Cameron and Katlynn Fischer celebrated their April wedding in Colorado. But the day before, Cameron was in such bad shape from a bachelor party hangover that he headed to an emergency room to be rehydrated. That’s when their financial headaches began.
Courtesy of Cameron Fischer
Courtesy of Cameron Fischer
Two days before his wedding this past April, Cameron Fischer had one heck of a bachelor party, hitting a few bars in the Old Town section of Fort Collins, Colo., with his friends into the wee hours. The next morning, the 30-year-old IT professional from nearby Loveland woke up with a killer hangover.
“I couldn’t keep anything down,” Fischer says. “I just felt miserable.”
He was in such bad shape that, with their wedding day fast approaching, Fischer’s fiancée urged him to leave their rehearsal dinner in Denver and head to an emergency room to be rehydrated.
That resulted in an even bigger headache: a medical bill that was initially $12,460, all told. That was more than twice the cost of their wedding.
Fischer had run into a sobering fact about America’s health care system. With few constraints on how emergency rooms set prices, hospital systems have jacked up rates and coded patient visits as being more complex than they would have previously, which increases the payments they receive from insurance plans. The result: ER services have some of the fastest-growing prices in the health care system.
Many health economists think free-standing ER facilities, like the one Fischer visited — which are banned in many states but thriving in Colorado — are particularly culpable. While such ERs maintain that they can’t survive on rates paid by Medicare and Medicaid, data suggest they are profit-seeking engines built primarily in high-income ZIP codes.
“It’s because they’ve figured out that they can get away with it,” says Vivian Ho, an economist with the Baker Institute for Public Policy at Rice University in Houston.
Fischer might have avoided the big bill had he sought treatment earlier in the day. But by 7 p.m. on a Saturday, urgent care facilities were closed. He checked Google Maps for the closest emergency room and — clutching a trash can — headed to HealthONE North Suburban Medical Center, a free-standing ER in the Denver suburb of Thornton.
The ER appeared to be devoid of patients, with just a doctor and a couple of nurses on duty. Fischer told them what had happened and that he didn’t do drugs and doesn’t often drink.
“I knew exactly why I was there,” he says. “It wasn’t that I had some unknown reason for my symptoms.”
A nurse started an IV and gave Fischer two bags of saline and a dose of Zofran, an anti-nausea medication. She drew blood; Fischer says he wasn’t told what tests would be run on the blood sample. He was out of the ER within 45 minutes, feeling much better.
Facility fees as the price of entry
A few weeks after Fischer’s April wedding, he received the medical bill.
It included a $7,644 “facility fee.” That’s an expense that hospital systems charge to cover their overhead costs of keeping an ER open 24 hours a day and ready for any emergency.
Facility fees are set on a scale from 1 to 5, depending on how severe the patient’s condition appears during the initial triage. The ER rated Fischer’s visit as a 4, one of moderately high complexity, in terms of care needs.
“There are no limitations on the facility fees that they can charge,” says Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative, a nonprofit consumer advocacy group. “The facility fee for over $7,000 is simply obscene,” Fox says.
The Health Care Cost Institute, an independent, nonprofit health research firm, recently analyzed millions of insurance bills to get a better sense of the facility fees that ERs are charging. It found the charges nearly doubled from 2009 to 2016, outpacing overall health spending four times over. In Colorado, the average facility fee charged for a Level 4 visit grew from $1,064 to $2,336.
Insurance plans generally don’t pay the full charge but pay a negotiated rate for in-network hospitals. The Center for Improving Value in Health Care, which maintains a database of insurance payments in Colorado, found that insurance plans paid an average of $1,754 for a Level 4 facility fee in 2018.
Still, those prices pale in comparison with the fee charged to Fischer. “That seems like an outlier on the high end,” says John Hargraves, a senior researcher at the Health Care Cost Institute who led the ER study. “That’s more than triple what it was in 2016.”
Other studies have found that ERs are coding visits at the higher 4 and 5 complexity levels at higher rates than in past years. It’s not clear whether that reflects a deliberate attempt by hospital systems to increase payments or a shift in the type of patients who visit emergency rooms. It’s possible the growth in urgent care centers is siphoning off less complex cases.
Treatment costs for a hangover
The ER’s initial bill included $500 for a complete blood count — a test that the online price comparison tool Healthcare Bluebook says could be had for less than $20 in a doctor’s office. It charged more than $1,300 for a complete metabolic panel, a routine test that generally costs about $31.
The two liters of saline, which the ER billed at $700, are available at Walmart for $10.99 a liter.
And spa-like hydration services in Denver market IV fluids for hangover relief, consisting of the same combination of saline and nausea meds that Fischer received in the ER, for just $168.
The ER bill also included $970 for a drug test, something Fischer says he never consented to undergo. Medicare typically pays health care providers about $114 for the same test.
“When you look at the bill, obviously the prices are astronomical,” Fischer says. “But it was also the work that was performed without my authorization that was pretty frustrating.”
HealthONE officials say the prices at its ERs are higher than at urgent care clinics or other outpatient settings because the ERs are staffed by board-certified emergency physicians and cannot turn away any patients, regardless of their ability to pay. So paying patients who show up in their ERs subsidize those who show up and can’t pay.
“The move toward higher-deductible insurance plans has put a strain on many of our patients, but we understand their choice to pay a lower monthly premium, and we also understand their frustration with the larger out-of-pocket expenses they may experience as a result,” HealthONE North Suburban Medical Center spokeswoman Betty Rueda-Aguilar said in a written statement to Kaiser Health News. She adds that Fischer presented with symptoms of alcohol poisoning and had to be treated accordingly. The company declined our requests for an interview.
Emergency rooms tend to lose money on critically ill patients, as well as on Medicare, Medicaid and uninsured patients, says Dr. Jesse Pines, national director of clinical innovation for US Acute Care Solutions, which helps staff more than 200 hospitals and ERs. These facilities try to make up the difference with less sick, privately insured patients, like Fischer, Pines says.
“To make the economics of an emergency department work, those patients have to subsidize the system to make the difference balance out,” he adds.
But as more privately insured patients have high-deductible plans, he says, it has been harder and harder for hospitals to collect on their bills from patients who don’t pay.
Free-standing ERs, such as North Suburban, may have found a way to skew their patient mix toward those who can pay. A report from the Colorado Health Institute finds that free-standing ERs tend to locate in high-income neighborhoods. Residents there are more likely to have higher-paying commercial insurance, rather than Medicare or Medicaid, and are likelier than other patients to be able to pay for out-of-pocket costs their insurance doesn’t cover.
Colorado has more than 50 free-standing ERs, according to the report, trailing only Texas and Ohio. The facilities are licensed as “community clinics and emergency centers,” a designation originally developed to help rural and underserved communities in Colorado that could not otherwise afford inpatient hospitals. But the report identifies only eight free-standing emergency departments in rural Colorado — all in affluent ski resort towns.
For Fischer, the negotiated rates under his health plan knocked the $12,460 bill down to $4,694. The plan paid $2,102. That left Fischer with a bill of $2,593, an amount he says he cannot afford to pay.
“That’s quite the expensive bachelor party,” Fischer says.
Kaiser Health News is a nonprofit, editorially independent program of the Kaiser Family Foundation and is not affiliated with Kaiser Permanente.