Trying to define the market value of someone’s professional services is difficult when those services are typically paid at vastly different rates, depending on the payer, especially when the party paying is usually not the direct recipient of the service. So when an emergency physician provides clinical services to a patient, how are those services valued by different payers, and what does that say about the reasonable market value of those services?
For example, let’s say that you come to the emergency department with an acute asthma attack: you can’t breath well, and your inhaler hasn’t helped to break the attack. A pretty straight-forward case, really: your ER doc does a history and physical exam, orders up some oxygen and a few respiratory therapy treatments, some steroids, perhaps an IV to rehydrate you and get access in case your condition worsens and you need IV meds, and returns to re-evaluate you every 15 minuets to make sure the treatments are working. Two hours later, you are able to go home with a script for three days of Prednisone and a refill for your Ventolin inhaler as the one you have is running low. You get instructions on how to care for yourself at home, when to see your primary care doctor, and what you should do if the wheezing comes on again despite the treatment. Chances are, you will likely get a charge for this service from the physician for 99284 level care for around $320, give or take, if you live, let’s say, in central California.
If you didn’t have insurance, you would be expected to pay the full charge. Unfortunately, many patients can’t afford to pay; or could afford to pay but are just irresponsible, and don’t pay anything. If the patient pays nothing, the emergency physician may be able to recover about $45 from the EMS Fund, a tobacco settlement funded program that pays on average about 15% of the emergency physician’s fee.
However, if you were uninsured with a family income at or below 350% of the federal poverty level; or you are insured and have incurred high medical costs (greater than 10% of family income over the prior 12 months) with a family income at or below 350% of federal poverty, and you submitted a request for a discount; you would (by virtue of California law) only have to pay 50% of median billed charges of a nationally recognized database of physician charges, probably around $150.
If you were covered by your County’s new Low Income Health Program (a family of 4 making less than $41,000/year), the county may pay the emergency physician about 30% of the Medicaid rate, or a whopping $21.
If you were covered by California’s Medi-Cal program, one of the lowest paying Medicaid programs in the country: $68.
If you were covered by Medicare: the federal program would pay about $125.
If you had HMO coverage, but had to go to a closer out-of-network ER, your HMO would pay the ER doc between $140 and $250.
If you had PPO coverage, the plan would pay between $175 and $240, minus any co-insurance payment, and you would have to pay the rest up to the $320 charge.
So, for a $320 emergency physician service, the emergency physician might receive anywhere from the full $320 down to $21, and about 10% of the time – nothing. The average emergency physician in California provides about $140,000 a year in unreimbursed care.
Of course, in order to provide these services, the emergency physician has to spend $10 to pay for malpractice insurance, $30 for billing services, and additional costs for other overhead amounting to a total of about $55 for every ED patient treated (even if the payment is $0)
So, what’s the real market value for an emergency physician’s services? I would argue that it is the full amount that the emergency physician charges, as long as these charges aren’t significantly higher than what other emergency physicians in the same area charge, but then I just paid a heating technician $175 for 10 minutes of maintenance on our furnace. Others would argue differently, but their estimate would be based on their particular agenda: protecting those living in poverty, reducing costs for the employer, dealing with government budget deficits, or making higher profits for the insurer. Unfortunately, none of these advocates actually provides emergency care to anyone.
By the way, if you were suffering from a heart attack or serious injury, and the emergency physician (and his team) actually saved your life (it happens hundreds of times every day), the emergency physician’s charge would be around $800 to (rarely) $2000. So, what’s the real market value of YOUR life?