U.S. Healthcare Costs Exposed

[Winstonm]

A new database shows the discrepancies in billing for the same procedure among the nation's hospitals. The Huffington Post has an article that shows the billing for the same procedures at two hospitals: one billed $99,690 while the other billed $7044. The difference between what is charged as standard (to those without health insurance) must be designed to maximize the write offs when the uninsured cannot pay. This practice has repercussions, though, that affect everyone:

 

These price differences impose a uniquely punishing burden on the estimated 49 million Americans who have no health insurance, experts say. They are the only ones who see on their bill the dollar amounts listed on these official price lists. Yet these same prices effectively shape what nearly everyone pays for health care, because they determine how much private health insurance companies must surrender in reimbursement for services

[billw55]

The difference between what is charged as standard (to those without health insurance) must be designed to maximize the write offs when the uninsured cannot pay.

Yeah, their "list prices" are grossly inflated. That they make no effort to recover any of the difference between that and the insurance payout shows that they know it is a shell game. Compare an auto body shop: if your insurance covers less than their price, they charge you the balance.

 

Hotels do something similar - just look on the back of your room door for the "list price". Almost always it is much more than you are paying. They do this so they can jack up the price for certain dates/events without running afoul of price gouging laws. And all they had to do was print up some slips of paper and stick them on the doors.

[Phil]

I go to my car mechanic because my water pump needs replacing. He's required to give me a written estimate before we agree he will repair my vehicle. If he needs to exceed that price (maybe when he got underneath he discovered a leaky gasket w/e), he has to call me for approval.

 

I go to a clinic because my foot gets lacerated on some broken glass. The physician or PA stitches it up. I give the front desk a co-payment. The clinic submits a bill to the insurance company. They agree to pay 'x'. I get a bill for the balance. I have no idea what this difference is when I enter the clinic, and its likely that different physicians would bill differently, and the insurance company would probably have different payment levels, depending on how the laceration is classified.

 

I hope 2014 is different.

[y66]

The hospital that billed $7,044.00 is probably using old software.

[Winstonm]

I go to my car mechanic because my water pump needs replacing. He's required to give me a written estimate before we agree he will repair my vehicle. If he needs to exceed that price (maybe when he got underneath he discovered a leaky gasket w/e), he has to call me for approval.

 

I go to a clinic because my foot gets lacerated on some broken glass. The physician or PA stitches it up. I give the front desk a co-payment. The clinic submits a bill to the insurance company. They agree to pay 'x'. I get a bill for the balance. I have no idea what this difference is when I enter the clinic, and its likely that different physicians would bill differently, and the insurance company would probably have different payment levels, depending on how the laceration is classified.

 

I hope 2014 is different.

 

A few years ago I had a cat scan done - nothing found - and the bill showed an initial charge of $3000 that was negotiated to $900 by the insurance company. The question I had then and still have is if the hospital can afford to provide a cat scan for $900 why is there a discrepancy depending on the payer?

 

It seems a single payer or some kind of limited paying group should be able to negate these differences.

[billw55]

A few years ago I had a cat scan done - nothing found - and the bill showed an initial charge of $3000 that was negotiated to $900 by the insurance company. The question I had then and still have is if the hospital can afford to provide a cat scan for $900 why is there a discrepancy depending on the payer?

Indeed.

 

I wonder if this evolved from price negotiations between the providers and insurers. The insurers bargain the price down. The providers, wanting to get the original amount, raise the asking price to allow for some "discounting". The insurers eventually figure this out and go for more discount .. which the providers figure out, and raise their start point even more. And so on. So the gap just gets larger and larger.

 

I wonder, if self insured people are actually paying those inflated rates, or what happens with that.

[Winstonm]

Indeed.

 

I wonder if this evolved from price negotiations between the providers and insurers. The insurers bargain the price down. The providers, wanting to get the original amount, raise the asking price to allow for some "discounting". The insurers eventually figure this out and go for more discount .. which the providers figure out, and raise their start point even more. And so on. So the gap just gets larger and larger.

 

I wonder, if self insured people are actually paying those inflated rates, or what happens with that.

 

Self insured are not paying those inflated prices - but those inflated prices show up as debt in the bankruptcy proceedings. <_<

[Vampyr]

UK residents are very aware of how lucky we are.

