Kimberly Barton was 23 years old when she began a battle with stomach cramps. A diner hostess, she had no health insurance, and decided to ignore her problem.
Months later, after landing a job with the Dallas city government, Ms. Barton went to a public hospital and was diagnosed as having gallstones. But she put off treatment again, because her Aetna health insurance plan had yet to kick in.
Then one evening in August 1995 - a week before her coverage was to take effect - she couldn't sleep. Barely able to move, Barton had her roommate drive her to a hospital emergency room. She was operated on hours later.
The hospital bill came to $12,000 - Barton finally paid it off last year with another $5,000 in interest. Had her insurance been in effect, Aetna would likely have settled the bill for about half what she was originally charged.
In a climate where the number of uninsured Americans is growing and hospital fees continue to soar, the disparity between what individuals pay versus what insurance companies pay for the same service is coming under some scrutiny.
"No one paid attention to it until now," says Bruce Vladeck, an expert in health policy at Mt. Sinai Hospital in New York, and administrator of the Health Care Financing Administration under President Clinton. "Not only are there a lot more people uninsured today, there are a lot more middle-class people who are uninsured."
Hospitals are required to put official "list prices" on all services provided. But only uninsured individuals end up paying the full bill, since big insurers routinely bargain their prices down.
"The price for private-pay patients is higher because they have no negotiating power," says Jeffrey Rubin, an economics professor at Rutgers University who has studied healthcare delivery to the uninsured.
The "buying power" that insurance companies have is a "market reality," says James Walsh, senior editor of Silver Lake Publishing in Los Angeles, which publishes consumer guides to insurance.
But consumer groups complain that in a hospital setting, the list price is well over the cost to hospitals of providing the care.
List prices have been in effect since the onset of the government-run insurance program, Medicare, in 1965, says Irene Wielawski, a health writer who has detailed the evolution of the pricing system.
Hospitals established these prices to determine what percentage the government would pay for services. It did not take long for providers to inflate those prices to receive more money, Ms. Wielawski says.
Today, official charges are at least 20 percent above the actual cost of care, says Rick Wade, senior vice president of the American Hospital Association (AHA). Some charge double or triple the cost, depending largely on a state's regulatory policies. Maryland is strictly regulated, for example. California is not.
After Carmen Espinoza was injured in a head-on collision in Sacramento, Calif., in 2000, her bill came to more than $140,000. The drug counselor and young grandmother had no insurance at the time. She applied for welfare, was denied, and spent the next four months stressed over how she would pay off the debt.
Finally, a hospital social worker found a loophole in the welfare system, which made her eligible for Medi-Cal, the state's Medicaid program.
Mr. Wade says the pricing strategy helps hospitals survive. According to the AHA, hospitals nationwide lost $21.5 billion in uncompensated care in 2001, representing 5.6 percent of their total expenses. Hospitals also grumble about decreasing reimbursements from Medicare, Medicaid, and health-insurance companies.
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."