Today, Explained - Sarah Kliff vs. Zuckerberg General

Episode Date: May 6, 2019

Vox's Sarah Kliff has been writing about surprise ER bills for a year, but the practices at Zuckerberg San Francisco General Hospital were unlike anything she had seen before. Her reporting changed them. Learn more about your ad choices. Visit podcastchoices.com/adchoices

You've probably heard me mention the Quip electric toothbrush before, but a new thing is that the Quip electric toothbrush has a new kids Quip. I'll tell you more about it in the middle of the show. For now, just know that you can find out more at getquip.com slash explain. That's G-E-T-Q-U-I-P.com slash explain, where the Quip starts at just $25 and your first refill pack is free. Sarah Cliff, you report on healthcare at Vox, and we have talked to you many times about ridiculous, inexplicable healthcare bills. Yeah. Hospital bills. Many, many a time. Bills that you have gotten forgiven and reversed, yes? Yes. I think my tally is about 100,000 and

counting. Amazing. Thank you. Do you have like a spreadsheet? No, I wish I had like one of those big clocks or something or like one of those big like thermometers that fills up. I don't. I should get one. We got to get you one. But we're having you back because now you've like upped your game to getting an entire hospital to change its policies. I did.

Yeah. And maybe even like a state to change its policies. And, you know, one of the largest states in the nation, too. The biggest state in the nation, though. The biggest state in the nation. Well, so I'm not sure if Texas or bigger, but. Geographically, population, California is the winner. Yeah.

I did it all to get a new Today Explained episode. Yes. Here we go. Sarah, how did this start? This starts with a email that is sent to me in December from a listener of a Vox podcast I host called The Weeds, who says, my girlfriend has this crazy medical bill. She was in a bike crash and she owes the hospital $20,000. And we're in California. And I emailed back, oh my gosh, is this Zuckerberg San Francisco General?

And he said, yes. Zuckerberg of the Mark Zuckerberg. Yeah. So of Facebook founder fame, there is the biggest public hospital in San Francisco. It's been around for decades, much longer than Facebook. But Mark Zuckerberg and his wife, Priscilla Chan, donated a lot of money to the hospital. It became Zuckerberg San Francisco General. And I've been working on this project at Vox for

about a year and a half now where we've been collecting emergency room bills. And I started seeing something kind of odd from this one hospital, Zuckerberg San Francisco General. Their bills were different from the bills of hundreds of other hospitals in that they were out of network with private health insurance each and every time. And what does that mean? So when a hospital is out of network, it means that they don't have a negotiated contract with insurance plans. Usually, like if I have an in-network doctor, it means that my insurer and my hospital, they like sat down at some point. They hammered out, OK, here's how much it costs if like Sarah has to go to the emergency room.

Most emergency rooms are always in network because of the type of care they provide, right? Like when you're going to the emergency room, you can't really shop. And the thing that was really odd is I kept seeing these bills from Zuckerberg, San Francisco General, where the hospital was not in network with the health insurer and the patient had tens of thousands of dollars in medical debt. And when this podcast listener emailed me, the woman who the bill belonged to, her name is Nina Dang. She lives in San Francisco and she was involved in a bike accident last year. She's not totally sure what happened. She thinks she passed out on her bike. You know, the next thing she remembers from bike riding is waking up on the ground. She's transported to the hospital by ambulance.

She's semi-lucid. She's getting things wrong about where she lives. And then she's treated in the emergency room. She leaves with her arm in a sling, a recommendation to get surgery. She ends up being billed $24,000 for that encounter. Her insurance pays about $3,800, and that leaves Nina with a $20,000 bill. And to be clear here, the treatment she got was they put her arm in a sling and took some x-rays? They took some x-rays, yeah. I mean, that's most of it. They triaged her. You know, they made sure she was okay.

I believe she had a CAT scan as well. But it was basically some scans, a sling, and a recommendation for additional care. How does that equal $24,000? Well, that's the price the hospital wanted to charge. And because they didn't have a negotiated rate with the insurance company, that is what they did charge. When the insurance company got this bill, they look at it and they think, OK, for the care that was delivered, $3,800, that seems like a fair price. The hospital thinks, OK, we'll take that $3,800 and you, Nina, you owe us the other $20,000. She did appeal this to the insurance company.

