A hospital in California is offering a discount on the medical bills of people who pay the bill promptly. This offer is good for people who have insurance from companies that quickly pay the hospital what it is owed, as well as for people who pay their medical bills on their own. This says quite a bit about the delay that insurance companies impose on hospitals whom they owe money to.
Health care is expensive. This, in turn, makes health insurance expensive. The main reason why people buy health insurance is because they want to receive some financial assistance with their medical bills. Most of the time, a typical health insurance policy will pay for preventative health care, and at least part of other types of medical treatment.
Health insurance doesn’t usually pay for absolutely all of a person’s medical bills, however. This means that a person is still going to be responsible for paying some money to the hospital that they were treated at.
Marin General Hospital, in California, is doing something rather unexpected. They are giving a discount to patients who pay their bills promptly. This means that if a patient has health insurance through a company that manages to quickly pay the hospital, that patient will receive a 25% discount on his or her medical bill from the hospital.
It also means that people who don’t have health insurance, but who do pay their medical bills on time despite their lack of insurance, also are eligible for a discount. In this case, the discount can be as much as half of the original price of the bill.
For example, Marin General Hospital has started providing a 40% discount to patients that don’t have health insurance. If that patient pays the bill quickly, then Marin General Hospital will take another 10% off the bill.
Why would a hospital offer a discount on the medical bills of patients who are able to pay their bills promptly? One reason is that it actually saves the hospital some money. If the bill gets paid fast, then the hospital doesn’t have to spend money to have people deal with billing the patient, or with tracking down the patient’s insurance company, in order to finally get paid.
Another reason is that the hospital is trying to find a way to not have to wait on payment as insurance companies drag their feet about paying the bills. Typically, when a hospital sends a bill to an insurance company, that company can take anywhere from 60 days to 180 days to get the payment back to the hospital. After that, the hospital can figure out how much of the bill is left over, and then can start trying to bill the patient for it.
Image by Steven Depolo on Flickr