But, the prize for the most outrageous trauma activation fee probably goes to Lawnwood Regional Medical Center in Florida. Eric Leonhard was wheeled into the ED at Lawnwood with a broken pelvis — and wheeled out again in less than an hour because they didn’t have the right specialist to treat him. But that didn’t keep Lawnwood from billing him for $32,767, which comes to about $800 per minute.
There is nothing inherently wrong with charging a standard fee to ED patients on top of whatever services they consume. Operating a trauma center is expensive, and hospitals must cover their costs. A trauma activation fee is like a “cover charge” for being wheeled into the emergency room with a major trauma.
But something is clearly wrong with the amounts of these fees and how often hospitals assess them. There can be no ethical justification for, in the case of Jeong‐whan, charging $18,836 for a physical exam. Insurers negotiate many of these fees down, but the prices can still be outrageous. For patients who don’t have a health plan that negotiates lower rates with the hospital — either because the hospital was out‐of‐network or the patient was uninsured — the trauma activation fee can be a terrifying surprise that destroys a patient’s credit rating.
While the abuse of “trauma fees” is scandalous, it’s also a drop in the bucket. In a recent book, we chronicle hundreds of examples of how bad policy allows everyone in the health care system — hospitals, doctors, pharmaceutical companies, nursing homes, air ambulance services, etc. — to overcharge patients and taxpayers.
If we want to make it harder for the U.S. health care system to gouge patients, we should focus on eliminating provider monopolies and increasing competition. If hospitals had to compete for our business, they wouldn’t even consider using any of these schemes to rip people off. Open‐ended insurance has compounded the problem, by protecting providers from cost‐conscious consumers. Why should a hospital lower its trauma activation fee if an insurer is ultimately on the hook — and higher trauma activation fees provide a higher starting point for negotiation between the hospital and the insurer?
What should we do in the interim? We aren’t prepared to suggest the use of tar and feathers on hospital administrators — but maybe it is time to start naming and shaming hospitals that abuse trauma fees. Maybe someone should ask Mark Zuckerberg whether he knows what the hospital that bears his name is up to.
Update: After this story was published on June 28, Zuckerberg San Francisco General Hospital agreed to waive the $15,666 trauma response fee charged for Park Jeong-whan’s visit to the hospital. In a letter, the hospital’s patient experience manager said the hospital did a clinical review and offered “a sincere apology for any distress the family experienced over this bill.” Further, the hospital manager wrote that the case “offered us an opportunity to review our system and consider changes.”