Probing disparity in healthcare bills

Hospitals have no plans to collect from the consumer whose insurer does not pay the full bill, however.

"It would not work," says Wade. "The insurance industry has changed so much. People already feel saddled by co-pays and deductibles."

Others agree that differential pricing is just the way the system has to work. "People pay different prices for the same goods all the time," says Mr. Rubin, pointing to students who pay full tuition versus those on scholarship.

But some observers ask why those least able to afford healthcare wind up paying the most.

At the time of her surgery, Barton was making $23,000 a year as a writer for the city government. Today, she is still paying her surgeon's fee, in $10 or $20 installments, depending on what she can afford each month.

Aetna - whose earnings for 2002 totaled $450.3 million - would presumably have paid an estimated $6,000 of the $12,000 bill for the gallstone procedure. Such markdowns are not public information, but insurance charges are tied to Medicare, says Aetna spokeswoman Elizabeth Sell. (Medicare would have paid around $6,000 in 1995, says Timothy Greene, a senior analyst at the Medicare Payment Advisory Committee.)

Exact comparisons are tricky, because the cost of a given procedure depends on where service is rendered and whether complications arise. Regardless, big institutions spend between a third and a half of what private-pay patients pay for a service.

To date, the uninsured have not fought back in large numbers because few realize they are being overcharged, says Gail Shearer, director of health-policy analysis at Consumers Union. Hospital bills show only the official price, not what they might accept from an insurer.

Large healthcare bills affect individuals in several ways. According to one study, almost half of personal bankruptcies are the result of a medical problem. That, in turn, can severely limit individuals' healthcare options.

"We found that [medical] debt is a major barrier to receiving healthcare," says Catherine Dunham, who monitors access to healthcare for the uninsured for The Access Project, a community outreach program in Boston.

Sometimes the uninsured put themselves in potentially life-threatening situations to avoid medical debt, say advocates of the underinsured.

To help, some hospitals and doctors offer sliding scales, set up payment plans, and grant patients charity care. A few have even announced plans to charge the uninsured the same rate as managed-care patients. But such a move is not expected to become widespread.

"If hospitals were to offer individuals the same rate [they offer insurance firms or Medicare], it would only be a symbolic measure," says Wade. "The uninsured rarely pay their bills."

Hospitals often resort to collection agencies to see that patients - insured or not - do pay. Some put liens on homes.

Groups have emerged to help make certain such hard-sought money is legitimately owed. One company, Medical Billing Advocates of America, helps patients who believe they have been overcharged by hospitals. Of the 1,000 or so bills reviewed by Nora Johnson, who heads the firm's hospital billing department, only two have been free of errors or apparent padding - a $58 piece of gauze, for example.

Few patients know what their options are, and many end up paying full price because they believe there is no other choice.

Before being interviewed by the Monitor, Barton didn't know her health-insurance company would have paid significantly less for the same operation.

"A consumer's right to know is very limited in healthcare transactions," says Ms. Dunham. "You are just an individual lost in a nasty market environment."

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