A Valuable Negotiating Tool

If you've been reading my blog or conducting independent research elsewhere, you probably know by now that over 90% of hospital bills are inflated or include erroneous charges. You probably also know that hospitals often charge the uninsured as much as 400% more than they charge the insured for the exact same procedures.

Why such a discrepancy? Being that most people would purchase medical insurance if they could afford it, it seems ludicrous to overcharge the segment of the population that is least able to afford hospital services. Instead, those who wish to pay their bills and only seek fair and reasonable pricing are punished for not having insurance or not being able to pay their entire bills up-front -- even though hospitals might tack on extra fees even when charges have been pre-negotiated.

A major contributing factor in overcharges is probably that the uninsured have no knowledgeable advocates to negotiate on their behalf. Those who have health insurance have the backing of the insurance companies (who do not wish to pay more than what is necessary, though even they overlook charges in the interest of saving man-hours); and those who qualify for Medicare and Medicaid have the backing of the government (which would likely refuse to pay anything it doesn't agree with). Unfortunately, Moms In The Middle and other uninsured people have no such automatic benefits and feel they are forced to accept whatever terms hospitals offer in order to receive proper medical treatment; whether it's for a broken foot or it's for prenatal care and delivery.

The key to successful medical billing negotiation is education -- the uninsured have to use the resources available to them to understand hospital procedures and medical billing practices. They must negotiate fair terms before receiving services, and get everything in writing to reduce the likelihood of disputes that could ruin credit history.

One valuable tool to use when educating oneself is the Hospital Prices Revealed section of HospitalVictims.org (http://www.hospitalvictims.org/hv_hosp_home.asp). With this tool you can search for your hospital and learn useful information such as the hospital Cost To Charge Ratio, Ancillary Billing and Total Hospital Charges. This means you can find out how much cost your hospital actually incurs for every dollar it charges and learn the percentage of fee mark-ups -- giving you the power to knowledgeably negotiate terms based on what you know the hospital can afford.

The tool also compares your hospital's Cost To Charge Ratio and mark-up percentage with The John Hopkins Hospital, widely regarded as one of the finest medical institutions in the nation. This is a great feature because, in most cases, Johns Hopkins has more reasonable pricing for better services -- another bargaining point to use during negotiation.

Let's examine a couple of hospitals with this tool, one from a major city and the other from a small city:

Dallas County Hospital District (Dallas, TX)

Cost To Charge Ratio: .43 (It costs this hospital 43 cents to operate for every dollar charged to patients)

Mark-Up: 234%

Platte County Memorial Hospital (Wheatland, Wyoming)

Cost To Charge Ration: .68 (It costs this hospital 68 cents to operate for every dollar charged to patients)

Mark-Up: 146%


Some hospitals are even worse with operating costs at only 6 cents or less per dollar. What a profit margin! But knowing this information for your specific hospital can help you negotiate fair and reasonable fees. In essence, you know what the hospital's profit margin is, and you can push them to work within the profit window they've created. For example, the Dallas hospital in the preceding example would still make a profit if it charged you half as much as normal fees (at that rate, the hospital would incur fees of 86 cents per dollar charged. By comparison, Johns Hopkins incurs fees of 85 cents per dollar charged).

So if you're negotiating with your hospital without an advocate, add this weapon to your arsenal to help negotiate the best deals. And don't forget the check out the other resources available to you at Maternity Health (www.maternityhealth.org) and Maternity Advantage (www.maternityadvantage.com). The more you know, the more you'll save on your pregnancy.

I am PRO MOM!!!
Aaron Bouren
Advocate Aaron