debt crisis in the U.S. is worsened by many hospital systems, particularly so-called nonprofit hospitals, adopting aggressive debt collection tactics. A Nonprofit Quarterly article highlights that these hospitals, despite tax exemptions, often pursue lawsuits, wage garnishments, and home liens, exacerbating patients' financial woes.
The Human Rights Watch report, "In Sheep’s Clothing," reveals that about 60% of U.S. community hospitals are tax-exempt nonprofits, yet they spend significantly less on charity care than they receive in tax benefits, raising questions about their commitment to community service.
Additionally, the decline in charity care, vital for both uninsured and insured patients facing high out-of-pocket costs, is alarming. Hospitals' aggressive pursuit of unpaid bills, including legal actions and debt sales, seemingly contradicts their community-serving role and intensifies the medical debt crisis.
In response, legislative measures like New York State's Fair Medical Debt Reporting Act are emerging. This law, preventing hospitals from reporting unpaid medical debts to credit agencies, marks progress towards protecting patients and signals a shift towards more ethical debt management practices in healthcare.
Policy Gaps and the Need for Reform
The Affordable Care Act (ACA) and Medicaid Expansion stand as monumental efforts to increase coverage. Yet, the persistence of medical debt among the insured underscores a critical disconnect between policy intentions and real-world outcomes.
The ACA and Medicaid Expansion: Coverage vs. Cost
While the ACA and Medicaid Expansion have expanded healthcare access, they often fail to protect individuals from medical debt due to rising out-of-pocket costs. The Peterson-KFF Health System Tracker Brief indicates that the ACA’s maximum out-of-pocket limit is increasing faster than wages, burdening insured individuals with escalating healthcare expenses.
High-deductible health plans (HDHPs) exacerbate this affordability crisis. These plans, with lower premiums but higher initial costs, are increasingly common. The Kaiser Family Foundation’s 2023 Employer Health Benefits Survey shows a rise in HDHP enrollment, leading to significant debt for families as they pay more out-of-pocket before insurance coverage starts.
Coverage limitations under the ACA also contribute to this issue. Essential health benefits vary by state and plan, often leaving gaps in coverage for critical services like mental health or certain prescriptions. This variability, coupled with high deductibles, results in insured individuals facing substantial medical debt, contradicting the purpose of insurance.
Addressing this requires reevaluating health insurance structures and regulatory frameworks to balance affordable premiums with comprehensive, consistent coverage, reducing the risk of overwhelming medical debt for insured individuals.
Commonwealth Fund's 2023 Health Care Affordability Survey: Key Insights
The Commonwealth Fund's 2023 Health Care Affordability Survey reveals more than statistics; it highlights the real struggles of Americans with healthcare costs. The survey underscores the healthcare affordability crisis, showing that insurance doesn't always shield from financial burdens.
A major finding is the impact of high deductibles and copayments, which consume a significant part of many people's incomes, forcing tough choices like delaying medical care or incurring debt. Particularly affected are lower-income families, those with chronic conditions, and older adults, who often face a cycle of debt and deferred care, worsening health disparities.
The survey also points to a trend of underinsurance, especially in employer-sponsored plans with high deductibles, leaving many at financial risk. These insights call for urgent policy reforms to make healthcare truly affordable, focusing on reducing out-of-pocket costs, restructuring insurance plans, and enhancing subsidies for those in need.
State-Level Initiatives: Pioneering Change
States are at the forefront of combating medical debt with innovative solutions. The Commonwealth Fund State Protections report highlights diverse strategies to mitigate medical debt's impact.
Key initiatives include laws to limit aggressive hospital debt collection practices, crucial for protecting vulnerable groups like low-income families and those with chronic conditions. Some states have set legal boundaries on pursuing unpaid medical bills and capped interest rates on medical debt.
Expanding eligibility for charity care and financial assistance is another significant move. This broadening ensures more people, particularly those with limited resources, can access medical care without the fear of crippling debt, thereby improving community health outcomes.
States are also focusing on enhancing transparency in medical billing and insurance coverage, ensuring patients have clear information about service costs and their financial obligations. This clarity is essential for informed healthcare decisions and avoiding unexpected bills.
Furthermore, states are strengthening consumer protection laws to defend against unfair medical billing practices, holding providers and insurers accountable for billing errors and offering patients better dispute resolution options.
