Consequences of Lifetime Caps and Quality of Care Issues

Today’s Wall Street Journal chronicles the story of a California man’s struggle with a staph infection, which was riddled with quality of care issues and resulted in astronomical amounts of medical debt. Worth a look.

Mr. Dawson’s infection went undiagnosed for months, despite visits to his primary care physician, a dermatologist, and treatment from multiple doctors at a hospital for problems resulting from the undiagnosed infection. Finally, when he went to a spine center, doctors diagnosed the infection which had spread throughout his body. Treatment for the infection was begun, yet because of problems during surgery to remove his pacemaker, he was transferred to a cardiac hospital. He was in and out of the hospital and finally able to go home and start rehab.

His struggle didn’t end after he left the hospital. Like many Americans, his employer’s health insurance had a lifetime benefit cap. Just when he needed coverage the most, it let him down. Halfway through his hospital stay, Mr. Dawson “maxed out” his plan, leaving him uninsured facing huge hospital bills. To add insult to injury, with his insurance coverage expired, Mr. Dawson lost the advantage of his insurer’s negotiated rates for care. Like all uninsured, he was faced with charges for supplies and services far more than charged to private insurers or public payors with little relation to actual cost. His hospital bill alone accrued to over $1 million.

Could this happen to someone insured in Massachusetts? Yes. The Connector chose not to prohibit (or limit) lifetime caps in its Minimum Creditable Coverage standards. We hope they reconsider this issue as promised this year and think of people like Mr. Dawson when deciding whether insurance with lifetime caps provide people with adequate coverage. Mr. Dawson never would have had to deal with the bills if his care had been appropriate and if his doctors had considered all his symptoms and possible diagnoses.

There was a happy ending for Mr. Dawson. He survived his struggle and slowly returned to normal life. He now receives VA health care coverage and after a year of fighting with providers over the charges, Mr. Dawson found out he qualified for charity care from the hospital. It’s alarming to think of him as one of the “lucky” ones.

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1 Response to Consequences of Lifetime Caps and Quality of Care Issues

  1. Barry Carol says:

    I took the following two takeaways from the article:

    1. A lifetime cap of $1 million is woefully inadequate. My own employer had a $1 million cap for the 13 years that I worked there and, probably, for quite some time before that. At the start of this year, it was finally raised to $5 million. I wonder what the incremental cost of that benefit improvement was and, if necessary, how much of an increase in the deductible and/or the employee’s contribution toward the premium would have been needed to cover it if the employer felt it couldn’t afford to.

    2. Our hospitals’ business practices related to billing the uninsured are obnoxious, outrageous and unacceptable. I wonder how a hospital CEO, CFO or other executive would feel if he or she or a relative or family member were on the receiving end of such bills and attempts to collect them, especially when they know full well that the hospital routinely accepts far less as full payment from Medicare, Medicaid and private insurers. The cost shifting that goes on between Medicare and private insurers is bad enough, but billing (and expecting to collect) at chargemaster rates to an uninsured patient, EVEN IF WEALTHY, is a business practice that borders on criminal, in my opinion. If I were an uninsured person of moderate wealth and were treated that way, I would be inclined to sue the hospital for dealing in bad faith even if the care itself was good.

    I think it would be interesting to get a hospital CEO’s perspective on this.

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