ER docs, hospitals fleecing patients

Abstain from doing harm.

That’s the foundational principle of the Hippocratic Oath that every physician takes. But many emergency department doctors, and the administrators of the hospitals where they work, don’t seem to mind wringing every possible penny out of their patients during their most desperate moment.

If compounding a patient’s financial troubles doesn’t qualify as doing harm, I don’t know what does.

My colleague Jenny Deam revealed in a front page story Sunday how large physicians’ groups avoid accepting insurance so they can charge two to three times more for their services in emergency departments. Hospital administrators, who contract out emergency department staffing, know these doctors don’t accept the same insurance they do, but they allow those doctors to run the ED anyway.

These simple facts betray the reputation that emergency doctors are heroic, ingenious lifesavers and reveal them as highly skilled price-gougers. Emergency physicians make on average $339,000 a year, according to a 2017 Medscape survey of doctors.

Of course, doctors and their trade associations are very good at claiming they are the victims of miserly insurance companies, but as Deam shows, the facts don’t bear that out.

In Texas, 48 percent of overall claims from emergency room physicians were outside the networks of the state’s three largest insurers, Blue Cross and Blue Shield of Texas, Aetna and UnitedHealthcare, according to internal claims data compiled by the Texas Association of Health Plans, the state’s insurance trade association.

In other medical disciplines, 89 percent of doctors are within an insurance network. While patients have time to research in-network doctors for a normal appointment, in an emergency, most patients only know which hospital is in their network. They don’t have an easy way to make sure the ED doctors who work there are in-network, and some ED physician groups take advantage.

It wasn’t always this way, and it doesn’t have to be. Most emergency doctors were in the same networks as the hospital until one physicians’ group, Dallas-based EmCare, took over at 16 hospitals. That’s when patients began receiving demands to pay the balance of their bill that the insurance company considered excessive.

“It literally looked like a light switch was turned on,” Zack Cooper, a Yale professor, told Deam. The rate of out-of-network billing went “virtually from zero to nearly 100 percent within a year when Em-Care got a contract.”

The study’s findings indicate “a deliberate strategy to increase revenue since out-of-network payment rates are significantly higher than in-network rates,” Cooper added.

EmCare called Cooper’s study misleading and promised to join more networks so fewer of their claims will produce balance bills. EmCare also insisted the problem was with insurance companies refusing to pay a fair reimbursement rate.

Insurance companies deny their rates are unfair.

Aetna’s market president for Texas, Mike Nelson, said his company, too, will “actively work with providers on contracts that are reasonable to both parties.” He added, though, “there are some providers who choose to stay out of all networks to take advantage of (nonparticipating) billing rules.”

Out-of-network emergency departments are hugely profitable. That’s why hospitals have billboards along major highways that advertise the current waiting time in their EDs. It’s why standalone emergency rooms have opened in strip malls across the state. Emergency medicine generates huge bills and high margins, as long as doctors don’t agree to insurance company rates.

There’s an African proverb that says when two elephants fight, it’s the grass that suffers. And that’s exactly what’s happening to patients. Fundamental to this problem is that no one, neither doctors nor insurance companies, really knows the true cost of a service; pricing is relatively arbitrary.

What we do know is that Americans spend twice as much per capita on health care than people living in other developed countries. Both health care providers and insurance companies are realizing excessive profits, and every year they are driving up costs at more than twice the rate of inflation.

The Affordable Care Act bent that cost-curve slightly, but not enough. The act tried to reduce costs by encouraging doctors to move away from fee-for-service, but many doctors resist. The act limited the profits and administrative costs at insurance companies, but they found loopholes.

State lawmakers passed a law requiring doctors and insurance companies to mediate balance bills. But unlike other states, Texas exempts most medical bills from mediation and it only helps a few people in limited circumstances.

As patients, we recognize there are no heroes in our for-profit health care system. We aren’t as healthy as people who have universal, single-payer health care, and we pay much more for lower quality care. And both doctors and insurance companies use us as human shields against each other.

This is not a healthy system, and both doctors and insurers should head the Biblical instruction to heal thyself, or else patients will demand change they may not like.

Chris Tomlinson is the Chronicle’s business columnist. His commentary appears on Sundays and Wednesdays. He also posts a daily news analysis at HoustonChronicle.com/ Boardroom. chris.tomlinson@chron.com twitter.com/cltomlinson