She asked them to pay more money. The insurance company said no. And that essentially leaves Nina the one responsible for the $20,000 bill. At the point I got this bill, the city, which oversees and owns this hospital because it's a public hospital, was threatening to send her bills to collections if she didn't pay it soon. Which could ruin her credit for years. Exactly. Yes. Why did Zuckerberg operate this way? So I talked to their spokespeople before this story ran, and they basically said,

look, we are the public hospital. We see so many indigent patients. We're dealing with people who are low income, who might not have insurance. Our focus is 100% on people with public insurance, people on Medicaid, which covers low-income Americans, people on Medicare, which covers the elderly. We don't want to go and network with private insurance because we want to make sure there's enough hospital beds for the people who can't afford to get care at other hospitals. And I think that rationale actually makes a lot of sense for like the hospital side of Zuckerberg, San Francisco General, for like inpatient surgery, for example. You do want a place that's going to accept Medicaid patients. And some hospitals, because Medicaid, which covers low-income Americans, tends to pay less, some hospitals

won't work with them. I think, however, that logic breaks down in the emergency room setting, particularly the role that Zuckerberg plays in San Francisco. It is the only level one trauma center in the entire city. So if you have a trauma in San Francisco and a trauma could be like falling from a high height, being in an especially bad car accident, you are going to be taken to this hospital. Like you will not be taken anywhere else if the EMTs who get you decide this is a trauma case. In that case, you know, they're serving the entire city. They're not just serving people with public insurance. They're serving people with private insurance who have a traumatic event. And, you know, other public hospitals I've reported on, they'll often keep their hospital out of network with private insurance,

but they'll keep their emergency room in network because they understand emergency care is just a different beast. And San Francisco General is making this very unique and surprising decision to keep their ER out of network. And, you know, I came across at least a half dozen bills of patients with more than $10,000 of medical debt from going to the emergency room there. Did Mark Zuckerberg notice? Did he have to say anything about this?

You know, I've reached out to his communications people. They decided not to comment for the story. I have not seen him or his wife, Priscilla, comment on the story, but the article was shared very widely on Facebook. So maybe it came up in like his newsfeed at some point. But the hospital decides to make changes. They do. They do. And it starts small and gets bigger.

The first thing they do is they drop Nina's bill. She owed about $20,000. She gets a call from their patient services department saying, the bill's gone. You're only responsible for the $200 copay that you already paid. Wow. Not an insignificant reduction. Not an insignificant reduction.

The other thing they do is they announce they're going to take 90 days to review their billing policies and come up with a better way to bill patients. You also see the San Francisco City Board of Supervisors, which is essentially their city council, say they are going to have a hearing about these issues. They are responsible for overseeing this public hospital. And it's actually under their leadership that they let the prices get pretty, pretty high. You asked earlier why the price is so high. One of the reasons is because the city of San Francisco has been approving some pretty high charges for the hospital. And some of the members of that board who I interviewed later say, yeah, we kind of let it get away from us.

We were just approving these year after year. We didn't realize things had gotten so out of hand. So they had a hearing in February to take a second look at the issue. So how does the hospital actually change? What does it look like now for someone who falls off their bike and goes in there with an arm sprain or break or tear or something? So it looks pretty different. The hospital announced in mid-April their new billing policy, the one they were going

to use those 90 days to come up with. Yeah. And they have decided to end this practice known as balance billing. This is when the insurer doesn't pay as much as the hospital wants, so they go after the patient for the balance of the bill. So they are going to stop doing that. They put caps on how much patients can be billed depending on how much they earn. And so those are the two kind of major changes. And they do go back for anyone who has an outstanding bill with the hospital.

This will apply to their bills. Yeah. So do you think they would have been making these changes if it weren't for your reporting? I don't think so. And I don't think it was just my reporting. I do want to give credit to a reporter at the San Francisco Chronicle, Heather Knight, who's also been doing wonderful reporting after I brought up this issue. You know, I think between the two of us writing these stories, no one had really pieced together Chronicle, Heather Knight, who's also been doing wonderful reporting after I brought up this issue.

