The Cash Nexus

If you attempt to shave too closely in money matters—grabbing when a patient … [is] so low that it is no longer decent to take fees; or hungrily holding watches, jewelry, or other articles as security for payment of your fees; or compelling their wounded or half-dead owners to pawn or sell them for your benefit; or [being] … too vigorous in your efforts to collect fees from persons in narrow circumstances—[this] would not only be brutal barbarity, but would be very apt to … create a widespread community feeling of hostility against you.… It is almost better to be defrauded than to collect your fees by such method …

—Daniel Webster Cathell
The Physician Himself

Courts and legislatures have labored for decades to protect patients’ choice of medical treatments, even though patients seize that gift less eagerly than lawmakers expect. Yet while courts have rushed to build the whited sepulchre of informed consent, they have fled from a related problem that patients actually yearn to solve and that actually can be ameliorated—the plight of patients who perforce agree to a treatment before they know its costs and who receive a bill both unrelated to the treatment’s value and several times what an insured patient would pay.

Increasingly, patients must be consumers in the medical marketplace. This frightens patients, and should. Medical bills can be as alarming and baffling as medical ailments. The costs of illness—particularly medical bills—contribute to more than half the personal bankruptcies in the United States. Even insured patients may find themselves paying for uncovered services that can be both numerous and dear. Furthermore, managed care’s effort to subdue health costs by inducing doctors to save money has been badly battered, and the new cry is to give patients such inducements instead. “Consumer-directed health care” makes patients consumers by asking them to purchase insurance programs shrewdly and by using high deductibles (one to five thousand dollars) and health savings accounts to make them purchase specific treatments. In short, individually we must increasingly worry about buying care wisely, and nationally we must worry about our latest adventure in financing health care.

So why should courts protect patients as consumers? You, dear consumer, should protect yourself (caveat emptor) by evaluating what you buy, and the market should protect you by disciplining vendors who compete for your business. Evangelists of consumer-directed health care fondly imagine just such a market.

Really? You arrive at the doctor’s office or the hospital and are told to sign a contract. Like this:

In consideration of hospital services rendered to the patient, I jointly or severally, do hereby agree to pay Athens Regional Medical Center any and every account presented to me, or us jointly or severally, for said service or services in accordance with the rates and terms of the hospital.¹

In other words, “Do you want help? Sign a blank check. We’ll fill it in later. As we wish.” You do want help, so you sign. (And even if you don’t, accepting services binds you to pay for them.)

Consumer! You must shop for capable care at palatable prices. True, doctors don’t advertise prices. So you telephone: “I’m a good consumer trying to direct my health care. How expensive is Dr. Jones?” Even if a human being answers, even if the human being thinks this question tolerable, what answer can you fairly expect? Do you know how long your visit will be? What services you will need? Which of the myriad insurance policies you have? If you don’t know—and who does?—what doctor’s staff can predict the charges? (And finding out fees is a dream compared to ascertaining the quality of the doctor’s work.)

Or you ask the clerk about the hospital’s prices. The clerk has no idea and resents your impudence. You press up the ladder. Still no idea, still more resentment. After you are discharged, you receive an ingeniously indecipherable bill that no one will explain. Eventually, you discover that bills are

determined according to the hospital’s “Charge Master,” a confidential list of charges made by...