In the second episode of “The Hidden Costs of Health,” we dive into the burdensome reality of small item expenses in hospitals, exploring how seemingly minor items can quickly turn into significant financial burdens. 

How do Small Items Turn into big costs  

The complexity of facility fees contributes significantly to these large bills.  

These fees encompass a range of factors, including salaries for medical staff, administrative expenses, and the cost of the item itself. Hospitals have to cover expenses from procuring, storing, and maintaining the items, so that there’s always a supply when they’re needed. Also adding to costs is the overuse of emergency rooms for issues that could be treated at primary care facilities, often from individuals who are underinsured or uninsured.  

How can hospitals help?  

The absence of transparent pricing leaves patients in the dark and unsure of what to expect when seeking care. 

• Provide patients with itemized lists and transparent pricing 
• Reevaluate pricing strategies and commit to reasonable costs and equitable pricing practices. 
• Collaborate with insurance providers, charitable organizations, and assistance programs to ease the financial burden of vulnerable populations. 

Listen to the episode to hear Tracie recount her experience following a broken ankle, after she received a $300 bill for a pillow and an unadministered IV. Her story serves as a reminder of the pressing need for transparency in healthcare billing practices. 

By being aware of these costs and what they entail, can help us make informed decisions about our own care. 

Additional Information: 

• The Case of the $629 Band-Aid — and What it Reveals about American Health Care 
• The Secret to Negotiating Lower Medical Bills (aritcle)  
• Medical Debt Forgiveness (Article)  
• You Can Negotiate Your Medical Bills (Article) 

• How to Pay Off Your Medical Bills  
• 9 Questions to Ask Before Paying A Medical Bill 

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[00:00:37] Lauren: I’ve had friends who gave birth and were charged ridiculous amounts for things you wouldn’t even think of. 

[00:00:44] Allie: Let’s set the scene. It’s an average day and you’re preparing dinner for your family. You’re chopping vegetables on the kitchen counter when your mind wanders off for a moment and you accidentally cut your finger. The cut looks more severe than you expected. Realizing that you might need medical attention, you go to the nearest hospital and rush to the emergency room. 

[00:01:09] When you arrive, you’re greeted by a nurse who confirms that the cut was deep enough to require attention, but that it didn’t require stitches. Relieved, you’re grateful that the injury wasn’t as serious as you thought. The nurse cleaned the wound thoroughly, applied antiseptic, and carefully placed a sterile bandage over it. You thanked her for her care and assumed that the visit would be relatively inexpensive.  

[00:01:37] A few weeks later you receive a bill from the hospital for the staggering price of $564. Confused and alarmed, you assume there must be an error. All you’d received was a simple bandage. So, you call the hospital’s billing department. The billing specialist explained that the bandage itself costs $7, but the majority of the bill, a whopping $557, was attributed to emergency room fees.  

[00:02:09] The specialist elaborated that emergency room fees were standard charges imposed by the hospital for utilizing services of their emergency department, regardless of the severity of the issue. You hadn’t expected that seeking care for a seemingly minor injury would come with such a hefty price tag.  

[00:02:30] Hello and welcome to The Hidden Costs of Health. In this show, we’re exploring the burden of medical expenses in this country and how a health event can quickly spiral into financial toxicity.  

[00:02:43] I’m Allie Sandler, a producer for Empowered Us. 

[00:02:49] [Music Ends] 

[00:02:49] The Empowered Us staff has spoken about these small cost experiences outside of this show and realized that it’s more of an issue than we originally expected. While prices for seeking emergency care can vary from person to person, depending on their healthcare provider and insurance plan, if they are lucky enough to be insured, stories like the one I shared earlier are far too common. In fact, if you search bandaid in hospital on your web browser, tons of articles pop up with crazy stories of huge bills for seemingly small cost items.  

[00:03:25] [Music] 

[00:03:26] If this is such a problem why have medical systems not addressed the clear inequities of charging hundreds of dollars for a bandage? To explain this complex system, I spoke with Empowered Us team member Lauren Campise, who was 12 years of medical billing experience, to share some of the reasons why this is the case.  

