cally suggest that the same approach should, in addition to past medical expenses, also be applied to future medical expenses. 88
The difference between the list price and what insurers actually pay to
providers can be substantial. 89 One study found that insurers in 2004 paid
hospitals only approximately 38 percent of their list price. 90 Furthermore,
determining what insurers actually pay is extremely convoluted. 91 Health
care economist Uwe Reinhardt called the process “chaos behind a veil of se-
crecy,” noting that the “actual dollar payments have traditionally been kept
as strict, proprietary trade secrets by both the hospitals and the insurers.” 92
Other authors explain that:
When it comes time to bill and pay, the parties execute a complex kabuki
dance where the provider submits a bill for the full list price of the services
performed, whereupon the insurer applies the discount to arrive at the pre-
negotiated rate, and then pays to the provider a percentage of that rate spec-
ified by the health plan to which the patient is subscribed. This leaves the
patient to pay the remainder as a ‘coinsurance’ payment. 93
Now imagine the difficulty in trying to calculate the difference between
list price and amounts paid by an insurer for future medical expenses. As one
pair of authors observe,
In addition to predicting the probable future treatment that a plaintiff might
require, expert testimony may be needed to properly estimate, not just what
the list price of that treatment is, but what amount actually would be paid,
based on the historic contract terms between the plaintiff’s insurer and the
on Damages in Personal Injury Lawsuits, 80 DEF. COUNS. J. 239, 248 (2013); Robinson v.
Bates, 857 N.E.2d 1195, 1200 (Ohio 2006) (holding that the defendant may introduce evidence
of amounts “written-off” of medical bills since those amounts are never paid by any collateral
source) (emphasis in original); contra Kenney v. Liston, 760 S.E.2d 434, 446 (W. Va. 2014)
(holding that “. . .the collateral source rule permits an injured person to recover all of his or
her reasonable medical costs that were necessarily required by the injury. Where a person’s
health care provider agrees to reduce, discount or write off a portion of the person’s medical
bill, the collateral source rule permits the person to recover the entire reasonable value of the
medical services necessarily required by the injury. The tortfeasor is not entitled to receive the
benefit of the reduced, discounted or written-off amount.”) (emphasis in original).
88. See, e.g., Haygood v. De Escabedo, 356 S. W.3d 390, 396-97 (Tex. 2011); Geslison
& Jacobs, supra note 87 at 249 (noting that “[s]everal times in the Haygood opinion, the court
used language like ‘have been or will be paid,’ ‘have been or must be paid,’ and ‘paid or to be
paid’ to interpret Section 41.0105’s ‘actually paid and incurred’ language.”) (emphasis in original).
89. See Uwe E. Reinhardt, The Pricing of U.S. Hospital Services: Chaos Behind a Veil
of Secrecy, 25 HEALTH AFF. 57, 57 (2006).
91. See id. (quoting a leading expert on how hospitals price services, who stated “there is
no method to this madness”).