Before the spread of health insurance, patients were charged according to what they were expected to pay. This technically meant the rich could be charged more than the poor. The widespread health insurance however has led to standardization of the charges for those who can afford to be covered (Tompkins, Altman, & Eilat, 2006). For those who cannot afford to take medical care covers, the sliding scale persists. However, the current scale used is reversed and therefore perverse – patients who can afford the least are charged the most.
The practice of different pricing for the insured and uninsured is unfair and discriminatory. For the patients who are covered, insurers take the role of negotiating for the medical services offered to their clients. It is assumed that hospitals and doctors make up for the lost ground from such bargains by charging highly those who are not covered. According to Reinhardt (2006), what insurers pays to hospital is about 40 percent of the listed charges such that for the uninsured patients they get to pay to full price which then makes it more by 2.5 times than the one paid by insured patients. Hall and Schneider (2008) argued that Medicare rules that encourage billing non-Medicare patients full list prices have encouraged this discriminatory pricing. They also added that higher prices offer the chance of hospitals claiming more credit for free care. In a study by Ginsburg (2007), it has been shown that discriminative pricing is equally practiced at physician pricing levels. In the study it was shown that physicians may charge up to 79 percent more for uninsured than insured patients. This practice is simply unfortunate because it redirects medical care from its objective of providing healthcare to a practice of reaping cash.
In the long run, unfair pricing violates the basic principle of medical practice as it leads to personal bankruptcies therefore significantly affecting the quality of life victims can lead. A good fraction of the uninsured is usually the poor and when exorbitant prices are charged for services they receive, it is more likely they may fail to pay the services. In such events, hospitals make use of debt collection agencies which make use of all the legal options available include home foreclosures and bankruptcies (Serfert & Rukavina, 2006). For the poor who cannot afford insurance covers, the situation is worsened by the declining numbers of physicians willing to offer discounted care (Cunningham & May, 2006). The poor are cornered in a very vulnerable position as they cannot afford to be insured, the possibility of receiving discounted care is diminished and the only way out is the pay costly. Unfortunately when they go for this option and fail to pay their debts, their homes are taken away and they are declared bankrupt.
The discriminatory pricing definitely will make patients consult healthcare providers when they think it is very necessary. It would also make the patients buy drugs or go for more supplies or medical checkup when they have money or when they think it is necessary. Such decisions should only be made by a physician and not the patient. The patient has no competence in deciding on when to see a physicians, when to take drugs and when not to. In such a scenario therefore a treatment plan is likely to be compromised and clearly this will lead to greater complications which the patient may not afford to manage.
Cognizant of the fact, from economic perspective, that an insurer may provide the advantage of economies of scale because of the large volume of clients involved, it has been argued insured patients should be charged less than those who are uninsured. However, taking into consideration that the price for the unprotected patients is often doubled and other times tripled or even quadrupled (Gerard, 2007), this can only be referred to as price-gouging. It is a classical case of unethical commercial exploitation.
As recognition of the unfairness of the high prices charged on uninsured patients by hospitals some states have intervened through legislation. The state of California with close to 7 million uninsured enacted the fair pricing legislation in 2006 to protect the uninsured. This legislation requires hospitals not to charge the uninsured the full billed charges. A survey by Glenn and Katya (2013) showed that up to 97 percent of the hospitals in California offered free care to the uninsured whose income was below 100 percent of the federal poverty level.
In conclusion, it is clear that charging the uninsured higher than the insured is unfair and unethical. The prices are often ridiculous high compared to those paid by the insured such that the practice is often more of robbing the patients. This practice is harmful to the uninsured as most of them are not well off financially and therefore cannot afford the high prices charged. They often default in payment and this lands them at cross roads with debt collection agencies who in turn drain all their finances, take away their homes and ensure they are labeled bankrupt. This leaves the uninsured in very vulnerable positions. Because of these consequences, the uninsured may opt not to seek medical assistance and opt for self diagnosis and use of over the counter drugs. Charging excessively high prices for services rendered to the uninsured therefore leads to more harm than good – it does uphold the principle first do no harm.
References
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Glenn, M & Katya, F. (2013). Fair Pricing Law Prompts Most California
Hospitals To Adopt Policies To Protect Uninsured Patients From High Charges. Health Affairs, 32(6), 1101-1108.
Hall, M.A. & Schneider, C.E.
(2008). Learning from the Legal History of Billing for Medical Fees. J Gen Intern Med., 23(8), 1257-1260.
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