[00:03:49] [Music Ends] 

[00:03:49] So Lauren, let’s discuss some of the reasons behind these small bills, which are mainly encapsulated by facility fees. 

[00:03:57] Lauren: Facility fees are complex and multifaceted. I’m gonna break down some of the major aspects of them.  

[00:04:04] Allie: Great.  

[00:04:05] Lauren: Let’s start with the salaries for the nurses, doctors, executives, and support staff. Doctors and nurses in America make more than they would in other developed countries. For example, according to a study in 2018, specialists here make two times as much as specialists in nine comparable countries. Hospitals are also willing to pay more to get the best clinical staff that apply for positions because it makes them look good. Some of the larger hospital systems in the United States have employed between 15 to 20,000 staff members. Those salaries all have to come from somewhere.  

[00:04:43] We could talk about paying hospital staff for an entire episode, but let’s move on. Administrative expenses are also a huge factor. It’s been calculated that a third of our country’s healthcare expenses are spent on administrative costs. 

[00:04:59] Allie: Wow.  

[00:05:01] Lauren: One of the largest components of these expenses are the jobs that are required in our system, that aren’t in countries with universal healthcare. We need teams of several billing specialists, medical coders, and more to handle the complexities of all the different insurance companies that exist. And that’s just for one hospital. 

[00:05:20] Another aspect of facility fees are the overutilization of hospitals and underutilization of primary care services. A big part of the problem is that we have a lot of patients that overutilize the ER and urgent care for medical issues that can be treated by a primary care physician or specialist’s office. A lot of patients that over utilize these services are underinsured or non-insured, and this drives up the hospital bills for other patients. 

[00:05:50] Allie: So how could doctor’s offices encourage their patients to seek care elsewhere?  

[00:05:56] Lauren: At the medical practice I worked at last, we were constantly encouraging patients to call us before going to the ER so that we could determine if their medical condition even required it. But a lot of patients go to hospitals out of convenience, or because a doctor’s office doesn’t have evening or weekend hours. 

[00:06:14] Our country also orders significantly more medical tests than other countries. For example, our patients have four times as many MRIs as Canada. It is theorized that this is due to doctor’s fear of medical malpractice lawsuits. We order more tests to prevent unnecessary surgeries and treatments. 

[00:06:36] Allie: All of this makes a lot of sense. A small item costs far more than the item itself. So, what are some of the things that hospital systems or even the federal government could do to protect patients from surprise bills like this? 

[00:06:51] Lauren: Unfortunately, there’s currently no federal law that requires transparent pricing. The No Surprises Act went into effect in 2022, which restricts surprise billing for insured patients who receive care from out-of-network providers at in-network facilities.  

[00:07:08] I’m not sure how hospital ERs are handling this yet, but I would love to see billing staff that are hired specifically to communicate costs to patients. They would run a patient’s insurance at the time of the visit and create a printout of the estimate.  

[00:07:23] But the main reason this hasn’t happened yet is because of how many insurance plans there are. There are so many nuances and differences between each plan that make this too complicated. On top of that, this is just another medical billing staff member that hospitals would need to hire. But [Music] it is well worth it in my opinion.  

[00:07:46] Allie: In hospital systems and healthcare in general, it’s not news to anyone that being up charged on small cost items is a problem. Which begs the question, is healthcare a human right or is it a business? I’m sure I’m not alone when I say I wish it was a human right. And in countries with universal healthcare, that’s the goal. In the United States however, the medical field runs as a business. It requires an influx of money to work and provide it services.  

[00:08:19] Firstly, there’s the need for cost recovery. As hospitals incur expenses in procuring, storing and maintaining these items. And these costs must be recuperated to maintain financial stability. Secondly, charging for these items enhances the patient experience by ensuring that necessary supplies are readily available, therefore speeding up care delivery and minimizing potential delays and risks.  

[00:08:49] This approach also contributes to patient comfort. Additionally, revenue generated from these charges can be allocated towards improving health care services and enhancing the hospital’s infrastructure. 