You know, I think between the two of us writing these stories, no one had really pieced together that this was such a problem in San Francisco. The patients I'd interview often thought, oh, this is just like some weird issue with my insurance. This can't be the way it works in our city. And then I think the thing I was able to do by reading on these ER bills is figure out, oh, this is the way it works in the city. But there is no evidence that they were looking to change these policies. When I brought it up with their spokespeople when I was reporting the original story, I didn't get anything like, oh, wait, this policy might not make sense. They framed it as that's just kind of an unfortunate side effect that some rich people are going to have big bills. This particular hospital here seems like a unique case. You said their billing practices were a little abnormal. It's got one of the most famous people in the world's names attached to it.

Is this happening elsewhere? And are other hospitals going to make changes too? Are they going to follow suit? I don't think there's a lot of hospitals doing the exact same thing that Zuckerberg's been doing. I think there are plenty of hospitals that are billing patients in really aggressive, really terrible ways. So one of the things we know from some academic research is that one in five emergency room visits involves a surprise bill. So that's like a case where you go to the ER, the ER is in network, but like the doctor who saw you isn't or the anesthesiologist isn't or whoever. Those are different than Zuckerberg. In the case of Zuckerberg, the emergency room itself was out of network, but they still result in really, really significant bills.

And what the academic research tells us is those bills aren't equally distributed across hospitals. It's not like across America you have equal odds of getting one of these bills. It's at a small number of hospitals they engage in this kind of behavior really, really aggressively. Progressively. California wants to change its laws around ER billing thanks to Sarah's reporting. After that, who knows? Maybe even the federal government will do something. That's after the break on Today Explained. Brendan Basilio, you work here at Vox Media. Yes. You recently came up on a quip. Yes. The first thing you noticed when you looked at it was the logo of the Quip.

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Maybe I'll go get another one. You can go get your own Quip. Can you repeat that? getquip.com slash explained. That's the website. I'll get it. Sarah, we talked about at the top of the show how this hospital actually changed its policies after your reporting, but also the biggest state in the nation might change its policies. Tell us how that happened. And there were some members of the California Assembly who represent San Francisco who decided they wanted to introduce a law that would prevent this kind of billing practice statewide.

So there's a bill that's going through the Assembly right now. It passed out of committee in late April that would essentially bar emergency rooms from being out of network in the way that Zuckerberg was. One of the reasons this is interesting to me is California already had some of the strongest protections against surprise billing in the entire country. What do they have on the books already? So for most California residents, they are protected against the type of surprise bills I was talking about earlier.

You go to an in-network hospital, turns out your anesthesiologist is out of network. You know, if you live in Texas, that anesthesiologist can send you a very big bill. If you live in California, they are not allowed to do that. You know, they have some certain caps they've set in law for how much they can be charged, and it all runs through the insurance company instead of through the patient. One of the things, you know, I think my reporting did is it showed a hole in that the law never really prevented emergency rooms themselves from being out of network.

So what these legislators are trying to do is close that hole and make sure that those kind of protections exist both for surprise bills from doctors and surprise bills from the hospitals themselves. That seems like a pretty huge oversight if the intention was to protect people from these kinds of bills. Yeah, it is and it isn't. You know, the surprise bills from doctors are much, much more common. Like I mentioned earlier, about one in five ER visits results in a surprise bill. That same data set shows that only 1% of emergency room visits happen at out-of-network ER visits. It's

just a much less common problem because most hospitals make the decision to have their emergency rooms in network with a wide array of health insurers. So if it's not that common, does that make it easier to pass a bill like this? You know, I think it's one of the lower hanging fruit when I think about like health care legislation. And I think that that is good in terms of its odds of getting passed. I think that is bad in the terms of fixing the problem of the madness of American billing. I think they'll patch up this hole. But if I've learned anything reading all these hospital bills, it says hospitals are always coming up with new and different ways to bill patients that patch up this hole. But if I've learned anything reading all these hospital bills, it's that

hospitals are always coming up with new and different ways to bill patients that I don't think this is all of a sudden going to make health care affordable in California. What about the federal government? We talked to you last year about a bill in the Senate that could potentially outlaw these kinds of emergency bills and others? Did anything happen there? It is still in the Senate. So there's been definitely more movement, particularly in the Senate, a little bit in the House here in D.C. to pass some kind of legislation around surprise billing. Right now, there's actually now two different bills in the Senate, one offered by Senator Cassidy, a Republican from Louisiana. Another offered by Senator Maggie Hassan from New Hampshire, a Democrat. Both of them aiming to end surprise billing.

