Hospitals Bully, Mislead Patients on Bills, Study Suggests

The study shows that hospitals may discourage inquiries into bills by putting on a friendly face in their initial correspondence and conversations with patients, but those consumers who actually call for an audit of their bills may meet with explicit hostility.

More often than not, the hospitals' intimidation tactics were successful, and the hospitals didn't need to act on their threats, such as turning the bill over to collections agencies.

"Citizens are becoming more educated about hospital billing and taking the responsibility of insuring that their charges are correct," said the principal author of the study, Dr. Kimberly D. Elsbach of the Graduate School of Management, UC / Davis. "Hospitals are countering that with their own efforts to discourage people from becoming involved with challenges or audits because it costs them a great deal of time and money."

The study's most disturbing finding was that some hospitals try to prevent patients who call from launching a formal investigation of their bills by using intimidating images filled with threats. The threats are aimed at distracting consumer attention and evoking fear, even intimidation. These can include the threat of sending a bill to a collection agency if payment is not made promptly or the threat to increase the charges.

One hospital customer service representative told the researchers, "Patients are informed that audits of bills can go either way. Some charges may not have been posted and were inadvertently left off the bill. If there are charges that should be added we add them. We've had lots of patients come in on the short end of the stick [after such an inquiry]."

Hospitals also may use bureaucratic images designed to produce roadblocks that overwhelm consumers and invoke frustration, said the study. The goal is to persuade patients to give up on formal inquiry. One employee said, "I'm supposed to take steps to prevent patients from going up the ladder with complaints. I'm not allowed to give out administrators' phone numbers. I just connect them with another representative."

Hospitals also may use images that legitimate their billing practices to diminish consumer attention and invoke patient acceptance and prompt payment, said the study. Thus, they make common items on the bill appear more reasonably priced and format their bills like those of credit card companies and other organizations that have consumer acceptance. They also include enough technical information in bills to make patients comfortable with their charges -- but not enough to flag suspicious charges. An example of such a customer service reply would be, "One thing we do not have is an aspirin that costs $1.50. We try to make all generic items like Tylenol or Maalox cost close to market value."

The findings in the study echo some results of the "1998 American Customer Satisfaction Index (ACSI)" published in the February 15, 1998 issue of Fortune. Hospitals, along with airlines and news casting, were at the bottom of the Fortune index. Hospitals as an industry had only a 67 percent satisfaction rate, which was a 5.6 percent drop from the previous year.