[00:09:05] When preparing for this episode, we put out a post to see if anyone would have stories of bills around small cost items. While we expected a few replies, the response was pretty incredible. I had a chance to have a conversation with one of the people who replied, Tracy Ennis, about the billing experience she had a few years ago.  

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[00:09:28] Tracie: I broke my ankle in 2017 and when the ambulance was called, they used a small little pillow that was really cheap, probably cost a few cents to make, and they tore it open really easily to wrap it around my ankle in the ambulance. And that pillow was around $150. They also opened an IV, with some pain medication to give me on the way to the hospital, but the road conditions made it too difficult to insert the IV, so it was never administered. And because it was opened, I got charged almost $200 for it. 

[00:09:59] And when I got the bill, that included the whole nine yards – the hospital stay, the medication I got in the hospital, things like that. They were expected, but the little things in the ambulance, I did not expect that. I was floored when I got over $300 in charges for stuff that was maybe 5 cents or not in use. 

[00:10:18] Allie: After receiving these bills, did you reach out to the billing department?  

[00:10:22] Tracie: I tried to dispute it and I got nowhere. So, in the end, I took the hit and they didn’t wanna work with me, so there was nothing else I [Music] could do at that point.  

[00:10:34] Allie: Unfortunately, stories like Tracy’s are all too common. She told me after our recording, that she hopes her story can serve as a lesson for others.  

[00:10:46] Okay, so if you’ve been listening to this episode and have been thinking, “Geez, now what am I supposed to do if this happens to me?” There are resources out there to help.  

[00:11:00] Jared: My name is Jared Walker. I’m the founder and executive director at Dollar For. 

[00:11:06] Allie: Dollar For is a nonprofit organization that helps eliminate medical debt by enforcing hospital’s Charity Care policies. Originally started after Jared saw his own family go through a medical and financial emergency, he wanted to help others avoid the financial burden that comes with a medical crisis.  

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[00:11:26] Jared: So, started originally as a crowdfunding platform to help people pay medical bills, and then over the years shifted it to a patient advocate organization, that is enforcing hospital Charity Care. 

[00:11:37] Allie: Can you tell us a little bit about what Charity Care is?  

[00:11:40] Jared: Charity Care is a federal law that went into place with the Affordable Care Act. It requires nonprofit hospitals, which is most in America, to have Charity Care. And Charity Care is simply free or reduced care for people that meet the income requirements. And every hospital is different. Unfortunately, that’s not really standardized, but if you meet the income requirements, hospitals are legally required to waive or reduce your medical bills. 

[00:12:06] Charity Care is the best kept secret of the Affordable Care Act. No one knows about it, and even if you do know, it is extremely hard to access. And because of that, we have millions and millions of people declaring bankruptcy, going on payment plans, taking out loans for medical bills that they don’t have to pay. There are barriers that are put there on purpose. Some of them are legal, some aren’t, and it’s just a really difficult process. 

[00:15:37] At Dollar For, we have created a eligibility screener. We have the Charity Care policy data for every hospital in the country. So, every hospital has their own income criteria and way of doing things. So, a patient can go to our website, and put in their household size, their income, what hospital holds the debt, and it will tell them if they’re eligible according to their hospital’s policy. 

[00:12:52] And if they are eligible, then we have a team of patient advocates that will help complete the necessary paperwork, submit it to the hospital, and advocate on their behalf until hopefully the medical bills are gone. 

[00:13:05] Allie: How have you seen patients react to small cost item bills?  

[00:13:08] Jared: It, it’s always shock. People are always shocked. And it’s always, “I was there for 30 minutes, and I don’t know how this happened. I have a $3,000 medical bill”. It’s always feeling overwhelmed, feeling defeated, even shame. There’s a lot of shame in having debt and not being able to pay it, and we are trying our very best to help people through this process without that. This has nothing to do with something they did wrong. It has everything to do with a bad system. 

[00:13:36] Allie: Do you think people are uninformed of the true cost of the emergency room visits and go to the ER, assuming that it’ll be more accessible or cheaper? 