These state-level actions, varying in scope but united in purpose, demonstrate encouraging progress toward a more equitable healthcare system. They address not only the symptoms of medical debt but also several of the root causes, paving the way for broader healthcare reforms. These initiatives, alongside federal efforts, are shaping a future where healthcare affordability is accessible to all, not a privilege for a few. State governments' role in this fight is pivotal, with their policies and programs serving as models for national reform and effective strategies to alleviate medical debt.
Federal Actions: A Unified Approach with Enhanced Consumer Protection
Federally, initiatives like the White House Convening on Medical Debt and the Consumer Financial Protection Bureau's (CFPB) plan are key in combating medical debt. These efforts merge federal oversight with state innovation, addressing medical debt's complexities.
The White House Convening united federal and state policymakers, healthcare experts, and advocates to strategize on reducing medical debt and improving healthcare policies. This meeting was pivotal for sharing insights and identifying best practices for nationwide implementation, recognizing medical debt as a multifaceted issue.
Additionally, the CFPB's plan, noted in a National Consumer Law Center (NCLC) announcement, marks a significant move towards consumer protection. It proposes prohibiting medical debts from being reported on credit reports, a major relief for those burdened by medical debt. This initiative is widely supported by consumer groups and reflects an understanding of the disproportionate impact of medical debt on financial stability.
The collaboration of federal agencies like the Department of Health and Human Services, the CFPB, and the Centers for Medicare & Medicaid Services is crucial in formulating effective healthcare policies. Their joint efforts are expected to lead to comprehensive strategies that significantly alleviate the burden of medical debt.
This federal approach, emphasizing interagency cooperation and stakeholder engagement, is helping to create policies and practices that effectively reduce medical debt, integrating federal oversight with state-level innovation and consumer protection measures like the CFPB's plan. This integrated strategy is essential for relieving American families of medical debt and advancing towards a more equitable healthcare system.
The Blind Spot: Medical Credit Cards
Despite the good intentions of these proposals, a “blind spot” persists and more and more hospital systems are taking advantage of it by pressuring patients to agree to take on “medical credit” debt, prior to providing services - even in emergency departments. The most popular of these programs is known as “Care Credit” and the American public assumed some $23 billion in medical credit card debt across- more than 11 million users from 2018 through 2020. Unlike traditional medical debt, these medical credit programs accrue interest and do not qualify for financial assistance or charity care. They result in as much if not more damage to patient-consumer credit reports as traditional medical debt.
Once primarily limited to dental costs, which are not a required covered benefit for adults, the company that owns Care Credit says it believes patients typically generate this debt through “elective procedures”. However, patients urged to accept credit based medical debt in an emergency room or when facing cancer care or even in seeking dental care for an infected tooth may not feel these procedures are “elective” and the financial institution is not necessarily going to operate with the same definitions the general public would. Indeed, it does not serve Synchony’s interests to do so. In fact, Synchrony partners with multiple provider associations and as of 2023 with at least 17 hospital systems or about 300 hospitals but, when interviewed, refused to provide details because those agreements likely include “sponsorships” or what would otherwise be called a kick back scheme. That scheme structure is very likely prohibited by federal law protecting patients of public health programs like Medicare from providers and their affiliates that would take advantage of needy or elderly patients.
Once assumed as a means of paying for medical care, medical credit card debt reports just like traditional credit card debt and patient-consumers are no longer protected from those specific protections policymakers are considering now.
Conclusion and Call to Action
It's evident that this crisis is not just financial but a moral and systemic failure. The experiences of individuals like Penelope Wingard and findings from the Commonwealth Fund's 2023 Health Care Affordability Survey underscore the need for compassionate healthcare reform.
Policymakers, healthcare providers, patient advocates, and citizens must unite to address this crisis's root causes and reshape our healthcare system.
For Policymakers:
Implement policies that go beyond expanding coverage to ensure affordability and accessibility.
Reassess high-deductible health plans and their impact on families.
Mandate comprehensive coverage in health plans, including closing the essential benefits loophole and ensuring network parity for services like mental health and chronic disease management.
Enforce regulations ensuring hospitals commit to community-serving mandates, particularly in providing sufficient levels of charity care to justify nonprofit status. This can be implemented on both the state and federal levels.
For Healthcare Providers and Institutions:
Prioritize ethical patient care over financial gains.
Establish transparent billing practices and expand charity care programs.