Both of them getting support from people on different sides of the aisle. And they've essentially joined up in a kind of bipartisan working group trying to tackle this issue. I think one of the reasons I'm optimistic something will happen is that you have Republicans and Democrats agreeing surprise bills are a bad idea. And because we've seen action at an individual hospital and on the state level, action from the federal government would make some sense here? Yeah, and I think it's important to understand the way insurance works of why federal action is so necessary. So big health insurance plans, ones, you know, like, let's say like Vox, that have employees in multiple states, they're regulated at the federal level. And that means only Congress for people who have these big employer-sponsored health plans, it's only Congress that can step in and do something

about these problems. They are the ones who set the ground rules. In California, for example, they have wonderful protections for people who are in insurance that is regulated at the state level. They also have a bunch of people in California who have insurance that is regulated at the federal level. It is a really confusing landscape. So it would be a pretty big deal if Congress did this because it would help states that want to protect against surprise billings but only have the ability to regulate one subset of their plans. It would help them make sure everyone has really good protections against this. And is there any chance that it might get the kind of support that it has in California where you see bipartisan, unanimous support? I think there's a chance.

I think you see Republicans and Democrats agreeing on this is an issue where patients are just so stuck that you don't know that this person is going to be out of network. You're in an emergency situation. So I think the fact that it seems so wrong to people on both sides of the aisle makes me optimistic that it's a place where you could find support and that you have people genuinely interested in working on this issue. That's encouraging to me. And to go back to what you said at the top, you've gotten something like $100,000 worth of bills reversed yourself. How many bills have you seen? I think about 1,600 of the 2,100 we've collected. Wow.

Yeah. So you spent a lot of time looking at bills. Oh, have I ever. What is the, like, larger story that all these bills tell about health care in America? So there's this one bill that I haven't been able to stop thinking about that just I feel like tells you so much about how health care works in our emergency rooms in the United States. It was from a woman in Kansas. And the bill she sent me was from a visit her husband had had. I don't even remember what he was in the emergency room for, but they had a $1,200 bill.

They weren't sure how they're going to pay it. And then their two-year-old daughter by accident eats a drug she's not supposed to, a prescription drug. The mom calls the poison control hotline and they say, oh, you need to take your daughter to the emergency room. You need to get her checked out. You know, she could overdose. And the mom is thinking, well, I haven't even paid this first bill. Like, I cannot afford to go to the emergency room. So what she does next is

she takes her daughter and she drives to the emergency room, but they don't go inside. They sit in the parking lot for hours and they watch The Little Mermaid on repeat. And the mom is thinking, OK, if she has a reaction, I can like sprint in and like carry my daughter to the a reaction. After a while, they kind of drove back home. But it just showed me, you know, one, like what a terrible decision for any parent to have to make. And it showed me how these high bills really weigh on Americans. One of these things that comes up a lot in the health care debate is this idea of rationing health care. That, oh, in the UK, because they have single payer, they're rationing, they're deciding who gets health care and who doesn't. This is what rationing looks like. Like, this mom is rationing health care for her toddler because she doesn't know how to pay for that health care. So they're sitting outside the emergency room watching The Little Mermaid, hoping that nothing goes wrong. And it just, it was really upsetting on a personal level to read

about this. And I don't know, that bill, one bill is like stuck in my mind because it really shows how these high prices, it's not just the bills that people are getting and their difficulty paying them, it's affecting their decisions to seek healthcare that they might actually need. Sarah Cliff is a senior health correspondent at Vox. She also hosts a Vox podcast called The Impact. I'm Sean Ramos from This Is Today Explained. Thanks to Quip for supporting the show today. You can find out about the new Kids Quip at getquip.com.

Over a million people have purchased the Quip from websites just like that one. Getquip.com. The Quip starts at $25 and your first set of refills is free right now.