Balance billing: the patients' perspective.

Area of Science:

• Health Economics
• Public Finance
• Healthcare Policy

Background:

• Balance billing permits physicians to charge patients fees beyond Medicare payments.
• Existing analyses often focus on efficiency, overlooking distributional impacts.

Purpose of the Study:

• To analyze the optimal Medicare fee policy under balance billing from a patient welfare perspective.
• To evaluate the welfare implications of prohibiting balance billing.

Main Methods:

• Economic modeling extending Glazer and McGuire's analysis.
• Comparative analysis of patient welfare under different balance billing scenarios.

Main Results:

• Pure efficiency suggests a zero Medicare fee under balance billing.
• Patient welfare can be higher with positive balance billing fees.
• Prohibiting balance billing may decrease patient welfare, particularly with high Medicare administrative costs.

Conclusions:

• Optimal Medicare policy under balance billing requires considering distributional concerns.
• Balance billing's impact on patient welfare is complex and context-dependent.
• Payer fee discrimination can enhance patient welfare in specific circumstances.