News 4 Investigates: The hidden cost of medical care - KMOV.com

News 4 Investigates: The hidden cost of medical care

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(KMOV.com) - News 4 Investigates has been working for several weeks to uncover and explain a confusing and troubling aspect of the policies hospitals use to determine what patients will be charged for services and medicines.

The investigation began with the case of John Wirtel of Dittmer in Jefferson County.  Several weeks ago he was bitten by a copperhead snake.  He went to Mercy Hospital in Creve Coeur where he was treated with the anti-venom drub, CroFab.  Wirtel was given six vials of one gram each for a total of 6 grams.  The bill for the CroFab was $56,548.80.  Wirtel called the hospital thinking there was a mistake but he was told the charge was correct.

News 4 contacted Mercy Hospital to ask about the charge and were sent this statement:

CroFab - Crotalidae Polyvant Immune Fab (Ovine) - is a drug that has a short shelf life and isn’t used often. Mercy tries to have it available for our patients though there have been shortages of the drug nationally recently. Both of these factors do contribute to the higher cost of the medication. 

News 4 then tracked down the company that makes the drug, BTG in London, England and asked a spokesperson there about Mercy’s claims that the high price of the drug was due to shortages and short shelf life. News 4  also asked BTG for the sale price of 6 vials of CroFab.  BTG sent this statement:

I can confirm as previously stated there is no shortage of CroFab® and any US hospital can place an order and will rapidly receive product. I can also confirm that the shelf life of CroFab® is 36 months when stored according to instructions under refrigeration at a temperature of 2°C to 8°C. In addition, you may find it helpful to know that six vials of CroFab® would have been sold to the hospital by BTG at a total cost of under $14,000.  

Given this information from BTG, News 4 asked Mercy again if there might be another explanation for charges billed to Wirtel.  This time News 4 received a far different response:

This situation is an example of one of the shortcomings of the U.S. health care system. As a hospital, we are morally and legally obligated to provide care for all patients in need, both those who can afford to pay for their care and those who cannot.  In order to remain effective in serving the community and keeping people healthy, like other hospitals in our area, the prices we charge for our services – including medications – are adjusted to allow us to cover the cost for those who are unable to pay. While many feel this is unfair, unfortunately it is the system of care that exists in our country today. We play a vital role in meeting the health care needs of many with and without insurance coverage across our region, and must make sure we can continue in that role.  

CroFab is what we call a rescue drug, used only when a rare incident happens. While the shelf life might not be “short,” it’s relative when compared with its frequency of use.  Even if it has a shelf life measured in years, vials often go out of date before they get used. However, we still need to keep these critical rescue drugs available despite this risk of inventory expiration. 

In addition to providing appropriate care to all patients in need, we offer financial assistance including charity care for those who qualify. Information regarding our charity care program is listed on patient statements as well as online. We strongly encourage this patient and any others to reach out to our financial counselors who can help when issues arise. We also encourage anyone without insurance to connect with our certified application counselors for information regarding insurance enrollment. 

The Mercy spokesperson basically said that hospitals sometimes charge “adjusted” (in context that means inflated) prices to patients in order to make up for losses suffered when treating patients who have no insurance and no means to pay.  Dave Dillon, the spokesperson for the Missouri Hospital Association, said essentially the same thing. 

Dillon called it “the hidden healthcare tax.”  He went on the say that hospital prices are “like the sticker price on a car.  It exists, to be able to understand the value, but no one pays it." 

An extremely important aspect of this story is the fact that Wirtel did not have insurance when he was treated for the snake bite.  Dillon acknowledged that it is patients without insurance, but who do have some means to pay, are the ones who are most likely to be charged adjusted, or inflated, prices.  This is because patients with insurance will be charged the negotiated rates agreed to by insurance companies. 

In the case of CroFab, sources tell News 4 Investigates that the average reimbursement rate for 6 vials would be about $15,000, which is just about what the hospital would have paid for it, according to the manufacturer.

Mercy, like all hospitals, works with patients who have no insurance or who otherwise would have difficulty paying large bills.  In Wirtel’s case, his total bill was more than $60,000.  Mercy discounted it by $22,000, leaving Wirtel with a final bill of more than $41,000.  Wirtel points out that is more than he makes in a year. 

The solution?  Dave Dillon tells News 4 Investigates this is very real and serious issue for hospitals and their patients.  He believes it will not be corrected unless and until all Americans have some type of health insurance.  Of course, it doesn’t appear that will happen anytime soon.

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