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March 23, 2010 6:51 PM   Subscribe

Explain the US healthcare system to me (an Australian) in easy-to-understand language.

As an Australian I have never quite got a grasp on how the whole private/public health system here works (feel free to outline that too!). I mean, if a doctor is working in a private hospital, how is it that some taxes go to that hospital when there is also private health insurance and people just paying a flat fee? And some doctors have privvate practices in public hospitals? Anyway, with all this talk of the US health system I'd like to understand how that system works.

Although there has been plenty of internerd discussion about Obama's changes I have not come across a succinct outline of how the system actually works; where the money comes from and goes to. I also know that healthcare has been a benefit provided with many jobs and that is about all I know.

Could someone please explain how this has worked and how it will work in the future, or point me in the direction of a suitable online explanation?
posted by micklaw to Health & Fitness (29 answers total) 7 users marked this as a favorite
 
Wikipedia has a decent article.

To answer your specific questions:

if a doctor is working in a private hospital, how is it that some taxes go to that hospital when there is also private health insurance and people just paying a flat fee?

Many private hospitals in the US accept patients who are beneficiaries of Medicare (a program for the elderly and disabled) and Medicaid (a program for the poor). So, some of the patients will pay the hospital / doctor out of pocket (e.g., the uninsured), some will be paid for by their private insurance, and some will be paid for by the government. There are, however, some hospitals and practices which are completely private and do not accept Medicare or Medicaid.

And some doctors have private practices in public hospitals?

In many of those cases, the doctor is really just renting space in the hospital building. But remember: private practice doesn't necessarily mean that the doctor won't accept Medicare or Medicaid.
posted by jedicus at 7:00 PM on March 23, 2010


I have not come across a succinct outline of how the system actually works

I don't think it's snarky to say "that's because there isn't one." A system, that is.

According to T.R. Reid, a Taiwanese politician who was part of the study group that came up with its healthcare reforms looked at the US for an example, but came back with this judgement: "American health care is not really a system at all. It's a market." Timothy Noah's review of Reid's book at Slate, while attempting to summarise Reid's overview of the world's healthcare systems to Americans, is a good starting point for those outside the US trying to make sense of what the country has instead of a healthcare system.
posted by holgate at 7:06 PM on March 23, 2010 [3 favorites]


"American health care is not really a system at all. It's a market."

Yup. And damned be anyone who tries to make it anything but.

The great and damning thing about the USA is that it's almost impossible to do anything that's not market-based (outside of niche markets.) If you were serious about universal coverage, you'd do a UK, or at the very least a German, model. But that will never fly here. So we get needless middlemen who effectively levy private taxes. Fraked up thing is that it's still an improvement. Unless you don't want to deal with the government in order to get your rebate.

(And I'm a rock-ribbed Reagan Republican from back in the day, so this isn't some partisan sputtering.)
posted by ChurchHatesTucker at 7:22 PM on March 23, 2010


Basically one's employer has an agreement with one of a handful of providers. Your employer pays a certain amount of your insurance costs (this varies a ton.) You can also get your spouse and kids covered, but usually the company won't contribute to that.

Then (usually) you choose your GP (PCP) from a list. If you need to see a specialist, you need to get your GP to refer you.

In terms of payment, your doctor's office tries to bill your insurance company first (and every procedure is only covered to a certain amount.) Then a few weeks later you get a bill for the rest. You can sometimes try to fight the charges. Most people don't because it is not fun. Most plans also have a 'co-pay' that you have to pay upon each visit. They range from $10-30.

With prescriptions it works the same way but faster. The pharmacy is given your insurance number, they look you up and see that your company will only cover $34 of your Prozac, so you need to pay the rest before you get the pills.

Why this sucks:
- your employer picks the company. It might suck.
- if you quit, you're SOL.
- your doctor may not be 'in-network' at a different company so you may need to switch or pay more.
posted by k8t at 7:31 PM on March 23, 2010 [1 favorite]


I'll explain my little bit of it. I receive health insurance through my husband's employer, as part of his compensation package. We are offered a choice of three plans (HMO, traditional PPO, and high-deductible PPO; it's not super-important to understand the different to understand how the system works). We use the high-deductible PPO. A portion of the premiums is deducted from his paycheck each month (about 1/3 of them); the remaining 2/3 is paid by his employer. The total comes to around $22,000/year in premiums, which is fairly high, but I live in a state where insurance is fairly expensive, and our plan is pretty comprehensive. (If I had the HMO, my premiums would be lower but I'd have less coverage; with the traditional PPO they'd be higher and I'd have the same coverage but a lower deductible.)

