The first part of the problem was human error, the second problem is not. In fact you might argue it is intentionally a part of the billing system.

I may be cynical and the problem maybe happenstance, but nonetheless it gives me great cause for concern. You see all the caregivers you encounter in your hospital stay want to provide quality care. Be they techs, nurses, dietitians or phlebotomists, we all have the same goal. But I am not so sure that is the case for the billing department.

A pretty bold statement but hear me out on this. I have audited quite a few medical and hospital bills. And I am surprised at blatant excesses on the bills.

In future articles I will go over some sample bills. I will show you how they are set up, and believe me it isn’t with consumer readability or understanding at the forefront.

But beyond that here is a quote from the American Hospital Association on billing practices as aired on CBS News 60 Minutes. “Actually, what hospitals charge for a service is the same for everybody, whether they have insurance or not. What’s confusing for everybody is that what a person ends up paying in this country can be very different,” says Carmela Coyle, The senior vice president for policy for the American Hospital Association.

So to put it another way, a portable chest x-ray costs the same for everybody in the country. But we might pay different amounts?

Clear as mud right? And that is what I mean by the problem is inherent in the system.

Each hospital has a master list called the “charge master”. In it all the services and supplies in the hospital are priced. Then when a patient is billed some are given discounts while others pay the full Charge Master price.

But to make matters worse, hospitals keep this charge master secret. And as Gerard Anderson, a professor of public health at Johns Hopkins University notes, “That information isn’t available to you. In the hospital sector, you can’t do any comparative shopping. And because you can’t do comparative shopping, the hospital has no reason to control prices.” Thankfully that is beginning to change however.

I would call Dr. Anderson an expert on this. He helped the government draft the rules Medicare uses to reimburse hospitals for services. So his assessment is valuable, and asked why hospitals can do this Dr. Anderson said in part “… essentially, they can get away with it.”

But the times they are a changing, because like taxes, everyone at some point in their life is going to get a hospital or medical bill. And in this case it happened to Richard Clarke. And because it did, he began the Patient Friendly Billing project.

In the next article Richard Clarke and Patient Friendly Billing will offer some hope for all of us.