Why healthcare price gouging will get worse before it gets better

Healthcare financial malfeasance sometimes flies under the radar. That appears to be the case with a remarkable report the Reuters wire service published last week regarding how victims of defective pelvic mesh products were getting victimized a second time--this time by medical financing companies.

Apparently millions of women have had defective implants. These meshes were typically implanted to treat urinary incontinence, but have led to intense pain and sexual organ damage instead. Those who sued for compensation would have the surgery paid for by a middleman firm, usually as the result of a referral from the patients' lawyer. That bill would then be sold to a medical finance firm such as MedStar. 

The result: The patient would wind up with a grossly inflated bill of as much as $62,000 to remove the mesh, even though the middleman usually paid around $2,500, and most commercial insurers reimbursed between $2,000 and $7,000 for such a procedure. MedStar would file a lien against the impending legal claim the patient had against the mesh manufacturer and distributor.

Such inflated charges and liens would also be made for other services, such as drugs related to the surgeries. In one instance, a patient was being charged interest rates of about 50 percent a year for their drugs--all applied against the settlement they could receive.

Given the typical legal settlement in one of these cases is about $40,000, patients could wind up not only never being compensated for their pain and suffering, but often left holding a hefty bill to correct the physical defect caused by the defective product. And when they had the mesh removed, their symptoms would sometimes get even worse.

Despite the horrifying assertions made in the Reuters story, it barely received any media attention. There has been no localized reporting by other media outlets, no promises from states' attorneys general for investigations. Perhaps I'm a little impatient, but if such a story doesn't catch on within a week of its publication, it never will.

The reasons why this happened--and why it has not captured public attention--are unpleasant to ponder.

Perhaps one of the biggest is that the victims in these cases were all women. I suspect if this involved penile implants, a much bigger ruckus would have been made. Apparently, a lot of these women also could not afford the removal surgery themselves. And Reuters' coverage has focused on women in Southern states such as Georgia, Alabama and Kentucky.

That all seems to have created the perfect storm: Poor Southern women trying to sue big corporations in order to regain some semblance of control over their reproductive organs. Not only an uphill battle, but one ripe for exploitation as well.

Unfortunately, this can be filed along with all the other "your money or your life" incidents that have been discussed here. They include the tales of Accretive Health strongarming patients just before they underwent surgery; Sean Recchi, whose family was hit up for $84,000 before MD Anderson in Houston would commence treating his cancer; and various hospitals in Kansas City refusing to accept the health insurance of automobile accident victims because they thought a bigger payday lay somewhere else--and then going after the patients when that didn't work out.

Price transparency would probably go a long way toward ending some of the horrifying gouging that goes on in healthcare delivery. If it was common knowledge that it cost $2,000 to have a pelvic mesh removed, a lot of women in these cases would have a much bigger foot to put down when they received their bills--and a lot more people who were also aware of the appropriate pricing to support them.

But given that even in Massachusetts--one of the first states to mandate healthcare price transparency--providers are dragging their feet when asked to cough up what their services costs, we are a long, long way from ever achieving that feat. Instead, expect to see a lot more cases like the pelvic mesh victims before you see a lot less of them. - Ron (@FierceHealth)

 

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