The first $1500 I spend on health care for me, I pay myself (that's my high deductible). I go to any doctor who accepts my insurance (which is most of them locally, because my coverage is very comprehensive). When I arrive at the doctor's office, I present them with my insurance card. They enter the information and verify it. They treat me, and then they bill my insurer. My insurer sends me a statement, sends the doctor's office a statement and a check, and then the doctor's office sends me a bill for whatever the insurance company doesn't cover. Up to the first $1500 I spend on me personally, the insurance company sends the doctor NO money and I get a bill for the entire visit. After I've spent $1500 "out of pocket," my insurance company pays for typically 80% of my costs and I pay 20% (this is called a "co-pay.")

There are some arcane rules about how each person's spending adds up towards a $3,000 family deductible, but once I hit $3,000 for my entire family in any combination, 80% of everything is covered and I pay 20%. After my family has spent $6,000 out of pocket for the year (the initial $3,000 and the 20% co-pay for the next $3,000, which is $15,000 in services that the insurer pays 80% of), we are 100% covered for everything. (There is a yearly ceiling but it's like $1 million or something.)

All of my preventative care is covered, which includes a yearly physical for my husband and me both; a yearly pelvic exam for me; and all recommended vaccinations for everyone in the family (the insurer uses the state list for children and has its own lists for adults). I can go to a walk-in clinic at a drug store and get a $25 flu shot over the counter paying cash, submit my paperwork to my insurer, and they'll send ME a $25 check.

Plans are structured in different ways, but this is the basic idea for those who receive employer-provided health insurance as 60% of Americans do: You pay some portion of the premiums, your employer pays some portion of the premiums (if you're very lucky, your employer may pay your full premium!). You have a deductible, and you cover all costs up to that deductible. Beyond that, your pay a percentage of costs (20% is common but other numbers occur), and the insurer pays a percentage, and once you pass a certain number, everything is covered. There is often (but not always) a ceiling on how much you can cost the insurance company per year, which may be very high, but may be very low (like $100,000).

There is a great deal of paperwork, and a great deal of fine print about what is and is not covered. Some plans let you go anywhere you want; others restrict what doctors and systems you can use. Insurers negotiate with various doctors and hospitals to get lower rates for their insured members, so there may be "preferred providers" who cost less and "out of network providers" who cost more. You may be allowed to go "out of network" but have to pay a higher percentage of the cost. There is a toll-free number on the back of your insurance card that you call when you don't understand your plan. I have a law degree, and my husband actually does health insurance litigation, and we probably call four times a year to figure things out we can't understand from our contract. My plan has generous coverage and good customer care, I can't complain about that, but I do end up calling four times a year to figure out what the hell I'm going to be paying if I go to the ER with my broken tailbone vs. going to the urgent care clinic.

I'm not unhappy with my personal coverage, but approximately 30% of my healthcare dollars go to pay for administration and advertising and corporate profits and paperwork. I don't know of a single-payer system where that's above 5%. I'd be a lot happier if I payed the amount I currently pay for health insurance in taxes instead, that 30% didn't go to paperwork but only 5%, and we had socialized care ... the extra 25% could cover an awful lot of "uninsured" who presumably wouldn't then take minor conditions to the ER because they have no access to primary care providers but the ER has to treat anyone who walks in, which is paid for out of my tax dollars anyway, and costs a lot more that way.
posted by Eyebrows McGee at 7:33 PM on March 23, 2010 [8 favorites]


Most working Americans receive employer-based health insurance. This means that their employer shops multiple health insurance companies and buys a benefits package based on budget and services offered. Some health insurance packages will cover dental care and eye care, and some won't.

Typically, employees pay for a portion of their insurance and the employer covers the rest of the cost. I've had as much as $140 out of my two-week's pay taken out towards my insurance, and as little as $10, depending on the job. If the employee is covering his/her spouse or whole family through the plan, the deduction from his/her paycheck is likely to be much higher.

Then, when the insured people seek out care they typically have a "co-pay," maybe $10 or $20, that they pay at the time of the appointment. The doctor's office bills the insurance the rest.

