(Photo: Christopher Furlong/Getty Images)

The scourge of so-called "surprise medical bills"—a label nearly always referring to out-of-network emergency care provided by an in-network facility, resulting in outlandish bills for the patient—has stoked outrage in recent years. Since 2017, investigative reporting driven by outlets including Vox, NPR, and Kaiser Health News has highlighted cases like that of Scott Kohan, who was saddled with an $8,000 bill for emergency oral surgery it turned out had been performed by an out-of-network surgeon. Some 57 percent of Americans have reportedly experienced this problem; three-quarters say government action should be taken against it.

In Congress, opposition to surprise medical bills appears to be a rare matter of bipartisan consensus: The House of Representatives held its first-ever hearings on the issue in early April after President Donald Trump himself declared a distaste for the practice, and senators from both parties allegedly are working on legislation to curb them. In late April, the California state assembly unanimously voted to pass further patient protections against surprise bills out of committee.

While any relief for patients experiencing astronomical bills is an undeniably good thing, surprise medical bills are but one product of the systemic failures of the health-care system in the United States—and are a narrow category of harms that befall patients within it. Placing such outsized focus on surprise bills as a uniquely galling one replicates the market logic that's so badly perverted American health care in the first place. An equitable health-care financing system simply cannot include networks and such wildly different plans for different people.

Surprise medical bills exist for a number of reasons, each of which are specifically rooted in problems inherent to a privatized, profit-driven health-care system. For one thing, there wouldn't be out-of-network bills without networks themselves—a health insurance innovation put forward in the 1980s. Unlike more regulated health-care systems in peer nations, the American health-care system lacks a robust mechanism to control prices. This leaves each insurance plan to negotiate with providers on its own, and gives the latter more power to set prices.

Once health-care prices began to skyrocket in the 1970s, insurance companies began to try several cost-cutting measures that are now all too familiar to modern policyholders, as described in essays throughout History and Health Policy in the United States, edited by Rosemary A. Stevens, Charles E. Rosenberg, and Lawton R. Burns. These included expanded use of cost-sharing through copays and deductibles to shift more of the financial burden for care onto patients and curtail their use of care, and through the introduction of networks that limited the facilities and doctors a patient could see. The theory behind networks was simple enough: By contracting only with certain providers, insurers could deliver a higher volume of patients to each one and thereby gain more leverage over pricing negotiations. They could then translate the savings into lower premiums, attract more customers, and increase market share.

Around this time, health insurers began peddling a wide variety of plans that suited different needs, allowing "consumers" to choose what worked best for them. Each plan had its own combination of cost-sharing structure, networks, covered benefits, and lifetime caps, with lower premiums offered for skimpier coverage. In the 2010s, the Affordable Care Act implemented a few rules to curtail these practices by outlining 10 "essential health benefits" that all compliant policies must cover, and striking down lifetime caps on coverage, effectively scrapping the most egregious junk plans from being sold to patients. But the ACA didn't intervene as strictly when it came to networks, stipulating only that plans must include "a network that is sufficient in number and types of providers" so that "all services will be accessible without unreasonable delay."

That vagueness leaves a lot of wiggle room, which insurers have clearly capitalized on to cut costs: A 2018 study by consulting firm Avalere showed that 72 percent of plans sold on the Obamacare exchanges had so-called "narrow networks," which included less than 70 percent of the providers in a given geographic region.

There's a very obvious problem with that, and it's the same problem underlying the proliferation of varied "insurance products" that cater to different types of patients. The degree of "choice" a given person has is overwhelmingly determined by their income and health status, which is a shamefully unjust way to allocate the costs of running a health-care system. The healthiest people are able to take their chances on a narrow network, while those with greater health-care needs are financially penalized for needing a wider breadth of providers. Meanwhile, the less money someone has available, the more they're coerced into "choosing" a plan based on price rather than benefits.

Out-of-network billing is the inevitable consequence of having networks at all. Marshaling sympathy specifically for those experiencing "surprise out-of-network bills" amounts to a sort of victim-blaming, wherein only those patients who followed the litany of rules perfectly are entitled to support and legislative action on their behalf. However barbaric "surprise out-of-network bills" are, they comprise a narrow swath of the financial harms suffered by American patients—a great many of which are built right into standard plans in the form of deductibles so high they exceed the total liquid assets of an average family.

Discussing and tackling the inequities—and potential for financial ruin—in our health-care financing system demands an acknowledgment that the sheer diversity of insurance plans in this country, each with their own pricing and benefit structures, is an inherently bad thing. When it comes to insurance policies, a multitude of consumer choices translates into genuine differences in the ability to access care. "Surprise out-of-network bills" are one highly visible example of how that hurts people. Others are never hard to find.

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