The Price We Pay

by Marty Makary

  The folks at Sentinel Air gave three case studies to federal government investigators. Each one compared the “market” rate to the “surprise” rate:

  Example 1: The company American Medflight flew a patient from Ely, Nevada, to Salt Lake City, Utah, in a 1978 Piper Cheyenne turboprop airplane. That’s 213 miles. American Medflight charged $55,155 for the flight. (Frazier said that’s about 17% of the cost of the aircraft.) Sentinel contacted American Medflight and asked for a quote for a patient transport from Ely to Salt Lake City. The company said it would do the flight, using the same aircraft and crew, for $7,200.

  Frazier said the lower price is actually market rate. You must assume the company still profits with this more reasonable fee, he said. But when the company had no market participation, it could charge 766% of the market rate. Frazier sent American Medflight’s original bill and its drastically lower quote to the GAO.

  Example 2: REACH Air Medical flew a patient 232 miles from Elko to Reno, Nevada. The company charged $65,000. Sentinel contacted REACH and asked for a quote for the same service. The company said it would do it for $13,000. In that case, the company’s charges were 500% of the market rate, he said.

  Example 3: Airlift Northwest used a Lear jet to take a patient from Juneau, Alaska, to Seattle, Washington. It charged $101,388. Sentinel called the company and got a quote, for the same flight, of $22,950. Airlift’s charges were 422% of the market rate.

  Frazier said there’s an easy explanation for the large gap between billed charges and the bids on the same flights: customer choice. “Providers knew that if they failed to provide a competitive quote, the customer would contract with another service,” Frazier wrote to the investigators. “In other words, the quoted rates are the market prices for the above transports.”

  Many companies hide their prices from consumers, Frazier told the government investigators. He provided an air ambulance consent form that patients have to sign making them responsible for the payment for the flight. The companies know how much each flight costs, he said, but they don’t give a price to patients when they make them sign the legal paperwork. “Air ambulance providers go to great lengths to conceal their billed charges, operating costs, and the availability of other providers,” Frazier wrote to investigators. “Again, the last thing they want to do is participate in a market.”

  Frazier’s letter cited an ABC News story in which a company was asked why it didn’t inform patients about the cost of their services. The company said: “Some have asked why we don’t include pricing on our release forms and the truth is because the number one focus of family and loved ones in these traumatic situations is on making clinical decisions so their loved ones survive. That’s their number one focus—and it’s our number one focus too.”

  At best, that response is disingenuous. At worst it’s downright dishonest, because most air ambulance flights are not actual emergencies. Also, medical providers can’t think only about the physical well-being of patients. Ripping them off hurts them, too. And the industry doesn’t let things go if a bill is unpaid. Air ambulance patients who can’t pay their bills often get hounded by collectors and air ambulance companies place liens on their homes.

  Because of the growing uproar by everyday Americans who have been gouged with no legal recourse, legislators have been getting an earful. Several states have investigated the air ambulance industry on behalf of consumers. Patients and consumer advocates confronted the companies at a Maryland Insurance Administration hearing.

  Lori Parks-Murphy submitted her story in writing for the hearing. In 2014, her husband was flown from Meritus Medical Center in Hagerstown to the hospital where I work, Johns Hopkins Hospital. Air Methods charged $42,863 for the 63-mile journey—more than his bill for an entire week at the hospital. The company billed the couple $37,756 for the amount their insurance wouldn’t pay.

  Air Methods is a publicly traded company that had more than $1 billion in revenue in 2014, Parks-Murphy wrote in her statement. Its average bill is in the range of $40,000. In her case, the charges don’t reflect the cost of services, and the company refused to substantiate them. “These companies charge exorbitant fees because they can,” she wrote. “It is outrageous that these air ambulance companies profit from the pain and suffering of critically ill patients.”

  Officials from two air ambulance companies at the hearing, Air Methods and PHI, used the same old excuses defending their charges. They said the high prices are a result of the cost of keeping their fleet at the ready around the clock. Also, Medicare and Medicaid rates don’t cover their costs, and when private insurers don’t pay the full price, the companies have to turn to consumers. “Our intent is never to gouge patients,” said an accountant for Air Methods.

  Industry insiders gave federal investigators three suggestions for addressing the high prices. Congress could change the Airline Deregulation Act to allow states to have an oversight role. Medicare could raise its rates for air ambulance services. Or the Transportation Department could collect data, for investigations or to make the public more aware of prices. The government investigators recommended that the Secretary of Transportation:

  Post air ambulance complaints online, including those related to balance billing.

  Make complaint information public; for instance, the number of complaints per company.

  See if there’s other data that could help check unfair or deceptive practices by the companies.

  Consider requiring the companies to inform patients about their prices and insurance contracts.

  Unfortunately, air ambulances companies are only one example of how a wealthy class of businesspeople has figured out how to gouge ordinary Americans at a time when they are most vulnerable. Free markets rely on price transparency, which is not only absent with air ambulance transports, but the payments to referring first responders, nurses, and doctors are unknown to the people who get stuck with the bill. If you think this problem affects only those being transported and their loved ones, remember that when health insurance companies are given these bills, they often pay them and pass the cost on to you in the form of higher health insurance premiums, especially in rural areas.

