Back in the mid-1990s, I wrote a profile of a company that performed services as a "public adjuster." The concept was straightforward: If your insured home or business was damaged by a fire or other kind of calamity, this company would act as an intermediary on your behalf, using employees who knew all the ins-and-outs of property insurance claims adjustment. The presumption was that you would have enough leverage to actually receive a fair settlement--one that would make you whole again.
The public adjuster received 10 percent of the entire payment from the insurer. The presumption was its presence increased payouts by at least that much.
After Covered California, the insurance exchange that will operate in my home state, released its benefit plan structure last week, I began to think that public adjusters for health plan enrollees might be a good way to proceed in the post-ACA world.
The health plans that will be offered through Covered California--and, by extension, exchanges throughout the country--are fairly generous. And in Covered California's case, a concerted effort was also made to protect the tens of thousands of people in households earning no more than $35,000 a year from having to pay too much for primary care visits. A primary care co-payment is capped at $4, and an emergency room visit at $25.
Nevertheless, the out-of-pocket costs for these plans remain pretty high. A family could wind up facing hospital bills approaching $13,000 should they experience a catastrophic health event. Ken Wood, a Covered California senior advisor, acknowledged at a press conference last week that this "was a lot of money--but having a family's exposure limited to this is a breakthrough." He expected it to curb the number of medical bankruptcies.
I'm not so sure about that. If your household only earns $25,000 or $30,000 a year, you're one or two paychecks from calamity. Being slapped with a bill for half your annual pay could still lead to bankruptcy, and presumably leave hospitals and other providers holding the bag for a lot of the cost of care.
Hospitals still have the option for providing charity care for near-poor but insured patients such as these and many of them will extend that generosity (although many moderate income patients aren't savvy enough to ask for it in the first place).
But that doesn't address the fact that acute care providers relentlessly inflate their prices when negotiating with commercial insurers to make up for shortfalls from their Medicaid and Medicare patients. A patient who has to pay $6,000 or $7,000 on their bill may have ultimately owed just a few hundred dollars if they were enrolled in Medicare, or nothing at all if they're in Medicaid--even if their income is almost within Medicaid-qualifying territory.
Having the healthcare equivalent of a public adjuster on the side of the patient to whittle that bill down to perhaps $800 or $900 would serve a double benefit. It would not only decrease the financial burden for someone who could ill afford to pay a five-figure sum, but drive a little more price transparency into the chargemasters of hospitals that lead to a $7 tab or more for a single Tylenol tablet.
And those hospitals would actually get some money out of such a transaction, rather than a writeoff.
There are some public adjusters out in the healthcare realm--they are mostly referred to as patient advocates. But they have little in the way of formal training or certification, and they charge most patients by the hour rather than agree to a percentage of a negotiated bill--a business model that is not going to attract a lot of customers. It may be time for some of the institutions of higher learning in our country to start creating some formal training programs for this profession. It would be of benefit to both patients and hospitals. - Ron (@FierceHealth)
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