Hospital ER ad underscores heathcare finance's woeful informational problems


I've discussed the demands for price transparency a lot in this space and I believe it will be one of the defining issues of healthcare finance for many years to come. But what about informational transparency?

That issue piqued my attention last weekend while streaming highlights of the Dodgers/Diamondbacks games in Australia. I first had to watch an advertisement from hospital operator Dignity Health for its emergency room (ER) scheduling service.

The ad features a woman who is first sitting in what is presumably a hospital waiting room, then cuts to her sitting in the comfort of her home (or perhaps the showroom at her local Ikea). She beams when a dog joins her on the couch. Although she is holding a compress to her left ankle in both shots, she has a vague grin and does not appear to be in any pain or discomfort at all.

Although Dignity has created a waiting service for both its urgent care and ER services, the ad touts the ER service only. It's not the first hospital operator to launch a system for scheduling an actual urgent care or ER appointment. However, I can't think of a single provider that touts the former over the latter.

Unfortunately, that choice makes grim fiscal sense. Dignity and other hospital operators all charge much higher rates for patients who seek care through the ER. And given that the non-profit Dignity's tax returns report reveals Chief Executive Officer Lloyd Dean earned on average $5.3 million a year between 2009 and 2011--not counting the tens of thousands of dollars more spent on his first class air travel and club memberships--the organization presumably needs that extra cash flow.

However, it makes little sense to the pocketbook of someone who is so lightly injured that she can relax at home (or at Ikea), to actually use the ER. If a person has insurance, he or she faces co-payments of $250 or more to walk through the hospital's door, likely double what it would cost to use urgent care. And if the patient is uninsured, he or she could face financial ruin.

Dignity spokesperson Lauren Davis got back to me by email late Monday, and said that the ER and urgent care options are being "marketed equally." She added that Dignity "(educates) patients about when to access the emergency department versus urgent care (as) part of our larger community outreach work." 

Yet the ad does not convey an iota of such information.

Even if Dignity never launched this commercial, the American public is already woefully misinformed about their healthcare options. There are a number of reasons for this. First, they generally aren't curious.Most people don't pay attention to anything but soundbites from their television screens, which is why partisan and spoon-fed options like Fox News and MSNBC abound. And despite being political polar opposites, in my opinion neither of those networks dispense helpful information about the Affordable Care Act (ACA). And it's mind boggling just how many articles appear in print publications about how the ACA is a failure just five months into its formal rollout. 

Kaiser Health News, which publishes a helpful consumer column about the ACA, recently answered the question of a 60-something patient who has $200,000 in hospital bills for repairing an aortic aneurysm. "I have not enrolled in Obamacare, mainly because of the website issues and security concerns," the person wrote.

As Steven Brill reported in his recent Time magazine cover story, the government resolved most of the website issues by the end of November, nearly five months ago, and within 60 days of the's troublesome launch. The article states Republican opponents of the healthcare reform law conjured up security issues as a scare tactic to discourage people from using the insurance exchanges--which apparently worked in this case.

Even if the person's identity was stolen during the process of purchasing coverage, that seems a lot less scary than having to decide whether to spend his or her retirement years in bankruptcy or paying off a massive debt.

Kaiser Health News' Michelle Andrews diligently went about trying to answer the patient's question about obtaining retroactive coverage, but did not mention how disinformation played to that person's extraordinary disadvantage.

Meanwhile, a hospital and its medical staff is almost certainly left holding the bag on a six-figure medical bill because of a misinformed consumer.

There are millions of Americans who benefited from the ACA, including, for the sake of disclosure, my own household. Our $750-a-month premium with Blue Shield of California was cut more than $400 by switching to a Kaiser plan purchased on the Covered California insurance exchange.

But getting such stories onto the airwaves or into print is arduous at best.

Michael Hiltzik, the Los Angeles Times business columnist who is arguably one of the most passionate advocates for the ACA in print journalism, noted that problem just the other day. He discussed the story of Rita Rizzo. She's a 60-year-old Ohioan whose husband Lou, a diabetic, had gone without health insurance for a decade. Rita had been paying $650 a month for coverage for herself, with a $6,000 deductible. Another $5,000 a year was going into a health savings account to cover her husband's medications.

Now, for $379 a month, the Rizzos have a policy with a $2,000 deductible that covers both of them.

But when Rizzo tries to take her story online to media outlets, she told Hiltzik that she received responses like she was "a media plant or an Obama plant" or told outright "you're not a real person."

In other words, it's a lot easier for the American public to learn how to get to the hospital ER as conveniently as possible than finding out whether the ACA can actually help them.

For the sake of the American public and for healthcare finance in general, this needs to change.

I'm going to suggest that Dean pull those ER ads. Instead, he should take the money budgeted to broadcast them--along with $1 million out of his own deeply lined pockets--to launch a new campaign touting the benefits of the ACA. These new advertisements should include personal stories from the Rizzos and other households about how the law restored some financial stability and personal certainty to their lives.

This would actually benefit Dignity and other hospital operators in the long run, because it may prompt many more people to obtain health insurance. Which means if they show up at an ER, they will actually have a way to pay their bills--and not just the piper.--Ron (@FierceHealth)

Editor's Note: An updated version of this article includes an official response from Dignity Health.