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By Josh Gottlieb
President, Brotherhood of Amalgamated Trades Local 514
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It is clear that our health care system needs a lot of work. The average American faces the looming threat of financial ruin in the event of illness or a serious accident. And hospital billing is a huge factor in the rising cost of employer-sponsored health plans.
A major contributor to exorbitant healthcare costs is a practice called hospital "dishonest billing," whereby hospitals buy up independent physician practices to charge patients higher, hospital prices for routine physician services provided in non-hospital settings. Hospitals do this because they can charge patients up to three times the amount for care delivered in a hospital setting than care delivered outside of the hospital campus. One woman who experienced dishonest hospital billing saw her medical bill jump from $30 to $354 after a hospital acquired her doctor's office.
This loophole is driving provider consolidation as well, which has been proven to boost costs, narrow access, and hurt care quality. In fact, for the first time, a majority of physicians now work for a hospital or a practice that they do not own themselves.
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All of this is contributing toward out-of-control hospital spending. A recent RAND Hospital Price Transparency Study found that in New York, employers and their employees are paying far more than the national average for hospital services—in fact, they are paying more than 300 percent of what Medicare would pay for the same services. This means that if a hospital bills Medicare $1,000 for a given medical procedure, an employer would be billed more than $3,000 for that same procedure, a cost that is ultimately shared by the employer and employee based on the terms of their health plan.
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It's no wonder that the average cost of an employer-sponsored single coverage plan in New York is higher than in any other state by about 18 percent, at nearly $9,000 a year.
It seems obvious: Patients visiting a doctor's office shouldn't be charged for a hospital visit. Yet, hospitals do it routinely. A patient seeing the same provider for the same services for years could suddenly see their bill increase exponentially, sometimes by as much as ten times the amount, if that provider is bought out by a corporate hospital system.
Hospital costs in New York City and the rest of the state are sky high and rising each year. According to federal data for 2020, the most recent year available, the state's per capita hospital spending was 43 percent above the national norm, up from 22 percent a decade earlier. An analysis by Peterson-KFF for that same year found that hospitals represented nearly a third of all health spending in 2022. This is simply not sustainable.
As New York's representatives at both the state and federal level consider ways to lower healthcare costs for the hardworking Americans Local Union 514 represents, banning dishonest billing is a great place to start.
Congress can lower healthcare costs for small business employers and American consumers. I urge them to take up H.R. 3417, the Facilitating Accountability in Reimbursements (FAIR) Act, a bipartisan bill to eliminate hospitals systems' ability to dishonestly bill for care provided outside of a traditional hospital setting.
Josh Gottlieb is the Presiden of Local Union 514 and the Brotherhood of Amalgamated Trades (B.A.T.).
The views expressed in this article are the writer's own.
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