Healthcare Finance Cases in Healthcare Finance Front

Healthcare Finance Cases

Cases in Healthcare Finance Front Street Hospital: Uninsured Charges and Collections

The underlying issue in this case deals with discriminatory medical pricing strategies. Although these types of pricing structure are common in other industries, such as the hotel industry, the implications on society exceed that of any other industry imaginable. For example, of all the bankruptcies filed in the United States, it is estimated that sixty percent of them are due medical bills (Tamkins, 2009). Furthermore, of medical related bankruptcies, over three quarters of these individuals' actually had health insurance. Therefore, one might wonder how the uninsured could even stand a chance of meeting their obligations; especially since they are billed at the highest rates possible.

Collective Bargaining

In the case, Jane is an uninsured patient and is billed for services amounting to nineteen thousand dollars. It also notes that it the local HMO would have insured Jane then the hospital bill would have been two thousand five hundred dollars; Medicaid would have paid five thousand and Medicare would of paid seven thousand eight hundred. So the question is posed, "Why do the uninsured get stuck with the whole bill." The answer to question is that insurance companies, public and private, have a considerably larger amount of bargaining power than that of any single individual. You can actually estimate the collective bargaining rates from the example provided. The HMO obviously has considerable power in negotiations, Medicaid ranks second, Medicare follows, and the individual (Jane) is dead last in regards to bargaining power.

Ethical Considerations

The most obvious breech of ethics that was presented in the case is the use of jail time or other questionable techniques by some hospitals to collect payments. Debtor's prisons were officially outlawed in the nineteenth century for their inhumanity and the effective return of such arrangements are quite frightening (Jones, 2011). Whether it is intended or not, the treatment that individuals' receive from many hospitals is that they are billed at the highest rates, in some cases more than six times that of what a HMO is billed at, and then when they fail to pay such outlandish bills they are pursued with, in many cases, unethical collection methods.

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