Doctors negotiate how much they will charge for each service with each insurance company, so there is no standard across-the-bard rate. The amount Aetna pays may for a physical exam may be considerably different than the amount BlueCross BlueShield pays for the same exam.

Not every doctor has negotiated rates with every insurance company.

Depending on your health insurance plan, you may have to pay the full cost of seeing a doctor not in your plan. You may just have to pay a higher co-pay. Or it may be somewhere in between -- perhaps you pay 20 percent of the cost of the visit, for example. It is extremely variable.

When you are on a health insurance plan, you can generally go to any hospital during a time of extreme emergency and know that your insurance company will pay most of your costs, regardless of whether the hospital is part of your plan. Depending on the plan, however, you may still have a $500 or $1,000 co-pay.

Complicating matters, there's a parallel insurance world called HMOs, which stands for Health Maintenance Organizations, which are insurance companies and health care providers in one. When your employer-based insurance plan is through an HMO, you generally have to go to a clinic or hospital run by the insurance company, except in an extreme emergency.

Many health insurance plans have maximum annual or lifetime payouts. That means that if you obtain more care than is allowed under the plan, your insurer will no longer cover your health costs. So people who become very sick can lose their coverage because of these limits.

People who go without health insurance for a long period of time, or who have expensive health problems, may be deemed to have "preexisting conditions." Insurance companies have the right to refuse to right policies for these people, can charge a great deal for these policies if they do write them, or can cover everything except the preexisting condition.

People who do not have health insurance have to pay the full cost of health care out of pocket. In times of emergency, hospitals are obligated to provide treatment, and can only hope that the people they are helping will be able to pay them back later. For non-emergency ailments, there is no mandate to provide care, and hospitals or doctors may demand payment in advance if they are concerned that they will not be reimbursed.
For example, when my uninsured sister-in-law broke her wrist, the hospital put a cast on it, no questions asked. But when doctors determined that she would need surgery to regain full use of her hand, they would not do the surgery until she pre-paid for the procedure. She was unemployed and had to put the procedure on a credit card, and later declared bankruptcy because she couldn't pay it off.

Older people have access to Medicare, which is a government-run program that operates like health insurance in many way. They can pay extra to "upgrade" their Medicare access, as well.

Another program, Medicaid, is funded by the federal government but run separately by each of the 50 states, and the details vary by state. Medicaid generally covers people who are unable to work because of disability and the children of the poor, and in some states it covers the poor. But I'm not aware of any state that has enough Medicaid funding to come anywhere near meeting the demand.
posted by croutonsupafreak at 7:40 PM on March 23, 2010 [2 favorites]


Most working Americans receive employer-based health insurance.

I wouldn't say that. Nearly half (20 million) of the 46 million Americans without insurance are working. In 2008 nearly one in five of every working American (17%) lacks insurance.

To the OP, I think it's wrong to try to view it as 'public hospitals' vs 'private practices'. Yes, there are hospitals that are run as non-profits and may receive large parts of their budgets as endowments/donations, but they are all still privately run: if you go to the ER they are required to treat you if you have a serious condition but you are going to be billed for services, period. Assuming you don't have insurance and you're not old enough to qualify for Medicare (65 and up) your options are to pay it out of pocket or don't pay it and take the credit hit and deal with creditors hounding you for money for years on end and lose the ability to e.g. get a home loan later. If you were unlucky enough to be involved in a serious injury that required surgery or hospitalization then you could be liable for $100,000 or more which means losing your assets is a serious possibility. Once you fall below the poverty line you qualify for Medicaid, though.
posted by Rhomboid at 8:04 PM on March 23, 2010


Building on what k8t said, here is my experience. Just for reference sake, I am a middle class American making about 65K a year. My employer allows me to choose from several plans with differing deductibles, copays, limits, etc. Because my daughter is still in college, I am allowed to add her to my plan for about $150 per month. Because I chose a higher level plan and my employer pays most of my premium, I end up paying about about $200 per month for health insurance for myself and my daughter. Vision and dental insurance are separate plans with their own premiums. Because I work for a government agency, the pool is quite large so our premiums are considered fairly reasonable. I have a $1500 out of pocket deductible and 80/20 coverage, which means the insurance pays 80% of everything after I've met my deductible and I pay the other 20%

If I need to go to the doctor, I can pick my own doctor and pay the $25 copay at the time of the office visit. Certain doctors have entered into "networks" with my insurer. If I choose to go to a doctor "out of network", my insurance may not pay as much or not at all. Most doctors will file their charges with the insurance and bill me for anything the insurance won't pay.

