Tip of the health-care iceberg

Hatch’s probe is a decent start to tackling the health-care system’s problems.

Minnesota Attorney General Mike Hatch wants to crack down on health-care providers and make sure those without health insurance are not charged through the roof for their care. Through investigations into Minnesota hospitals’ billing and collection systems, Hatch has rightly concluded the billing system is unfair.

Currently, hospitals negotiate fees for each procedure with individual insurance companies, meaning different companies are actually billed different amounts for the same procedure. Those with insurance rarely see a breakdown of expenses, paying only a deductible and letting the insurance company take care of the rest. But those without insurance are billed directly – and often at rates magnitudes higher than those charged to insurance companies.

Hatch said this problem leads to extreme collection measures – half of Minnesota’s personal bankruptcies are related to health problems. In response, Hatch has proposed a sweeping change for the uninsured: Hospitals would not be allowed to charge more than 5 percent more than what would be charged to Medicare or Medicaid for the same procedures.

This change would certainly level the playing field. It seems grossly unfair that those with the lowest income, who cannot afford insurance, are punished the most with health-care costs. Perhaps if the uninsured were billed more-reasonable amounts, hospitals would have better luck collecting their money (while spending less on collection services), and fewer patients would be forced into bankruptcy.

Health-care services are generally expensive; anyone with a pet that needed emergency surgery can certainly attest to that. Some hospital officials would rather the state focus on getting insurance for more people – but there will always be those without, and they should not be saddled with an unfair burden.

Hatch’s proposal must be taken seriously. However, if lawmakers could reach such a solution, they must try to avoid increasing insurance premiums; if hospitals lose revenue from charging the uninsured less, they might be forced to negotiate increased prices with insurance companies and force premiums up.

The billing problems magnify deep-seated problems in the health-care industry. Hatch has started a valuable discussion to begin solving a few of them.