Monday, December 12, 2005


  • California HealthCare Foundation Briefing on Wednesday, December 14th, in Sacramento
  • Verdict on Hospital’s “Voluntary Guidelines”; AB774(Chan) Legislation Pending
  • Implications for So-Called “Consumer-Directed” Health Plans
Shedding new light to the debates about hospital overcharging practices and so-called “consumer-directed” health plans, the California HealthCare Foundation will release a new study on hospital pricing issues later this week. The Foundation commissioned a “mystery shopping” firm to send would-be patients to dozens of hospitals throughout California, to ask about prices and financial assistance policies.

The California HealthCare Foundation will present the results of this unique study will be presented this WEDNESDAY, DECEMBER 14th, 2005, from 12:30pm-2:00pm in ROOM 112 of the State Capitol in Sacramento. Reactions will be provided by Health Access and the California Hospital Association. Lunch, coffee, and beverages will be served. Please RSVP to Katie Sacco at the Government Action & Communication Institute, at, or at 916-966-6643.

The issue of hospital pricing has reached national attention over the last few years, with Congressional inquiries, class-action lawsuits, and pending legislation. Uninsured and underinsured patients get charged multiple times what insurers and government programs pay for exactly the same treatment. As a result, these inflated bills–which hospitals admit are not related to the actual cost of providing care–are sent the patients to collections, court, and bankruptcy. This not only ruins the financial future of these families, but also discourages uninsured people from getting the care they need, for fear of the bill.

BILLS: State legislators have proposed consumer protection bills, such as AB774(Chan), sponsored by Health Access California, and which is currently pending in the Senate Health Committee. Click here for a fact sheet:

VOLUNTARY GUIDELINES: In an effort to prevent legislation, the California Hospital Association adopted a set of “voluntary guidelines” in February 2004 on issues of hospital pricing, billing, collections, and financial assistance. They are available here:

GOVERNOR’S VETO: Last year, the California legislature was the first in the nation to pass a bill to prohibit hospital overcharging and provide other consumer protections, such as a moratorium on having hospital bills sent to collections prematurely. With significant hospital opposition, this bill, SB379(Ortiz), was vetoed by Governor Arnold Schwarzenegger, saying that “the voluntary guidelines must be given time to be implemented and reviewed.” In his veto message, the Governor left open the possibility of revisiting legislation if the guidelines were not followed, saying, “Nevertheless, it is my expectation that all hospitals in the state uphold their important commitment to the voluntary guidelines and that they are applied evenly, consistently and without hesitation.”

REPORTS: There were indications last year at the time of the veto that the voluntary guidelines were not working. Health Access worked with volunteers and community organizations to survey 40 hospitals around the state, to look for compliance with the guidelines. Only one hospital met all the criteria; just half met the modest effort of posting a sign in the emergency room to alert patients to the possibility of financial assistance. The Health Access report is available here:

Now over a year later, the independent California HealthCare Foundation will report at this briefing on the result of its “mystery shopper” survey. Perhaps anticipating further scrutiny, the California Hospital Association has put out its own survey with regard to compliance with the “voluntary guidelines.” Even though the California Hospital Association sent this survey to its CEOs, less than half responded, suggesting that everyday patients are getting far worse treatment when asking their questions about financial assistance policies. Their hospitals’ survey and defense of their practices is available at:

GROWING ISSUE: This continues to be a major issue among policymakers. Just last week, the Assembly Revenue and Taxation Committee, chaired by Assemblyman Johan Klehs, held an informational hearing on the community responsibilities of nonprofit hospitals, given the millions they received in nonprofit tax breaks. Testimony was given by groups such as California Budget Project, Consumers Union, Health Access, and SEIU, as well as by Kaiser Permanente, Catholic Healthcare West, and Sutter. This additional scrutiny has come from both policymakers in both major political parties. Community efforts in San Francisco, Sacramento, Contra Costa, and other locations have raised this issue with regard to their local hospital’s conduct.

CONSUMER-DIRECTED PLANS: The issue will only grow, not only with the number of uninsured, but also with the increasing rise of underinsured. Those with high-deductible plans are also finding that they are self-pay patients, who don’t have the benefit of a negotiated rate by an insurer or government program. The theory behind such plans is that by making patients cost-sensitive to getting care, consumers will make more efficient choices. Yet even for procedures that are not emergencies and where there may be time for comparison shopping, it is hard for patients to get basic pricing information from a hospital, even with a recently-passed law, AB1626(Frommer) to disclose chargemasters. The current system of hospital pricing, with its lack of consistency and oversight, raises serious concerns about the value of “consumer-directed” plans, other than as a way to shift costs onto consumers.

MEDICAL DEBT: The result is that more patients, insured and uninsured, are suffering under medical debt. Nearly half of personal bankruptcies are related to medical problems and medical bills. While the uninsured and underinsured pay the most for not just hospitalization but other health care treatments, like prescription drugs, the bill that comes from the hospital is likely to be the biggest bill a family will get in their life. In the new year, Health Access California and other consumer groups will be working on a range of bills to prevent the growing issue of medical debt, to remedy both the financial and health consequences.
Health Access California promotes quality, affordable health care for all Californians.
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