I know people who have employers that pay 100% of their insurance premium but they don't have choices and have insurance that doesn't pay as much as mine. I also know people whose employer pays all of their premium and they have great coverage. The level of insurance and the amount the employer pays of the premium are "benefits" and may make or break a job offer. An employer might not even offer the option of adding spouse or children to the plan or the cost might be very expensive. For example, my son-in-law has insurance through his work but it would cost about $750 per month to add my daughter and their children to his plan. My daughter also has insurance through her work but doesn't even have the option to add family. Because the cost of adding family to the plan is often so expensive, many make the hard choice not to add the family. Some employers do not offer health insurance at all. You can purchase outside insurance but it is usually very expensive at $500 or more a month.

In Texas, there is a government sponsored insurance program called CHIPS for children. Pregnant wormen and newborns can be covered under Medicaid, which is basically government insurance for free. You have to meet income and other requirements to qualify for those programs.

Most doctors are affliated with a hospital or hospitals, so if my doctor decides I need to go in the hospital, that same doctor will treat me in the hospital. In order to see a specialist, I need a referral from my general practioner or the insurance may not pay. I also may need preauthorization for surgery or any treatment at the hospital that is not emergent.

In our community, the county sponsors the hospital so those without means to pay can obtain treatment at the emergency room. For those unable to pay or without insurance, there are special clinics for treatment. For example, one of my grandsons broke his arm and even though he was uninsured, received all appropriate care through the physicians at the hospital including follow-up care. My daughter makes periodic minimal payments to the hospital. His treatment was not conditional upon having insurance or paying up front. This is not true everywhere or for privately owned hospitals.

Depending upon the insurance plan, most cosmetic surgery is not covered, nor are weight-loss treatments unless you meet specific medical requirements such as diabetes or high blood pressure.

This is just my experience in a small city in Texas. Certainly the experience of others will differ from mine.
posted by tamitang at 8:16 PM on March 23, 2010 [2 favorites]


Theres'a bit of confusion in the OP's post. S/he is starting with asking a question about Australian hospital care. Which I can answer, hopefully. To try to clarify that bit, try digesting this. Private hospitals are not for profit, and the argument is, just like private schools, that their existence frees up capacity in the public system. To use the hungry beast line, this argument is "a little bit bullshit".

All doctors are "private", it's just that their public patients are fixed fee, they can charge what they like for private patients.

As for the US system, oh my freaking god what a colossally inefficient shemozzle.
posted by wilful at 8:30 PM on March 23, 2010


Adding to rhomboid's answer, note that that aside from public and private hospitals, there are also private non-profit hospitals, which account for quite a few hospitals. Some are independent, some are owned by religious organizations (a large portion), and some are otherwise affiliated. University hospitals and medical practices are also a distinct group, but in my experience as a patient, they operate most like the private non-profit ones do, even though they're technically public organizations.

Also, two variants I know:

In the employer-provided health insurance model, some employees are more equal than others. Some employers cover more of the insurance, some employers are larger or have insureds of lower risk and can therefore negotiate better rates. Vertically, the lowest- and highest-ranking employees may be treated differently--lowest-ranked employees are largely part-time, and therefore may not qualify for benefits at all, and the very highest-ranked employees might be able to negotiate terms where the company pays for all their insurance, or even all their healthcare costs, but this is usually only the case the most senior employees of large or exceptionally prosperous companies.

Also, in some states, there's a "high-risk pool" plan either operated or mandated by the state. In such plans, people with pre-existing conditions or who can't get insurance otherwise are allowed to buy plans from the program--they essentially act as the insurer of last resort. Naturally, since people don't sign up for these plans unless they're already sick, the premiums are fairly high.

Finally, those with employer-provided health insurance almost always don't pay tax on the money used to pay the premiums (even the portion paid by the employee, and possibly if you're self-employed, but I'm not sure). If you have your own insurance, things can vary anywhere from none to all of it being tax-free, depending on your situation.
posted by tellumo at 8:42 PM on March 23, 2010


Wow, plenty of reading.

I do apologise, I did arouse some confusion with the question. I am hoping to understand the American system but I did give a couple of Australian examples. Not very smart, eh?

