Hospital charges vs Insurance

bruckshaw1

With a hospital “self-pay” headline price (up-front payment) there are usually some necessary extras to be added. BMI ‘s online price for procedure W4210 (total knee replacement) is “from £9800” which is in rough agreement with several other hospitals’ charges and the extras are the initial consultation charges (including X-ray) and out-patient physiotherapy but neither of these can be regarded as optional. The actual invoices for these items totalled £565.04 so that the self pay cost for similar treatment could have been about £10500. My total actual invoices amounted to over £15100 but my company-funded insured limit was £12500.

Where an insurance company is involved premiums are paid to the insurer to cover the cost of treatment up to a specified limit The insurer and provider (hospital) have an inclusive contractual agreement that the cost of specific treatment packages will be limited and fixed. The contract ensures that the insurer will not be overcharged for the items specified in the contract and the benefit to the service provider is that the hospital has access to the insurer’s network of potential customers. One might expect that the contracted price would be the cheapest possible i.e. not more than the self-pay figure but the items contained in the contracted price may not be the same as in the self-pay inclusions and without that information no direct comparison is possible and the charges are not transparent. I am in discussion with the hospital on this issue.

It must be allowed that with self-pay the hospital does not incur any late payment administration costs. My insurers appear to have paid the hospital within 2 weeks but there have been 12 separate invoices. How economical is that?

So why is the contractual price so much greater than the self-pay price? ... 50% in my case.

And is it not odd that items such as surgeon's and anaesthetist's fees are not in the "inclusive" contractual package? They are hardly optional.

InsideInsurance

First of all, are you comparing apples and apples? Are both fees inclusive of the surgeon/ consultants fee that is normally extra to the list price? Same number of nights stay in the same grade of room? etc

Large companies dont always receive discounts up front. In many cases they may even pay a premium for better or guaranteed service etc. However what is also fairly common is companies getting some form of rebate or profit share should they hit certain volumes of business/ spend.

For example with a former client they received 15% discount off list price for all purchases but then a further 15% off anything over £5m/ year. During the year everything was 15% off and they at year end a cheque for the other 15% would come.

I wouldnt be surprised if there wasnt some tax advantage of doing things this way rather than just discounting at the start and clearly when you have customer limits etc it can help there too.

bruckshaw1

I tried to cover the apples vs apples point in my posting. The specialists' fees are included in the self-pay price in this instance. That is stated on the BMI website and the hospital, as I said, is preparing an analysis of the "inclusive" contractual charge for me but it may take a month to do it!.

Room grade is something of an unknown as there was no choice offered and length of stay was the quoted normal for this procedure ... 4 nights (5 days). Self-pay covers as long as is necessary.

The bottom line is that my insurance company received invoices for £15100 when the self-pay price would have been about £11000.
Prior to admission the cost was estimated at £9K-£11K total. There were no complications.

I was not able to follow your other points I'm afraid but they seem to confirm the lack of transparency that the patient experiences just when he/she needs confidence.

InsideInsurance

Have you asked them why they came in at over 70% more than their bottom estimate given there were no complications that you know of?

bruckshaw1

Yes I have. There is one huge un-itemised invoice for £12838 for "inclusive contracted package price" plus 11 other smaller itemised ones. I did say that they are supposed to be analysing that one for me but that it may take up to a month.

bruckshaw1

Update. The insurer now writes now that insured claims are usually less than the equivalent self-pay costs. My insured claim was 45% (£4760) higher than self pay (like for like). The reason? A contract between the insurer and the hospital. Is this a cartel? Where does the patient fit in?
The hospital charged £13000 for a 5 day stay excluding consultant, anaesthetist, and physiotherapy. I had an occupational policy limit and so I had to pay £2600.

bruckshaw1

Final update.
The insurance company and the hospital have re-considered and written off over £2000 of the hospital fees. Not a perfect solution but an adequate one for me.
Thanks to all for the interest shown.

vaio

sadly an all to familiar story these days....business/insurer tries to help themselves to your money and gives it back if you challenge it.

It's a good business plan as long as most people don't challenge it