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Menu: Credit-Rachel Feierman/WHYYI’ve been seeing the above menu floating around the social media sphere with the title “What if Restaurants Billed Like Hospitals and Providers?” I think this menu really captures and conveys one of the major issues with healthcare billing – particularly for hospital inpatient facilities that use the so-called “Charge Master:” It’s so complex that the average healthcare consumer can't understand it.
I had shared this menu with some work mates and one of the fellows, a systems architect, suggested there was a corollary of the diner paying with his medical insurance. Here's how I recall him explaining it to...
How the check total would be determined
Determine Basic Value/Adjust for Geography & Diner Attributes
When the server presents the check to the customer, the customer immediately tosses the bill in the trash. He pulls out his Diner Resource Guidelines (DRG’s) and begins calculating the amount he’s willing to pay. Since he’s a male over 20 years of age he selects the base rate for “Lunch, Eat-in Restaurant > 20 Yr old W/ Beverage” for the geographical region in which the restaurant is located.
Adjust for Overhead and Apply Policy
Since the restaurant is part of a national chain, he applies a national adjustment equalizer factor to account for the restaurant chain’s above average, outlier overhead costs. (The chain is part of the American Restaurant Association and had lobbied hard to obtain this special status.) Since the diner enjoyed a mug of Bud Light with his lunch, the restaurant was supposed to obtain a pre-authorization for the alcoholic drink but they didn't. So the diner omits the cost of the Bud Light from his calculation.
Give Capitalism Its Due
Finally, the diner applies a Reverse Gratuity deducting 15% from the total charges – pre-tax – to cover administration fees associated with time spent waiting to be seated and also for having to calculate the payment due amount. He writes the total amount down on an napkin and hands it to his wife, who will audit the charges and pay the restaurant within 30 days.
Not Far from The Way it Works
Funny? Yeah. I think so. But not really because this is how healthcare payments actually work. For more fun stuff and information regarding healthcare data, technology and services, follow me on Twitter where I share as @ShimCode.