Thanks to all so far, I'm going to hunker down and learn something!
posted by micklaw at 8:44 PM on March 23, 2010


So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?
posted by Static Vagabond at 8:51 PM on March 23, 2010


Complicating matters, there's a parallel insurance world called HMOs, which stands for Health Maintenance Organizations, which are insurance companies and health care providers in one. When your employer-based insurance plan is through an HMO, you generally have to go to a clinic or hospital run by the insurance company, except in an extreme emergency.

That's wrong. Most HMOs don't run hospitals, they negotiate contracts with them to be reimburse the hospital for care in a certain way, with restrictions on what care is covered and medically necessary. The big exception to this would be Kaiser Permanente, which does run both a hospital system and insurance plans, and a smattering of hospital systems that run their own health plans.

Once you fall below the poverty line you qualify for Medicaid, though.

This is also wrong in most states. Each state has their own Medicaid eligibility rules, but in most states the working poor don't qualify, no matter how little they make - though their children would qualify.

So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?

Sometimes managed care plans will have specific exemptions from their out-of-network restrictions and rates for this kind of emergency situation, sometimes not. In any case, it would be relatively rare for a hospital to be a non-participating provider for one of the big national insurance companies, or a payor with a significant footprint in their local market - but if you had a insurance carrier that only had a regional network, and needed medical care in another part of the country, you would have a problem.

An added complication is that while your hospital could be in-network, the doctor you get seen by there may not be - they typically bill for their services separately from the hospital's fees (even if the doctor is employed by the hospital), and can negotiate their own agreements with managed care carriers if they're not employees.
posted by strangely stunted trees at 9:23 PM on March 23, 2010


So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?

Most likely you'd be considered "out-of-network" and you'd pay more than your 'in-network" hospital.

Many insurance companies have policies about being more than 50 or 80 miles away from home and how that's on a different pay structure.

In general, if you can, one calls for an authorization before getting out-of-network services. (you're on vacation in a different state and break your leg... you take time to call your insurance company before going to the nearest hospital. It will likely help in the processing later.)
posted by k8t at 9:38 PM on March 23, 2010


So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?

You almost certainly wouldn't have to pay your whole bill out of pocket, but your insurer will definitely cover less of the cost. Plus, any insurance plan I've been on had a separate deductible for out-of-network healthcare providers, so even if I had met my in-network deductible for that year, I would be responsible for paying all of the first several thousands of dollars of my bill at an out-of-network hospital.

I think when you get into an ambulance and it isn't a critical emergency, it's common for them to ask which hospital you want to go to. Better know which one is in your network when that time comes.

Sometimes the network restrictions get pretty tedious. When I lived in Las Cruces, New Mexico, a friend of mine needed a minor surgery. No doctor in town performed that particular surgery. Because his network was limited to the state of New Mexico, he had to drive four hours north to Albuquerque, even though there were specialists in El Paso, Texas, just 40 miles away, who could have done it.
posted by Pater Aletheias at 9:39 PM on March 23, 2010


As another example of how this system sucks:

I took a part-time job only because it had health benefits. Even though i had to pay for 90% of my healthcare, it was better than nothing.

As this business was a local arm of a large national business, it had a large national insurance company.

The downside? NONE of the local doctors took this insurance. ALL of my medical care was "out of network."

I'd imagine that one could try to convince his or her doctor to take their insurance, but i just can't imagine that happening.
posted by k8t at 9:41 PM on March 23, 2010


So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?

In Minnesota for the last few years, there's been a set of agreements among the various provider networks and insurers so that you can pretty much "see any doctor" you want to, although you might have higher out-of-pocket to see some rather than others. This is based only on the good will between the various organizations and companies, if Medical Company A and Insurance Company B can't renegotiate their contract the next time it expires, we're back to the days of "you have to visit a doctor in your approved network".

Something that's implicit in several preceding comments, but I'm not sure if it's spelled out: insurance is regulated at the state level.
posted by gimonca at 9:52 PM on March 23, 2010


Me: Most working Americans receive employer-based health insurance.

Rhomboid: I wouldn't say that. Nearly half (20 million) of the 46 million Americans without insurance are working. In 2008 nearly one in five of every working American (17%) lacks insurance.

Me again: I think you need to study the definition of "most." As you say, 17 percent of working Americans lack insurance. Thus 83 percent of working Americans have health insurance. Most working Americans receive employer-based health insurance.
posted by croutonsupafreak at 10:09 PM on March 23, 2010


So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?