Collaborate with community organizations to identify and support vulnerable patients.
Train staff in empathy and patient advocacy, focusing on the human aspect of healthcare.
For Patient Advocates and Community Members:
Support legislation that protects patients from aggressive debt collection and unfair billing.
Educate communities about their rights and resources regarding medical debt.
Partner with local health systems to develop patient-centered care models.
For All Stakeholders:
Collaborate to create a healthcare system that balances efficiency with empathy, justice, and accessibility.
Strive to make medical debt a rarity, ensuring healthcare access for all, regardless of insurance status.
Remember the human element in healthcare.
We possess the knowledge and resources to drive change. Let's collectively push for policies that safeguard the vulnerable and work towards a healthcare system where access is a right, not a privilege. The time to act is now and it is past time that our state and federal policymakers evaluate their allegiance to hospitals systems abusing government programs, the dollars that support those programs, and the patients those dollars are meant to benefit.
340B Hypocrisy: The Inconvenient Truth Behind Why We Need to Reform This Vital Safety Net Program
Brandon Macsata is the CEO of ADAP Advocacy. Jen Laws is the CEO of Community Access National Network.
The 340B Drug Pricing Program (“340B”) is probably one of the most transformative public health programs providing lifesaving supports and services to people living with HIV in the United States, second only to the Ryan White HIV/AIDS Program (“RWHAP”). As such, rigorous debate about the future of the program is not only healthy, but it is also paramount to its success. As patients (and patient advocates), it is our responsibility to demand accountability, transparency, and stability. There is universal agreement about the vital role 340B plays in improving access to healthcare. But for many – including ADAP Advocacy and the Community Access National Network – we contend that the program could be doing more…and better! The focus of the program should be on the patients, and not the Covered Entities, medical or service providers, or any other business enterprises making lots of money off it. That is the inconvenient truth behind why we need to reform this vital safety net program.
Section 340B of the Public Health Service Act (PHSA) is a Drug Pricing Program established by the Veterans Health Care Act of 1992. That year, Congress struck a deal with pharmaceutical manufacturers to expand access to care and medication for more patients; if pharmaceutical manufacturers wanted to be included in Medicaid’s coverage, then they’d have to offer their products to outpatient entities serving low-income patients at a discount. The idea was brilliantly simple. Drug manufacturers could have a guaranteed income from participation in the Medicaid program and Covered Entities could have guaranteed access to discounted medications. Congress set-up a payment system by way of rebates and discounts affording certain healthcare providers a way to fund much needed care to patients who could not otherwise afford it.
“…to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” H.R. Rep. No. 102-384(II), at 12 (1992)
THAT is the legislative intent behind 340B. THAT is where some of us want to return 340B’s focus. THAT is why reform is coming!
Ironically, critics of the 340B reform movement – often motivated by self-preservation and protecting their ever-expanding budget and geographic footprint – are quick to attack the idea of the need for reforms. Sadly, they’re also quick to turn their criticism into personal attacks, including questioning the intentions, morals, and character of the people supporting reform. They charge, using Inspector Clouseau “gotcha” style rhetoric, that we’re in the “pockets” of the drug manufacturers because we accept their money to help with our patient advocacy and education (yet there is no “gotcha”, since this information is quite publicly available on our websites, annual tax returns, Guidestar, as well as frequent public commentary).
Isn’t it funny how the “gotcha” mentality cannot accept the obvious, that maybe our interests align with the drug manufacturers because it is in the best interest of patients. Drug manufacturers make products patients want and need. Ensuring funding flows in a way that expands patient access to medications does indeed benefit both patients and the drug manufacturers. It should be noted, this criticism tends to also neglect mentioning the interests of the entities challenging reform: anti-competitive consolidation among hospitals and pharmacies (leaving whole areas without services), increasing profits, paying for salaries unrelated to healthcare, and increasing administrative salaries are all excellent examples of why we’re left asking “Who is actually benefiting from this program?”
The truth of the matter is, aside from a growing list of patients, patient advocacy organizations, and drug manufacturers, there is a growing chorus calling for reform. Academia wants it (NEJM, Penn LDI, USC Schaeffer), economists want it (Nikpay, Gracia), national trade associations want it (NACHC, NTU), policy think tanks want it (CMPI, NAN), and even multiple news media outlets are suggesting it (Forbes, NYT, WSJ). Local activists are also increasingly fed-up with what they’re witnessing (Dinkins, Feldman, Winstead).