  It’s not just air ambulances that are preying on patients at a scary time in their lives. Some ground ambulances are doing the same. More and more people are risking their lives by taking the popular ridesharing services Uber or Lyft to the hospital even for medical emergencies. Why would they take a gamble on a much slower form of transportation? They’re desperate to avoid the predatory billing of ground ambulance companies.

  My friend Jill risked her life to avoid the money games of a ground ambulance. She had watched her brother go through a nightmare fight with their local ambulance company after he received a surprise $8,000 bill for a short lift to the hospital. After that, she vowed to avoid an ambulance at any cost. Then, a year later when she felt deathly sick and started vomiting, she called Lyft to take her to Inova Fairfax hospital. Curled up in the fetal position in the back seat, she arrived, and noted seven other Uber and Lyft cars also dropping off patients like her, bent over in pain.

  On her suggestion, I drove to Inova Fairfax hospital myself, where I used to work in the emergency room as a trauma resident, and saw what she was talking about. Instead of the ambulances I remember clustered around the emergency room drop-off area, now there was a gathering of Uber and Lyft cars dropping people off.

  We need to restore trust in health care services starting with more honest, transparent, and fair billing practices. It may take an act of Congress to end kickbacks and institute patient protections in the air ambulance business. But state lawmakers could take immediate action to protect consumers. If they can’t control the prices, at the very least they could publicize them. How about a law requiring air ambulances to tell patients how much their flight is going to cost? Or a database that would track and publicly report each company’s charges per flight? The database could also name the person who made the decision to summon th
e air ambulance company, so that hidden conflicts of interest could be revealed. If patients are going to be taken for a ride, at least they have a right to know how much the ride will cost them.

  What I find most inspiring about the work to disrupt the predatory billing practices of the industry is the voices of the many doctors who are standing up for patients. It’s an advocacy that’s intrinsic to the profession of doctoring, perhaps known best to pediatricians but close to the heart of any compassionate doctor who cares for the defenseless and vulnerable.

  Air and ground ambulances are still saving lives, as they were when I was an EMT, but today their bills are putting patients into a state of shock. My hometown ground ambulance company remains a volunteer community service and my hometown hospital of Geisinger decided not to play the air ambulance out-of-network price gouging game. The hospital never sold their helicopters to a private equity group. Instead, they continue to charge fair prices and include them on the hospital bill. Most admirably, they run their air ambulance program to serve patients rather than investors.

  PART II

  Improving Wisely

  CHAPTER 6

  Woman in Labor

  Sweating profusely, her legs up in stirrups, Ebony’s groans and screams flooded the emergency room. She was in the middle of another contraction. She was in the worst pain of her life, but it just another day on the job to the staff at the Florida hospital. After each agonizing push, Ebony fell into a micronap. Like calm water between crashing waves, the brief pause between contractions provided a moment of peace: her labor was progressing.

  The obstetrician on call (I’ll call him Dr. Dinner) had just completed his scheduled office visits for the day. Dr. Dinner had a routine. When on call, he finished seeing patients in his office by two o’clock. Then he would head to the hospital and perform a C-section on any woman in labor, whether she needed it or not. That way, Dr. Dinner made it home by five.

  Doctors agree that, when possible, vaginal deliveries are ideal for both mother and baby. Even Dr. Dinner would agree. My OB/GYN colleagues at Hopkins explained the reasons. As the baby moves through the birth canal, contractions compress and expunge fluid from the lungs, promoting healthy breathing. In addition to the pain of major surgery and a longer recovery, C-sections can lead to surgical complications like infections. In some cases, the C-section scarring can change the contours of the mother’s cervix and other anatomy, reducing chances of her having a vaginal delivery in the future. In rare cases, it can cause chronic pain. One of our pediatric gastrointestinal doctors told me C-sections negatively affect the bacterial balance in babies’ GI tracts.

  But letting labor progress naturally can take hours. No doctor wants to get called out in the middle of the night. Instead, Dr. Dinner used what we in medicine call the “one-hammer approach.” C-sections all around. By 2:15 in the afternoon, Dr. Dinner walked up to Ebony and uttered that famous phrase that nudges moms worldwide toward a C-section: “It might be safer for the baby.”

  I know nudging. A trigger phrase like that can be as powerful as IV sedation.

  Ebony responded to Dr. Dinner’s nudge and the staff prepared the operating room. If she hadn’t agreed to the C-section, Dr. Dinner had another line he frequently dropped: “If the baby dies, you don’t want to be responsible, do you?”

  By four o’clock, Ebony’s baby was delivered by C-section. Per his routine, Dr. Dinner went home in time for supper with his family.

  If only Ebony could have seen Dr. Dinner’s pattern, his 95% C-section rate, she would have known the truth: that his recommendation was in neither her nor her baby’s best interest. Some states publish their hospitals’ C-section rates, but even those statistics wouldn’t warn Ebony about Dr. Dinner. The overall hospital C-section rate would be much lower than Dr. Dinner’s because most doctors perform the operations sparingly, in accordance with best practices.