[00:13:45] Jared: There’s definitely the two sides of it. Like, our system is so incredibly complicated that most people that are low income are just trying to survive. And when, when a medical emergency happens, the thing that they think to survive is go to the ER because they know that they can get help there. They can’t be turned away. And then you have the other side that is, they know they’ve been burned by the system before, so now they just neglect care because the fear of getting that bill, which creates more problems down the road.  

[00:14:17] Allie: What are the effects that debt can have on patients who already identify as low-income? 

[00:14:23] Jared: A medical bill we see all the time being the thing that tips the scales for people. When you have an emergency like that, a lot of times people are living paycheck to paycheck. And then it becomes a, “Now I can’t make my car payment, now I can’t make my rent payment. I can’t put food on the table.” 

[00:14:41] We’ve had multiple people talk about how they are gonna have to drop out of school. Like they’re sacrificing their education, they’re sacrificing a lot to pay these medical bills, in most cases that they shouldn’t have to pay anyways because they’re probably eligible for Charity Care. So, I think a lot of times that like cycle of poverty kind of starts with these medical emergencies, and then all of a sudden you have all of these other things that happen. 

[00:15:05] You, you’re not able to make these other payments. So, your credit score is lowered and now you can’t get a loan for the next opportunity. So, we really see the elimination of medical debt is huge for people, but it opens up all these other doors, and opportunities for people, because a lot of times they’re sacrificing a lot to try and pay these medical bills. 

[00:15:24] Allie: Why is it so difficult to receive Charity Care?  

[00:15:28] Jared: I think that there’s this big idea, that people think if you give out too much Charity Care, the hospitals are gonna go outta business. That is not the case. Hospitals are not going to be hurt by giving out Charity Care. So, there’s this idea that increased Charity Care is gonna reduce hospital revenue. It’s not the case. And I think that there’s another idea of if we’re generous with our Charity Care programs, then we will become overwhelmed with poor people that are gonna flood our hospitals. 

[00:16:02] I have heard multiple times from hospitals like these exact words, “We don’t want to be known as the most generous hospital”. That is the reason. So, I think that those would be the two reasons that we get from hospitals when we’re trying to encourage them to be better about Charity Care, and they don’t actually make sense. Neither of those things actually happen when hospitals are generous with Charity Care.  

[00:16:25] [Music] 

[00:16:27] Allie: Organizations like Dollar For specialize in supporting patients navigate the Charity Care process. If you have a large hospital bill Dollar For provides a free eligibility screener to see if you’re eligible for your hospital’s Charity Care program. Check it out at dollarfor.com/help.  

[00:16:48] However, if you don’t qualify for Charity Care, there are other fail safes you can use to better advocate for your own health and bank account. Rather than assuming or hoping the price of a small cost item is in fact small, you can ask and advocate for yourself if you believe this item is truly unneeded in your care. 

[00:17:12] While the exact cost of these items is dependent on many factors, such as the individual hospital and your health insurance, having a better understanding of what it is you’re paying for allows you to make more informed decisions and feel more empowered in your own care.  

[00:17:30] Also coding errors and other billing mistakes do happen. So, if your provider is unable to determine an estimate on pricing and you have health insurance, reach out to your insurance provider to make sure you’ve been billed for your services under the proper codes. And that your bill does not contain additional charges that do not pertain to the care that you received.  

[00:17:55] We understand that a lot of people learn in different forms, so there will be a corresponding blog to this episode where we fully define the terms and also provide different tips and resources, whether they were mentioned today or in addition to that. So, check it out on empoweredus.org. We’ll link it in the show notes. 

[00:18:13] Also, if you found this episode to be informative and impactful, please share it with anyone else that you think may need to learn about this. It may fill in some of the gaps of their knowledge. 

[00:18:25] We at Empowered Us are committed to advocating for affordable healthcare for all. We look forward to continuing these conversations with patients and experts to both educate and create new solutions. Let’s keep pushing for change together. Take care and see you next time.  

[00:18:44] [Music Ends] 

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