Dr. Diane Nugent, Founder & Medical Director of the Center for Inherited Blood Disorders, recently noted an opinion piece in the Times of San Diego, “A September 2022 analysis by the Community Oncology Alliance revealed that some hospitals participating in 340B price leading oncology medications nearly five times more than the price they paid. Another study found that hospital systems charge an average of 86% more than private clinics for cancer drug infusions.”
But speaking of deep pockets, isn’t it also an inconvenient truth that the very folks fighting reform, and fighting improving the program so patients can benefit more directly from it, are the same folks financed by big hospital systems, and mega service providers abusing 340B intent?
A question often asked by advocates learning about 340B: “So, exactly how much money are we talking about here?”
Well, we don’t really know…sort of. For Federal Grantees covered under 340B, their grant contracts require accounting of 340B rebates as part of their programmatic revenues. Those revenues are required to be re-invested in the program, which generated the income. This level of transparency is pretty much a “gold standard” that other Covered Entities (less maybe hemophiliac centers) in the 340B space are required to meet. That’s part of why we, and other advocates, are calling on minimum reporting requirements for hospitals, contract pharmacies, and pharmacy benefit managers (insurers covering medications) to begin providing some data. Clearing up the murkiness, if you will. What we do know is drug manufacturers reported more than $100 BILLION in 340B-related sales last year.
That’s concerning especially because “charity care” is declining and medical debt is a growing issue for more and more patients and their families. The Affordable Care Act mandated “charity care”, or “financial assistance”, to be offered by non-profit hospitals seeking to qualify as 340B entities but did not place any definitions behind the mandate, including any “floor” of how much charity care a hospital has to offer.
Now, in all rhetoric opposing any type of transparency in 340B, hospitals tend to conflate their “uncompensated care” and “unreimbursed care” or “off-sets” for public health programs – these don’t necessarily reflect any “charity” being provided to patients. These things should be separated when considering what benefit hospitals provide a community. And under that lens, things get kind of ugly with far too many of the 340B hospitals reporting providing less than 1% of their operating costs as charity. When reviewing how much hospitals write off in bad debt, or going after patients who can’t afford care, often far exceeding those charity care levels, we’re left asking if the “non-profit” designation is really a declaration of concentrating “profits” by way of salaries to top executives rather than formal shareholders?
That bad debt shows up for patients as medical debt. And we need to be very specific here: according to the Urban Institute, some 72% of patients with medical debt owe some or all of that debt to hospitals. Meaning, what we call medical debt is really hospital debt. The situation is unarguably bad. This year alone the Los Angeles County Office of Public Health issued a report outlining for policymakers the role and responsibility hospitals have in driving medical debt and how increasing charity care might stem this problem.
As patients, and frankly as patient advocates who represent thousands like us, medical debt isn’t an issue that can be swept under the carpet. Entire communities avoid necessary care to protect their financial interests. We’ve personally watched our friends open GoFundMe accounts to cover medical expenses. We’ve helped our loved one’s cover food and light bills to not miss a medical bill. We also well recognize how negative credit reporting from medical debt can hurt people from getting rental housing or a car loan, or even simple necessities. And when thinking about how much we don’t know about what’s behind that $100 billion price tag, the fact that patients face these concerns on the regular is pretty obscene.
We do know there are plenty of good actors in the 340B space. Particularly, Federal Grantee Covered Entities, like Ryan White Clinics and AIDS Drug Assistance Programs (ADAPs). And we know they’re generally great actors because of that transparency in reporting and the oversight offered by their grant contracts. Ultimately, we’re not necessarily asking for a whole lot more than that for literally everyone else who stands to make a buck in the chain between drug manufacturers and patients. Indeed, that trust on Federal Grantees, particularly Ryan White Clinics and ADAPs, is part of why drug manufacturers restricting 340B sales held a carve out for these Federal Grantees. (To be fair and without much public fanfare, years ago, we – as in ADAP Advocacy and CANN – helped to negotiate these carve-outs as part of our advocacy. Our relationship with drug manufacturers isn’t a one-way street as detractors might try and sell you on.
