On Dec. 6, 2006, Lisa Kelly arrived at M.D. Anderson Cancer Center in Houston with a
check in hand for $45,000. It was an upfront payment for lab tests related to her
leukemia. Afterward, a hospital oncologist wanted to admit her right away for
treatment. But the hospital demanded another $60,000 on the spot. It eventually cut
that amount in half, but Kelly's husband lost his cool. "What part don't you
understand?" he recalls saying. "We don't have any more money today. Are you going
to admit her or not?"

The Kellys were caught up in a growing phenomenon in hospitals: demands for payment
from patients before they are given care. As a front-page article in today's WSJ
reports, hospitals are seeking cash upfront to reduce bad debt they're experiencing
amid a surge in patients who don't pay their bills. Some are uninsured and other
carry coverage that requires high co-payments. Uncompensated care cost the hospital
industry $31.2 billion in 2006, up from $21.6 billion in 2000, according to the
American Hospital Association. The alternative to payment in advance is billing
patients later: "After, when it's an ugly surprise or becomes contentious, it
doesn't work for anybody," says AHA president Richard Umbdenstock.
M.D. Anderson, which tells the WSJ it was trying to work with Kelly to find an
amount she could pay, defends its requirements for cash in advance, saying it
doesn't "feel financially able to assume the risk" when an insurer pays only small
amounts, as was the case in this instance. Asking patients to pay after they've
received treatment is "like asking someone to pay for the car after they've driven
off the lot," says a financial services VP there.

SOURCE: Wall Street Journal