How do consumers respond to surprise medical bills?

You often hear stories of patients who visit an in-network hospital and still receive a large medical bill because one or more providers involved in their care was out-of-network. Although this phenomenon of “surprise billing” has become common, no research, until now, has examined how consumers respond to surprise bills and alter their health-seeking behavior.

A new study in Health Affairs investigates how mothers respond to receiving a surprise medical bill after delivering their first child. Patients respond to surprise medical bills the same way they respond to bad meals at restaurants: by switching to another facility the next time they need services. Mothers who received a surprise out-of-network bill for their first delivery had 13 percent greater odds of switching hospitals for their second delivery compared to those who did not get a surprise bill.

Do women who receive a surprise bill for their first delivery choose another hospital for their second? 11% received a surprise bill for first delivery. These mothers had 13% higher odds of switching hospitals for their second delivery than those who were not surprise billed. 19% switched hospitals for second birth.
(Image: Leonard Davis Institute)

After visiting an in-network hospital and seeing an in-network primary physician, patients and families often assume that the entire visit will be covered by their insurance plan.

However, previous research has shown that in one of five emergency inpatient admissions and in nine percent of elective inpatient admissions, the patient is billed by an out-of-network provider when they neither expected nor chose to get out-of-network care. This market failure, where patients cannot possibly shop on the basis of network inclusion, has led to the emergence of state laws to protect patients financially in the event of a surprise out-of-network medical bill.

Read more at the Leonard Davis Institute.