Bravo to the editorial board of the Maine Press Herald, for recently demonstrating its savvy understanding of healthcare cost dynamics. We’re the first to admit – they aren’t always easy to follow.
In an April 22nd article, the Maine Press Herald explains that MaineHealth—the state’s biggest health care provider—is in a dispute with Anthem, one of the biggest insurance companies in the country.
The health system is fed up with the health insurer’s shady payment practices. Back in March, MaineHealth announced that Anthem had repeatedly underpaid flagship hospital, Maine Medical Center by $1 million per month. Some estimate a total of $13 million in underpayments to Maine Medical Center, and more than $70 million in unpaid claims to the MaineHealth network.
Anthem’s retaliation? “The company accused ‘MaineHealth of overcharging patients, citing bills that include charges of $136 for a bag of saline solution that cost the hospital about $2.’”
The spat is ending in a separation. Maine Medical Center is planning to leave Anthem starting January 2023.
Look—we cover these disputes a lot. Often, this is where the local media coverage ends. The hospital says one thing, the payor says another, and there’s the end of the article.
But the Maine Press Herald adds more:
“What’s going on is the way that a provider’s overhead costs are allocated in our fee-for-service health care system. There is no line item on your bill for the people who make sure the hospital has enough bags of saline, that they are stored properly or that they are put into your body by someone who knows what they are doing.”
Exactly right. The separation of Maine Medical Center speaks to an overarching theme that health insurers and hospital critics continue to miss: Hospitals like Maine Medical Center are open 24/7, staffed by incredibly skilled individuals who have gone through years of medical training. And these health care workers must be ready, at a moment’s notice, to treat anything—from a sprained ankle to a gunshot wound. And none of that preparation, none of that labor, none of that expertise, shows up on the patient’s bill. All that hospitals bill for are services and products.
Healthcare costs are a big problem in the U.S., and every part of the system plays a role. And insurance companies continue to divert attention away from their actions by blaming hospitals. The reality is that hospitals are stretched thin, operating on razor-thin margins, all while trying to ensure they have the staff and supplies to care for patients—which isn’t guaranteed, as we saw during COVID. So, yes, hospital costs are higher than the bulk unit cost. Because a bag of saline isn’t just a bag of saline—it’s not particularly useful without a skilled, registered healthcare professional to administer it.
Meanwhile, insurers seem to charge an awful lot for their products, without nearly as much value to show for it. And need we remind you—this isn’t the first time Anthem has been unfaithful to the providers they’re in relationship with. Officials in Georgia fined Anthem $5 million because of claims processing errors back in 2015, and the insurer owed $3 million in underpaid claims to providers in California.
The Maine Press Herald seems to get it, and we agree. Insurers know exactly how the system works – but are banking on unaware patients buying their side of the story.