The Facility Fee: A Factor Behind Healthcare Expenses

Updated: Mar 29

By Mritika Senthil


“I don’t understand why I have to pay so much!”


This outcry is one of many highlighting the obscurity of healthcare costs. Interestingly, the most targeted sector of this industry is primary care, which tends to have notably obscure expenses. Consider the following statistics:


  • The average length of visits with a primary care physician totals 17.4 minutes, with the servicing party speaking for only 5.2 minutes.

  • Overall, only 35% of appointments ordered one or more laboratory tests.

  • The average cost per visit is $106. Direct consultation and lab tests only contribute around $64 to the total cost.


money
Image Credit: Flickr @ Andy Thrasher

Required payments exceed the material costs of the visit. Recently, various studies have determined that hands-on care only accounts for approximately 60% of the cost. The remaining percentage is filled by the controversial facility fee.


At a basic level, facility fees compensate hospitals for their maintenance costs. It is an additional charge that many are unaware of when receiving their hospital bills. For example, a medical center may need to obtain resources in preparation for natural disasters, institute a quality assurance program, and utilize malpractice insurance. These circumstances, among others, are funded through the facility fee.


User Persona


Suppose Janet, a 32-year-old from Atlanta, Georgia, experiences a sharp throbbing in her ears. She expects an ear infection. Naturally, she plans to consult her primary care physician during her annual physical exam.


stethoscope
Image Credit: Flickr @ Wall Boat

Once arriving at her family practice facility, Janet checks in. Upon completing the preliminary procedures, her general practitioner, Dr. Parker, begins a physical examination. She evaluates Janet’s well-being using palpitation, percussion, and auscultation. Ultimately, completes her assessment after meticulous observation of Janet’s eyes, ears, nose, and throat. Afterwards, Dr. Parker analyzes Janet’s records. These include her physical features -- such as the initially recorded height and weight -- and medical history. Considering the observed inflammation and redness, Dr. Parker determines that Janet has a middle ear infection. Her lack of severe symptoms, however, leads Dr. Parker to conclude that the infection is merely at an early stage. Consequently, she decides to provide an antibiotic to prevent further infection. As per her medical records, Janet does not face severe allergies regarding these products, so she is prescribed the necessary medication before finishing her visit.


Appraisal


Janet’s appointment is not stereotypical of a certain circumstance. Associated costs, for example, are largely determined by location and insurance coverage. However, such a diagnosis extracts charges from multiple areas. During her visit, Janet came across six pieces of equipment, including:


  • A thermometer

  • A sphygmomanometer, or blood pressure monitor

  • A wall clock, used as reference for her pulse measurement

  • Palpitation does not require specific materials. Doctors palpitate, or touch, certain parts of the body to identify unusual lumps, feel organ size and shape, and check responses.

  • The doctor relies on percussion when, in basic terms, taps a patient’s abdomen. They determine organ location, identify blockages, and note problem areas. While this specific procedure does not utilize equipment, reflexes are checked using a rubber hammer.

  • Auscultation is the usage of a stethoscope to listen to one’s heart, lungs, and bowels.

  • A patient’s eyes, ears, nose, and throat are observed using an ophthalmoscope and otoscope respectively.


Aside from these, Dr. Parker accessed Janet’s medical records through a computer. Janet rested on a hospital bed. Her weight was calculated using a mechanical scale. Regardless of her appointment’s purpose, a significant amount of equipment, all provided entirely through the hospital was provided. Aside from purchasing these tools, a hospital must meet equipment redundancy requirements and implement quality assurance programs. If Janet only paid for the material services she received, the hospital couldn’t cover these costs. aforementioned costs would not be compensated for. Thus, the facility fee is vital.


Recently, however, the facility fee has been contradicted. Amidst the rise of COVID-19, these fees can total to around $1,000. These fees are often levied on associated lab tests for detection and treatment. Thus, various models have been established to reduce this burden on patients. For example, some have suggested a revision of facility fees depending on a hospital’s location and service. Despite the rising discord surrounding overall healthcare expenses, facility fees have played a significant role in organizing the economies and services dictating medical developments.



What Did You Learn?


Q: What are facility fees?

A: Facility fees are additional charges added to one’s hospital bill. Their primary intent is to compensate hospitals for maintaining physical premises. The extent of one’s facility fee is largely dependent in their insurance coverage, the service they receive, and the location they are in. In many cases, facility fees can be up to 40% of a medical bill.


Q: Why does the process of palpitation not contribute to the facility fee?

A: As previously stated, facility fees compensate for utilized equipment. In palpitation, however, the doctor simply palpitates certain parts of a patient’s body to identify unusual lumps, feel organ size and shape, and check responses. Thus, no physical premises are used and the only accumulated costs would be those from the doctor’s service.


References

https://www.dignityhealth.org/articles/what-is-a-physical-exam-and-what-can-you-expect#:~:text=Elements%20of%20a%20Physical%20Exam&text=A%20thorough%20physical%20examination%20covers,palpitation%2C%20percussion%2C%20and%20auscultation.

https://www.aha.org/system/files/2018-09/info-hopd.pdf

https://www.nashp.org/combat-rising-health-care-costs-by-limiting-facility-fees-with-new-nashp-model-law/

https://www.medicaleconomics.com/view/facility-fees-farce-everyone-pays

https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2014.1088

https://www.nytimes.com/2020/11/13/upshot/coronavirus-surprise-bills-guide.html

https://www.hotjar.com/blog/user-personas/

https://uxplanet.org/how-to-create-personas-step-by-step-guide-303d7b0d81b4?gi=43b15c8227e0

https://www.invisionapp.com/inside-design/user-persona-template/


Image Credits

https://www.flickr.com/photos/athrasher/2823255013/in/photolist-5itVmz-EBZKA3-212zrK2-2k7jUiT-kxJqmC-yoejbk-nMGXXQ-nxg8Vf-nRx44e-2amLCaW-FMnQ7T-nxg9bW-YWSWgC-nxfS9y-dspN14-nPG8Xs-nxg8Ef-GDhFKc-2jCPE6p-nRx3VZ-nxg9dE-251yQ97-25zzm78-SVmtxP-SM4RPD-28Ba1GY-26VTrVC-244U5Y7-Rs6Tv4-rFcUBX-hMJnN2-rsxWqL-z9G4NT-2iraws2-21LW8yo-2hY8xfk-sNPPhd-syzbz1-KD6WL-uz5dtB-KD6Xu-G5Vgbk-2hYcA2K-ZYS7F5-2iicofD-2i3av12-2au93gN-JNDeFc-HYXter-6LLtds


https://www.flickr.com/photos/wallboat/36782688981/in/photolist-Y3mTWM-RfNpeA-2iftoSY-RCvRQF-boPLSU-JtMJ8Z-27xfovr-8LontJ-JFDcQG-BUygY3-2hPiaqZ-MzkENX-Lk5pNa-2hXEc31-2aDZXkN-oeS3NZ-zyWky1-9LBZHE-2cJ4mHP-27j8DeW-2e3jkGm-85tnkj-bzQQTz-M7sTuh-M7sQwd-Mhh8f8-oydeiz-oeRxwK-Lk5teP-2hPmPRp-xrZUa2-2hPiWNa-otKmkr-2hPio6d-ow9on4-odufas-oeXwVy-x4qAwY-oeXM3k-odXxAY-owWr3p-oeXUCj-2hPiPWe-owstwv-2hPi33C-28iicc8-ocSYUt-oeRxn6-x28T5Q-oumcaH



#thehelyxinitiative #healthcare #facilityfee #expenses #helyx

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