Yes. Many but not all policies have the concept of "network" versus "non-network" coverage, which will determine the level of payment for treatment. For example, I live in Dallas and am employed by a local employer, whose policies are negotiated to maximize local coverage. "Network" hospitals and physicians (pre-negotiated "reasonable and customary" charges) might be covered at 90% excluding deductibles, and that would likely include most but maybe not all local providers, though it is in their best interest to participate. If I were to get in a car accident or sick or whatever out of town or otherwise where the providers were "non-network," the cap could be at 60 or 70%. (This cap, too, is based on "reasonable and customary" charges, so if having a damaged spleen removed costs average $X in-network r&c but costs $X*1.2 out of network, I can only expect to have $r&c*cap reimbursed/covered. Some out-of-network coverage will pay up front and you'll be billed the rest, others expect you to pay and be reimbursed for the covered part of the cost.)

Because "network" designation is fairly key, an important concept here is "pre-approval." Basically that means that if I seek any specialized or emergency care, I should call my insurance company first so they can confirm coverage by that provider or hospital, and failure to do so means I pays my money and I takes my chances otherwise. So if I spontaneously combust, even locally, but am taken to an out-of-network burn center without calling the insurance company first..well, hell, I have to hope I don't, because I'm probably at least partially screwed. Most employer-based insurance will include a certain amount of guaranteed coverage for ambulance and emergency room coverage; mine will automatically cover $400 of ambulance costs, for example, which I think is about 1/3 the cost of ambulance transport.

My "lifetime" coverage* caps at around $1.5M give or take based on whether I call the insurance company from inside the flaming wreckage of my car and am treated in a network facility; that means that I have about 45 days of extensive medical coverage before the hospital starts billing me direct and I have to file bankruptcy. Bankruptcy is the general means of managing catastrophic medical bills; the hospital will write off the remainder of the cost and take it as a loss, as well as rolling those written-off costs into "reasonable and customary" charges to other users.

*This has changed today, but I couldn't tell you in real numbers how it's changed or will change yet.

In the US, we don't technically turn away someone who needs critical care (see above, bankruptcy). Most areas have a designated regional or county hospital that is subsidized to some extent by public funds, the rest is direct-billed if the patient has no other means to pay, and the overage is handled in write-offs. These hospitals are generally designated not-for-profit, with the tax breaks that go with.

This doesn't even address "recission" (refusing or retroactively withdrawing coverage for a related past diagnosis) or pre-existing conditions, which are items addressed in today's health care reform package. Those just make me tired to talk about, which in itself is probably a pre-existing condition.
posted by Lyn Never at 10:10 PM on March 23, 2010


>take the credit hit and deal with creditors hounding you for money for years on end and lose the ability to e.g. get a home loan later

I learned recently that many mortgage lenders regularly disregard medical debt when they see it on a credit report. Or at least they did, back when they were lending. . .
posted by yclipse at 4:48 AM on March 24, 2010


My plan (and this is fairly common in "good" plans) covers two of the three local hospitals as "in network" but if my doctor sends me to the 3rd hospital, or there's a service that only the 3rd hospital provides, my insurer covers that as in network.

For major procedures that aren't emergencies, you do generally call the insurer in advance and get pre-approval. (Technically I don't HAVE to, but it really helps with the billing and paperwork later on.) So when I was pregnant I had to call my insurer and get approval for the delivery hospital stay ... resulting in an absolutely hilarious letter from the insurance company that I stuck in my son's baby book, stating that they had decided that delivery of the baby was a "necessary medical procedure" and I thus had permission to go ahead. I was like, "Dude, I'm pretty sure he's coming out whether you approve it or not!" (I realize it's a form letter, but it's still hilarious.)

I was then able to "pre-register" that the hospital so they already had all my insurance information ready to go and I didn't have to mess with it when I arrived. A lot of smaller practices are doing that now, too ... if you see the gasteroenterology specialist, say, they may call you a week in advance to sort out your insurance rather than doing it when you arrive.

And yes, ambulances here ask which hospital you want to be delivered to if your situation is only semi-emergent. If it's dire, you get delivered to the Level I Trauma Center (there's only the one locally) no matter what, and most plans cover the Level I Trauma Center, but may require you to be transferred to an in-network hospital for recovery.
posted by Eyebrows McGee at 7:40 AM on March 24, 2010


micklaw: reading your question, I think the stumbling block you're having is in understanding health care systems is that there is a difference between how health care is financed and how it is delivered. They're not the same thing; either can be publicly-run or privately-run or some mixture of the two.

