Unethical Billing in Healthcare and Its Impact on Patients in the United States

In recent years, Americans have consistently felt the pervasive sting of inflation. However, touching nearly every aspect of daily life, its impact is nowhere more profound than in healthcare. Rising costs have not only strained household budgets but have also put necessary, life-saving medical services out of reach for many individuals and families. Access to healthcare has been redefined as a luxury, with very few fortunate enough to afford it. With millions of Americans carrying medical debt, understanding the importance of healthcare transparency in the United States has never been more critical. The medical debt that burdens families across the nation can be attributed to two primary factors: predatory billing and a lack of transparency.

Predatory billing is the unethical and exploitative billing practices that target vulnerable patients, often uninsured individuals belonging to lower-class or underserved communities (Consumer Financial Protection Bureau, 2022). Hospital bills will become littered with charges for services not received or grossly inflated for out-of-network patients. According to an article published by Cambridge University Press, patients are being forced into bankruptcy due to bills incurred from hospital visits lasting less than a full business week (Walsh, 2004). In 2000, a Californian patient filed for bankruptcy after accumulating $48,000 in medical bills for a 1.5-day, non-surgical stay at a for-profit hospital (Walsh, 2004). For-profit hospitals are owned by private entities, are often traded publicly on the stock market, and prioritize maximizing profit and generating revenue through investments and patient services (Zheng& Wiegand, n.d). Similarly, an uninsured woman from New York City was driven out of the city after receiving a $19,000 bill for a 2-day admittance for an appendectomy from a nonprofit teaching hospital (Walsh, 2004). Nonprofit hospitals are generally operated by charitable groups, such as community or religious organizations. These hospitals primarily rely on donations, grants, and tax exemptions (Zheng & Wiegand, n.d). In both cases, patients were faced with unjustly inflated medical bills and were targeted for their vulnerability. Hospitals will use intimidating tactics, such as wage garnishment, to get these large bills paid, and they often don’t back down until the patient has given everything they have. Predatory billing is an offense that nearly all hospitals, nonprofit and for-profit, are accountable for.

Lack of transparency in medical billing has also been a prevalent concern in recent years. The inconsistency and obscurities of modern healthcare have led to increased distrust in medical providers. In turn, patients and providers alike are suffering from the consequences. Patients and care teams increasingly struggle to predict medical costs as insurers shift more costs onto consumers through higher deductibles, co-pays, and coinsurance. Families are often left to bear unexpected financial burdens after receiving medical care. These discrepancies have created an environment where even those with health insurance can face devastating out-of-pocket expenses. “Surprise billing,” which is unexpected bills from out-of-network providers when a patient is treated at a facility not part of their health plan (Willis et al., 2023), has become a widespread concern among United States citizens. This financial strain can lead to delayed or foregone treatments, worsening health outcomes, and perpetuating a cycle of medical debt. Furthermore, the lack of standardized pricing across hospitals makes it nearly impossible for patients to anticipate or compare costs, compounding the confusion and vulnerability experienced during medical emergencies. As a result, the healthcare system continues to prioritize profit over patient well-being, exacerbating disparities in access and quality of care.

The prevalence of predatory billing practices and the lack of transparency that American citizens face have only deepened the financial strain on patients, particularly those already vulnerable. Without meaningful reform and greater accountability, the cycle of medical debt and inequitable care will continue to undermine the health and well-being of millions. Luckily,  lawmakers are taking action to combat these price-gouging behaviors. In December of 2020, a federal appeals court ruling declared that the Hospital Outpatient Prospective Payment System (0PPS) Policy Changes: Hospital Price Transparency Requirements could take effect on January 1, 2021 (Willis, 2023). This transparency rule commits the Department of Health and Human Services to increasing transparency in healthcare settings.  Addressing these systemic issues is critical to ensuring that healthcare in the United States is not a privilege reserved for the few but a right available to and attainable by all.

References

Consumer Financial Protection Bureau. (2022). Medical debt burden in the United States. https://www.consumerfinance.gov/about-us/blog/cfpb-report-highlights-concerns-around-medical-billing-and-collection-practices/

Walsh, R. S. (2004). Predatory Hospital Billing: Dynamic Cost Shifting to the  Uninsured. Cambridge Quarterly of Healthcare Ethics, 13(2), 200–206.  doi:10.1017/S0963180104132143    

Willis W, Chandra A, Sodani P.R. (2023). Issues and Challenges Pertaining to Financing in Providing Pricing Transparency in the American Health Care Industry. Journal of Health  Management. 2023;25(1):22-29. doi:10.1177/09720634231154367

Zheng, K., & Wiegand, B. (n.d.). For-profit hospitals vs. nonprofit: Key differences. IntelyCare. https://www.intelycare.com/facilities/resources/for-profit-hospitals-vs-nonprofit-key-differences/