Covered by insurance

Is it true that bills are often jacked up when there is insurance coverage? This final instalment of Articles of Law explores this issue.

IN the past, people often sought treatment at government hospitals or government clinics. But today, a large part of the population seeks medical treatment at private hospitals, clinics or medical centres.

This is not to say that private hospitals did not exist in earlier times. However, in those days private hospitals were set up with the single goal of caring and providing for the sick outside the framework of government hospitals.

Such hospitals were non-profit organisations. Non-profit as it will be known does not mean that no profit is made on an individual transaction. Rather, it means that any profits made are not distributed to shareholders but ploughed back to serve and advance the objectives of the organisation involved.

Today most private hospitals are public listed companies. And a company means business. By its basic definition, a company is an association of people whose objective is to make profits for its shareholders. Whether this definition is still true today is another matter, in view of the fact that the top executives and management get a bigger slice of the earnings compared to shareholders who may end up with little or no dividends in many cases.

When a person goes to a private hospital, he has to pay out of his own pocket. In some cases, the charges incurred by the individual involved can be as traumatic as the illness itself.

Of course, this trauma may well be avoided if it is the employer who is footing the bill or the charges are covered by insurance which the individual had purchased earlier.

Whilst insurance cover can provide a source of comfort, there are other aspects to the matter. This is because there have been complaints that those with medical insurance coverage are being overcharged. In fact, according to a recent newspaper report, "The Health Ministry is investigating complaints that patients with medical insurance coverage are being overcharged by private hospitals."

Health Minister Datuk Seri Liow Tiong Lai has been quoted as saying that hospitals must not discriminate between patients with insurance coverage and those who pay on their own, adding that he had received complaints of such practices.

The question that arises is: Does one get charged more if the amount is paid for by the insurance company?

Can it be true that there could be a difference in charges between patients who are paying the bills themselves and those who are covered by medical insurance coverage? It is unlikely that there will be a satisfactory single answer to the question. The hospital will insist there is no difference or discrimination whatsoever.

The hospital will, in fact, be able to itemise the services that have been rendered, medications which have been prescribed as well as procedures carried out which add up to the amount charged. These are matters which the hospital personnel and doctors involved are in the best position to confirm. So it can be very difficult to dispute the bill.

Furthermore, the charges imposed are a matter of contract between the patient and the hospital. If the charges are based on the rates that the hospital imposes, that is what the patient agrees to because he went there voluntarily for the said services.

There are a few things that can be said about the person who is covered by medical insurance, from the point of view of the hospital as well as the individual concerned.

In some, if not most private hospitals, there seems to be a certain enthusiasm to know at the very outset whether the patient is covered by insurance. Some may say that such enthusiasm is quite unnecessary. This is because a person who goes to a private hospital knows that he has to pay for the services. So what difference does it make whether he has insurance coverage or not?

On the other hand, many patients who have medical insurance coverage will be happy to disclose this at the outset. They do not have to be involved in knowing what has to be paid unless there is a differential involved. Many patients may not want to care for the possible excess because it is the insurer who is going to pay.

But this indifference can have consequences. In some cases, the cover may be for a limited amount. Bills which are higher than they ought to be will result in the limit being reached faster and the cover coming to an end earlier. What can a person do to avoid such a situation?

One way out is for the patient to declare that he is paying the bill himself. Having settled the bill, he can then proceed to claim the allowable sum from the insurers. Of course, this may not be an option for a person who does not have access to the required funds.

Then there is the post-hospitalisation period. There are cases where follow-up consultations are needed.

Here again, those whose financial resources are stretched could help themselves by buying the drugs from pharmacies. In some cases, the costs could be much lower. Of course, where the drugs are not expensive, the difference may not be worth the trouble.

This discussion has been mainly in the light of medical insurance coverage in relation to private hospitals. But there seems to be a general perception that whenever an insurance company is paying, the bill will be higher compared to when the individual is footing the bill himself.

The same situation applies to the motor insurance industry. Some readers have experienced a situation whereby the quotation given by an independent repairer for repairs following an accident, is lower than the quotation from a company which sits on the panel of insurance companies.

However, whether this is mere perception or the situation really exists is a matter for readers to reflect on, based on their own experiences.

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