A public delivery system is when the government actually owns the hospitals and employs doctors / other health care professionals as employees. This is the case, for instance, with NHS in the UK. A privately-run delivery system is when hospitals are not owned or operated by the government, and doctors are self-employed or in practices that are not affiliated or organized by the government.

Public financing is a totally separate enchilada: it just refers to who pays the bills. You could have a system where both health care delivery and financing are publicly-run, as is the case in the UK. You could also have a system where health care delivery is private but health care financing is public (the government operates as a big insurance company, paying all the bills through money it raises via taxes), as is the case in Canada. Or you can have a mixture of public and private in both the delivery and financing of health care, as happens in both Australia and the United States.

In Australia, from what I understand, the delivery system is a mixture of public and private, with most hospitals publicly-operated by the provinces while most doctors are independent (private). The financing system is mostly public through Medicare, with private insurance playing a smaller role in covering the gap between Medicare reimbursement and what the publicly-run hospitals or doctors bill for their services. Although both delivery and financing are a mixture of public and private, I'd characterize the Australian system as leaning heavily towards public, with the option for individuals to opt out into a privately-run and privately-financed system if they chose.

The U.S. system is much, much more heavily private in both financing and delivery, with public involvement having grown up in a somewhat haphazard manner on the financing side. The U.S. health care delivery system is 100% privately run, with some very small exceptions (there are some federally-run hospitals that deliver services to veterans, through the VHA system). Hospitals can be for-profit or not-for-profit, but they are almost all private and have no particular obligation to serve members of the community (other than emergency cases). Virtually no doctors are salaried employees of the government. Financing for health care is a mixture of public and private; there's been a strong bias towards keeping financing private, because historically health care was financed as an employee benefit, but over the past 50 years the government has stepped in and started paying for certain populations as it became clear they were unable to access private financing. First the U.S. government created public financing for retirees, who could no longer receive insurance through their job (Medicare, which covers those older than 65); then it created public financing for low-income children, their mothers, pregnant women, and the disabled through Medicaid (like retirees, these were people who were not expected to be able to work and thus access private financing through employer insurance). More recently in the 1990s the publicly-financed insurance for children was expanded to kids in higher-income families, through SCHIP.

The health care reform that just passed in the United States leaves the private delivery of healthcare untouched. It also leaves untouched the system of privately-financed insurance through employers, which is where most working-age people will continue to get insurance. What it did was to continue the trend of the government taking responsibility for a group of people that were unable to access either public or private financing of health care. It is expanding the purely publicly-financed Medicaid to all poor people (not just children, pregnant women, parents, or the disabled), and is providing subsidies to the rest of the working-age uninsured to buy privately-financed health insurance in a new insurance marketplace where insurers can't turn down anyone who is willing to pay.
posted by iminurmefi at 7:42 AM on March 24, 2010 [1 favorite]


*There's only one local to me. In a bigger city there's probably several. But you're delivered based on what's nearest, and transfer to something "in network" will only happen later.
posted by Eyebrows McGee at 7:42 AM on March 24, 2010


Oh, and one last thing. i was going to sort out what delivering the baby actually cost ... but in the end, and four months after he was born and the paperwork stopped arriving, I had a 3 1/2" stack of unique insurance statements and bills from various providers (hospital maternity, ob/gyn, pediatrician, hospital infant care) and couldn't even begin to sort it out. My hospital stay cost around $11,000 and the baby's around $3,000, but there were SO MANY MORE BILLS on top of that since everything was billed separately. My sleep-deprived brain finally gave in and said, "oh, gosh, a whole lot."
posted by Eyebrows McGee at 7:44 AM on March 24, 2010


So.. if you've got relatively good insurance but you get in a bad accident and the ambulance delivers you to the nearest hospital, is there a chance that you will have to pay out of pocket because your insurer doesn't have that particular hospital on your plan?

Insurance providers sometimes cover treatment in any emergency room if your condition is life-threatening, such as if you were in a bad accident.

