On October 30, the Wall Street Journal ran a front-page article titled “Medical Seizures: Hospitals Try Extreme Measures to Collect their Overdue Debts.” Unfortunately, focusing on how hospitals collect payment misses the core problem.

The article was part of a less-than-flattering series on hospital charging and collection practices. I commented on these issues in my August 2003 column. I also sent a letter to the editors of the Journal after this latest article, which the Journal has agreed to publish.

In my letter, I noted that I was glad substantial attention was focused on hospital collections problems–because there are significant problems. I also wrote that, unfortunately, readers might conclude the real problem relates to how hospitals pursue collections based on a case cited in the article. That case involved a hospital’s collection agency seeking arrest warrants when patients repeatedly fail to respond to payment requests and court hearings or fail to live up to payment commitments. Interestingly, using the Journal’s own numbers, these “extreme” cases amount to only 0.02 percent of the total population served by this hospital.

In my letter, I noted that how hospitals pursue collections is not the main issue. Rather, the complexities and cost of administering the U.S. healthcare system are the main issues. This fragmented and broken system of charging, billing, and collections consumes about 31 cents out of every dollar spent on health care. Medicare regulations (reported to be more voluminous than the entire IRS tax code), byzantine payment rules, 40-plus million uninsured people, complex payment formulas, and so on are the real problems. The system works against all of us, I stated in my letter, and that’s why we need to deal with these real problems. I appreciate the Journal’s willingness to air this view in its pages.

Charging and collection techniques will continue to grab headlines. Some suggest the ongoing press coverage is the result of well-funded efforts by an insurance company that sells high-deductible individual health policies and a union that is trying to unionize hospital workers. Regardless of the funding, the public-relations aspects of this issue are real.