$100 billion is a lot of money! Is it too much to ask, “Why aren’t patients benefiting more directly from this ever-growing healthcare program?” Facts show that 340B revenues are soaring year after year, yet against the grim backdrop of consistently declining charity care in the impoverished communities needing the most help. To make matters worse, rising medical debt is crushing families. Patients deserve better. People living with HIV who depend on the RWHAP and 340B deserve better! And that is why we need reform.
Read our policy reform suggestions here.
The Necessity of Patient-Centered 340B Reform
On the issue of any health policy discussion, many, powerful stakeholders are inserting their priorities and interests, working to be the “most favored” entity group in any final outcome. For the Affordable Care Act (ACA), some fights were seen between providers that asserted some feigned “moral” objection to any given type of care, others included insurance companies fighting to get a bigger piece of the subsidy pie or establishing themselves as “managed care organizations” to take over management of Medicaid programs. To this day, Judge Reed O’Connor has ruled on the ACA more than any other federal judge outside of the Supreme Court. But repeatedly, despite the political stump speeches and the claims of high ethical priorities from other stakeholders, actual patients do not tend to dominate in terms of who benefits most when health policies are enacted or when reforms are needed. The 340B Drug Discount Program is no different. In fact, serving the intent of the program is at the center of the patient-centered reform movement.
Often these fights happen without sufficient focus on how they impact patients. Providers, particularly provider administrators, and payers (public and private) are well-funded enough to out-shout patients and then claim some paternalistic insight as to what will “really” benefit patients. Having someone speak for us is not where we end up being the “winning” stakeholder. It’s part of why patient self-determination is at the core of The Denver Principles. And, again, 340B is no different in this regard.
Bad actors in this space continue to tout prioritizing patients while doing…not that.
For a recent example in a long line of examples, Allina Health System was routinely denying care to patients, despite being designated a “non-profit” health organization. Indeed, in that specific health system, not only were patients denied care for having a balance or struggling with paying medical bills, as evidenced by the system’s less than half of one percent charity care rate indicates patients weren’t being made aware of the system’s own financial assistance policy even when facing collections.
Collections…
Hospital-related collections are the driving factor for health-related GoFundMe and other, similar crowd sourcing, mutual aid sites. A pregnancy complication. A non-life-threatening injury, like a broken arm or a potentially terminal one, like a cancer diagnosis. Regardless of the particular causes, patients needing care and not being able to afford it is the throne in the side of millions of Americans. Medical debt touches more families than even student debt, with one estimate showing at least 11 million owing more than $2,000 in medical debt and at least 3 million owing more than $10,000. And unlike student loans, medical care is an absolute necessity of life.
We need to be clear, some 75% of adults with medical debt owe that debt to hospitals. It isn’t “mom and pop” providers (though hospitals are buying them out at an alarming rate) or your local community clinic. The vast majority of “medical debt” is really just hospital debt. And that medical debt – it’s not evenly distributed. An Urban Institute analysis from 2022 found Black Americans experienced medical debt at a higher rate and higher amount than their white peers. But looking at Bon Secours, an entity that took these vital dollars from Black communities and reinvested them in wealthier, whiter communities, we can’t be terribly surprised to see this data on debt and predatory practices are tinged with racist impact.
We’ll gently remind our readers that equity-minded persons and entities prioritize “impact over intent” is a very real thing.
These things are so sufficiently related that the Los Angeles County Department of Public Health issued a report suggesting the most efficient way to handle the medical debt crisis was for hospitals and mega-providers to pony up and actually meet their charitable service obligations. Meeting those charitable missions thereby reduces medical debt, addresses at least one aspect driving health disparities (financial toxicity), and ensures those program revenues are being geographically oriented to serve the most medically marginalized populations in this country. That includes incentives to address hospital and pharmacy deserts, whereby the experience of patient communities has been pilfering followed by abandonment.
Here’s a simple fact: reforming 340B to better meet the intent of the program does not pose a threat to those entities already meaningfully serving the intent of the program – serving patient needs.
Equity in Access: Hospital Price Transparency, Medical Debt, and 340B
As part of Community Access National Network’s (CANN) 2021 blog series, A Patient’s Guide to 340B, we published a piece detailing how the decline in charity care impacts patients after seeing a provider with a particular focus on practices around debt collection and medical debt. Since then, the Biden Administration issued a directive through federal agencies for credit reporting agencies to stop reporting medical debt on consumer credit reports. The idea was an effort to reduce the impact of medical debt in other areas of patients’ lives, like securing housing or employment. Emergencies and even routine care, say a pregnancy, can after all affect a person’s financial status for years after the fact and with the ballooning nature of medical debt affecting millions of Americans, something needed to be done to better protect patients. The Affordable Care Act (ACA), in general, sought to address the financial concerns of patients, particularly with regard to avoiding necessary care for fear of the financial repercussions. These moves by President Obama’s Democratic successor were relatively predictable.