On the other hand insurance providers sometimes initially deny ALL claims and just bill you, even if your condition was life-threatening. If you protest the bill (which I believe one should do), the provider will require things like doctor's statements, personal statements, copies of hospital records, etc. Then they question your documentation and require more documentation. Then you may or may not be reimbursed. (I guess this is not relatively-good insurance, it's really just bad insurance.)
posted by halonine at 8:00 AM on March 24, 2010


Sorry... forgot to mention that the second example is for an in-plan hospital. In fact, it would be the hospital of the institution that you work for.
posted by halonine at 8:02 AM on March 24, 2010


If you're in a serious car accident anywhere near a major city, you'll probably be taken to your nearest county hospital. These hospitals are typically in an enormous ugly building on the outskirts of your city's downtown, and specialize in severe trauma and treatment for the very poor. They are publicly run and somewhat less nasty about billing than private hospitals.
posted by miyabo at 8:11 AM on March 24, 2010


To add to iminurmefi's excellent comment:

"The U.S. health care delivery system is 100% privately run, with some very small exceptions (there are some federally-run hospitals that deliver services to veterans, through the VHA system). Hospitals can be for-profit or not-for-profit, but they are almost all private and have no particular obligation to serve members of the community (other than emergency cases)."

There are "state" (or public) hospitals in many states; these are usually state (not federally) funded and run; sometimes they may be county or city funded and run. I had my baby at a state hospital (and it was really nice, much nicer than the much bigger private hospital nearby). Private hospitals may be profit or not-for-profit, and MOST of the not-for-profit hospitals are religious (the largest single group is Catholic). I live in a city with a small state hospital, a medium-sized Methodist hospital, and a HUUUUUGE Catholic hospital. I grew up in a city with a large, private, University hospital; a big public hospital; and several smaller religious hospitals by groups including Lutherans and Jews. Public hospitals work with insurance the same way private hospitals do.

Any hospital with an ER that takes federal funding for their ER (and all of them do) must provide care to anyone who enters the ER. States typically provide additional funding to ERs and may add additional restrictions.

Beginning in about the 60s, public hospitals typically pulled out of impoverished and rural areas because they were expensive to serve and used a lot of tax dollars with little return, and were politically unpopular. This often left impoverished areas only served by religious hospitals (often Catholic hospitals, in the north anyway). So many people, especially if they are poor or live in a rural area, only have access to religiously-run health care services, which treat all comers, but which may not provide a full range of reproductive or end-of-life care. There are something like 28 (rural) counties in my state where the ONLY health care provider is Catholic. This is part of why issues like birth control, abortion, and end-of-life care can be difficult in the U.S. in terms of lawmaking and policy. Religious hospitals can't be forced to provide services they morally disagree with, but we have a system where religious care is often the only available care. (To me, that suggests the states should stop abandoning their most vulnerable citizens and closing the public hospitals that serve them, but nobody put me in charge. :) )

There was a political move by an inept politician in my state that would have forced all hospitals with ERs to provide abortion on demand, and some of the religious groups said, "Thanks so much for the opportunity to serve you for the last 60 years, we'll be forced to shut down now, and take our multi-million-dollar charitable subsidy that our donors provide to give care to the poor that your state doesn't do through its own tax dollars with us." Something like half of the state's citizens would have been left without ER access, and of course it offended many religious voters as well. The politician was forced to back down, not least because finding millions in tax dollars to replace the millions in donor dollars would have been impossible.
posted by Eyebrows McGee at 8:13 AM on March 24, 2010 [1 favorite]


Yes, I guess I should clarify the distinction between "public" and "private" hospitals in my comment--there are certainly safety-net hospitals funded and affiliated with local counties in the United States. They aren't, however, publicly-run in the sense that the county collects taxes to fund the hospital and then everyone in the county is entitled to some amount of free care from the hospital.

The public/private divide for health care delivery is similar to the distinction between public and private K-12 schools, I think: both can be funded mostly or largely through the government, but in one case (publicly-run schools) everyone in the county is entitled to use the publicly-funded and publicly-run service, while in the other (private schools) there isn't any entitlement created by virtue of receiving tax dollars (through vouchers or whatever other means).

In this metaphor, I think county-funded safety-net hospitals in the United States are similar to charter schools--they may be technically funded and owned by the government, but have a significant amount of managerial autonomy, and most critically they don't have the same sort of entitlement to services for everyone in a geographic area that a public school does. As I understand it, Australian public hospitals (which are most hospitals) are similar to public schools--they are funded by taxes, the local government has significant control, and the local population has an entitlement to the services.
posted by iminurmefi at 9:37 AM on March 24, 2010


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