  As I learned about Dr. Dinner’s routine from staff who worked with him, I knew that he broke no law. If you reviewed his individual C-section cases and challenged his judgment, he could easily push back, pointing out his subjective bedside impressions that would be impossible to verify. He could also produce the consent forms Ebony signed—she agreed to the C-section and its potential complications. No dummy, Dr. Dinner was keenly aware of the litigiousness of obstetrics, so he would also have tight documentation to justify what he did. He knows his uniform approach to delivering babies is immune to malpractice charges. He is also immune to insurance scrutiny, since insurance companies examine only deviations in the care of an individual patient, not patterns based on groups of patients.

  A Hole in the Data

  As I thought about Dr. Dinner’s pattern of unnecessary C-sections, I realized that the ways we measure the quality of health care can be deceiving. We spend a ton of money measuring quality. A study in the journal Health Affairs found that we as a country spend $15.4 billion per year on collecting and reporting our current set of quality metrics. That’s the equivalent of giving every physician in America a part-time personal assistant.

  But our methods of measuring quality are flawed. We focus on the results of a procedure, not on whether the procedure was appropriate. Hospitals track how often C-section patients get an infection or bounce back to the hospital after discharge, but they are not evaluating the most important question: Did the patient even need the surgery in the first place?

  Dr. Dinner’s “complication rates” were probably superb. As we surgeons know, if you are operating on healthy people who don’t need surgery, your complication rate will be close to zero. Meanwhile all kinds of unnecessary procedures are never questioned. Our health care system measures the quality of knee replacement surgery by infection and readmission rates, even though both events are rare. At the same time, orthopedic knee surgeons have suggested that as many as one third of knee replacements are unnecessary.1 That data point is missing from the quality formula, and the miss is a big one.

  In my own specialty, pancreas surgery, most doctors exercise sound judgment in deciding when to operate. But there are others who are far less selective. Despite this wide disparity, all of us are measured by our complication rates. When I go to policy conferences and hear experts say “The only important thing in health care is outcomes,” I feel torn. I want to agree with them, but I know the subtleties involved in how the starting population is defined. If you have unnecessary surgery with no complications, that’s not a great outcome.

  The health care system also measures quality by analyzing the process of doing an operation. Hospitals and regulators monitor how often hospitals administer antibiotics before surgery. They look at how hospitals take steps to prevent blood clots. They look at whether urinary catheters are removed within two days of surgery. I’m not criticizing these metrics. I’ve written that they should be publicly reported, and each measure that has been reported to the public has improved significantly over time. But let’s not fool ourselves. None of them would flag Dr. Dinner. None of them would address what should be the fundamental question: Did the patient need the surgery?

  We tend to lump everyone together by focusing on a hospital’s overall quality. But that fails to address the variation that exists between types of treatment. In my pancreatic surgery specialty, the readmission rate is off-the-charts high (approximately 30%). That statistic holds true for me and all five of my partners, because that’s the nature of pancreatic surgery. For some reason, when God made the pancreas, he didn’t surround the organ with a capsule to protect it as he did with other organs. Cutting and manipulating the pancreas during surgery often causes it to leak at a high rate. It doesn’t matter who performs the surgery or how delicately the surgeon works. Following the operation, leaks are anticipated.

  My partners and I do more pancreas operations than any other group in the country. We use sound criteria and, given the type of surgery, we have great results that are frequently cited in journals and textbooks. But due to the way we currently measure quality, our
specialty’s unavoidably high readmission rate adversely affects the hospital’s overall readmission rate. This one-size-fits-all approach would mistake what my partners and I do for subpar work.

  The case of Dr. Dinner also exposes how our traditional way of measuring hospital quality misses issues of individual performance and their patterns.

  Cindy

  Recently, while catching a flight to Florida, I was exhausted, entirely ready to board my plane and relax. Unfortunately, the crankiest flight attendant on the planet happened to be on my plane. As I stepped on board, Cindy demanded I gate-check my small laptop bag. She claimed there was no room, but I could see there was plenty of space, especially in first class, where I was planning to enjoy my free upgrade. I asked if the flight included a drink service. “There is no time!” the attendant barked. I asked her for some water, which she plunked down on my tray half an hour later with a roll of the eyes. I felt like a FedEx package on a cargo plane.

  The other flight attendant on board was kind and thoughtful. “I’m sorry about her,” she apologized. “She’s been here a long time,” she whispered as she offered to get me a drink.

  The next day the airline sent me an email asking for feedback on the service I had received during my flight. Seeing that the survey was general, asking me to rate my overall flight experience, I didn’t complete it. I didn’t want to complain and risk getting the good flight attendant in trouble. It hit me that performance data at the group level may have no effect on an employee who’s causing problems. Yet that’s what we do in health care every day—we feed group data to individual staff, then wonder why it’s not having an impact.

  Imagine that Cindy’s supervisor informed her that the entire airline ranks below average in customer satisfaction. Or even if he said it was her individual flight crew. Would that information change her behavior? Probably not. She could easily dismiss the results and say “It must be other flight attendants bringing us down,” or “My customers are more difficult because they fly out of some of the world’s most frustrating airports.”