The three largest credit reporting companies, Experian, Equifax, and TransUnion, agreed in 2022 to implement these rules…sorta.
The details of those agreements and how hospitals navigate “bad debt”, or when a patient can’t afford a bill, are stickier than the rules can address without legislation. Hospitals have their own internal teams to pressure patients to pay something, even when it comes at the expense of food on their tables or paying rent, and even when those same patients are entitled to financial assistance or charity care and shouldn’t be paying anything. But once that effort fails, hospitals and other medical providers can and do “charge off” those bad debts to credit collection companies and those claims can and will continue to show up on consumer credit reports. Advocates have been pushing the Internal Revenues Service (IRS) and other agencies to do more to protect patients and consumers. All of that is part of why Representative Tlaib (D – Michigan) has introduced a bill to prohibit medically necessary care from arriving on a patient’s credit report, among other rules and limitations on how providers, credit collectors, and credit reporting entities handle medical debt.
The proposed bill, however, does not address hospital practices in running credit reports in order for patients to qualify for financial assistance – which can result in a “ding” on a patient’s credit file.
Among other efforts to reduce costs related to medical care, the Biden Administration also implemented hospital and insurer price transparency rules, with the idea that transparency might drive down costs and encourage competition regarding common medical procedures. However, there is no central database of these services hosted by the government, rather these services are posted…somewhere on hospital websites. The problem is hospitals and insurers are really, really good at abusing process and not meeting the actual intent behind these efforts. The advocacy organization Patient Rights Advocate has recently released its analysis of hospital compliance with these rules and it’s not pretty. The Centers for Medicare and Medicaid Services (CMS) hasn’t issued rules for standardizing price data and the files for these data aren’t required to be presented in a consumer-friendly fashion. Further, these rules are required to provide the list and negotiated prices relevant to a consumer and do not address considerations like rebates or their impact on accessing care, nor are these lists required to provide information on how different charity care designs might help reduce the financial burden of these services.
So other than keeping our friends in advocacy and government well-employed by analyzing thousands of lines of data, these tools are proving to be of limited use for the average consumer. And none of that addresses what happens in emergency situations, where “choice” doesn’t exist – like when you need an ambulance or when there’s one or two hospital systems in a geographic area. All the price transparency in the world won’t address consolidation in providers.
Furthermore, a lack of transparency in 340B revenues for hospitals also means a lack of transparency as to how those dollars might be used to mitigate these consumer costs and potential harms when a patient can’t pay. Similarly, with hospitals and insurers pointing fingers at labor and pharmaceutical costs as to what’s driving a crisis of unaffordable care, transparency on actual costs to provide care and treatment would allow for a more meaningful analysis of who’s really in it for the money versus serving the health needs of patients and communities.
For their part, the American Hospital Association fought the transparency rules in court and lost. Their central argument in response to the loss was that these transparency rules took away from serving patients during the height of the COVID-19 pandemics strains on hospitals – but providers don’t crunch these data, administrative personnel do.
Rules standardizing patient cost data presentation, prohibitions on utilizing 340B revenues for consolidation, and anti-competitive practices would certainly be useful for ensuring patients feel secure in accessing care they need and protecting patients from predatory practices. And that security is critically important for patients and for addressing issues around health disparities.
The reality of the matter is providers do deserve to be paid for their work and commitment to their communities and no patient is going to meaningfully argue against that. But when patients find themselves avoiding necessary care because they’re trying to save or qualify for a home or dig themselves out of debt, that’s just plain bad for those patients, their families, their dependents and care givers, the economy, and, frankly, our trust in both government and providers. Health disparities cannot be meaningfully addressed across this country without addressing the financial incentives and disincentives that drive access to care, whether it be the rural hospital crisis or medical debt.
Increasing transparency is an excellent start. Advocates and policymakers should consider to continue to explore ways to protect patient trust by way of accountability in programs and payment processes which are supposed to be about protecting patients as consumers and increasing access to care.