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Pa. Sen. Michael Stack (D-5) wants to change the way hospitals and health care facilities bill insurers and their customers

I am now going to quote his April 11 proposal memorandum in its entirety.

In the near future I plan to introduce legislation that will change the way hospitals and health care facilities bill insurers and their customers.

Currently, there is a huge problem with the way that hospitals and other providers of medical care services bill and get paid in the US. PA is not exempt from this problem. The hospitals and medical providers in PA currently use very complex and complicated billing and accounting systems to generate bills for services.

A typical hospital may have up to 500 to 1,000 or more different rates for a single service in its billing system, due to the large number of payors that they contract with. This complex and complicated billing and accounting system costs hospitals a lot to maintain and inflates the cost of their services by up to 10-15% in the form of overhead just to maintain this artificial and senseless billing system and the employees necessary to operate it.

My legislation would simplify things: Instead of maintaining this unnecessary and complex accounting and billing system, this legislation would allow each hospital to set its own rates for services, so long as it charges all payors the same rate for the same service. This act would require that the rates are published and made available to all, regardless of size, pre-existing conditions, etc.

This will get rid of a large portion of the unnecessary overhead and expense of maintaining the billing system and accounting departments to support them. It will also allow the market and increased competition to control costs. Hospitals will now have to compete against each other to get patients and the entire health-care service marketplace will grow as health plans and payors will now also have to compete with each other without perpetuating the existing monopolies that are prevalent in the PA health insurance marketplace.

A recent article in the Washington Post shows how these various billing rates are gouging consumers out of billions of dollars.

If you wish to co-sponsor this legislation, please contact my Harrisburg office.

My first response is this: !!!!!!!!!!!!!!!

My second response has to do with how much control Medicare and Medicaid — programs with massive federal involvement — have in hospitals and, generally, how very complex the industry is. The memo makes current billing practices sound like an anachronism that exists only because no one in the industry ever said, "Hey, how about we try doing this the easy way?"

An easier and better way may, indeed, be possible, but I'm pretty sure this simplistic answer is not the right one. Unless you convince me that you really understand the problem, I'm going to be dubious that you can solve it — and that's precisely where I'm sitting on this proposal.

• • •

This is more long-form and biographical than most health care articles I read, and also based in the UK, but frank and fascinating. Also, I found the part where he opined that the NHS was able to raise money better "when it was more like a charitable organization" and less privatized. Here, I'd expect people would be way more willing to contribute to a private charity than to government of any stripe. I mean, when's the last time you voluntarily sent Medicare or Medicaid a check?

• • •

A while ago I whined about not having started a list of all the Obamacare delays way back when. Turns out I didn't need to, because such a record does exist. There's even a rundown (admittedly less comprehensive) with pictures.

• • •

No big surprise here: States that have expanded Medicaid and opened their own exchanges have seen a higher rate of decline in the number of uninsured.

• • •

If you expect controversy on this answer, you're right: Does the birth control mandate raise premiums?

• • •

Finally, in case you somehow missed the CBO's new Obamacare projections, here's the thing itself.

Heather Stauffer

Heather Stauffer

Heather Stauffer covers Lancaster County, nonprofits, education and health care. Have a tip or question for her? Email her at heathers@cpbj.com. Follow her on Twitter, @StaufferCPBJ.

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