[kenberg]

I am now 74. There is an interview with the mathematician John Conway in the latest Math Notices. He is 75 and notes that for 45 years he was 25, but he is no longer 25. That description spoke to me. I had phrased it as my body had been on autopilot for 73 years but is now demanding that I pay some attention to it.

 

At any rate, I have been spending a lot more time with doctors lately. The pricing is a mess. I am not at all sure who the villain is, if anyone, but it's a mess. Not that I have been hit hard, at least not yet. I have medicare, and I have a good supplement. For many years I was paying out a lot and needing little. Now I am very pleased to present my plastic and walk away with a modest co-pay. But the money has to come from somewhere. I rarely have a clue as to the amount.

 

I learned long ago not to take studies at face value. The Post has a similar article about this study. I barely skimmed it, but I thought I might want to wait for the rebuttal before climbing aboard.

 

This all goes back a ways. My father died in 1977 and I had some bills to pay. I got bills from doctors that I had never heard of for procedures I did not understand. Mostly I just trusted the system and wrote the checks. The one exception was a doc who sent an incorrect bill. I called the office and they agreed it was incorrect. I said send me a correct one and I will pay it. They re-sent the incorrect one. This repeated a few times until I wrote to them and said if they ever sent a correct bill they would get a check by return mail .They never sent a correct bill, I never sent a check.

 

Anyway, as near as I can tell, the pricing is totally irrational. It has caused me some grief, but mostly with regard to what procedures should be done when and by whom.

[mike777]

the debate seems to be replace one insane method...today...over a even more insane method.

 

 

again this seems to be where everyone hates to agree on a method of failure. Where failure in the short run leads to something better in the long run.

 

 

given trial and error..in the short run ...people die...but in other run people die but people hide or accept it.

 

I mean see vamps comments where people think they are lucky, very lucky\ compared to the confusion in the usa, today.

[mike777]

please let me phrase this another way:

 

 

Have any bbo posters ever walked out of a uk or europe doctor office? Have you ever walked away on the basis of poor service?

 

If not why not?

[helene_t]

please let me phrase this another way:

 

 

Have any bbo posters ever walked out of a uk or europe doctor office? Have you ever walked away on the basis of poor service?

 

If not why not?

yes, but it obviously happens a lot less often than it would if medical services had been ordinary commercial services. I once got upset with my gp and called a competitor asking to be transfered to them. They wouldn't take me. They said they needed very good reasons to take a patient that is already listed with a different local gp. I think it is some kind of peer loyalty, although I suppose it could also be based on the idea that a patient that easily gets upset with gp's is best avoided. I am not sure if all (or most) Dutch gp's would have that attitude. Nor if it would be the same in the UK. In Denmark it is not a problem to change from one gp to another, nobody would ask you to give a motivation.

[onoway]

yes, but it obviously happens a lot less often than it would if medical services had been ordinary commercial services. I once got upset with my gp and called a competitor asking to be transfered to them. They wouldn't take me. They said they needed very good reasons to take a patient that is already listed with a different local gp. I think it is some kind of peer loyalty, although I suppose it could also be based on the idea that a patient that easily gets upset with gp's is best avoided. I am not sure if all (or most) Dutch gp's would have that attitude. Nor if it would be the same in the UK. In Denmark it is not a problem to change from one gp to another, nobody would ask you to give a motivation.

In Canada they ask and are very reluctant to "move in on another doctor's territory". Asking for a second opinion is fine but they don't like people switching primary providers. Or at least that's been my experience.

[Winstonm]

As far as changing doctors, the U.S. isn't exactly the land of the free, either. There are doctors who refuse some types of insurance, and many doctors will not take new patients at all. For the uninsured, unless they can pay up front their only option is the local hospital emergency room where triage will place them at the bottom of a long list of patients to be seen unless they are in crisis.

 

Two facts emerge about U.S. healthcare. 1) It is the most costly in the world. 2) It does not provide superior care.

[kenberg]

This business about switching doctors is very important to me. You might say I am selfish because someone gets stuck with the medicocre docs, and I suppose I am. But it's my health and I want to watch out for it. I was recently discussing my health with a doc and I mentioned some thoughts I had but acknowledged that I don't have to be right. He said that he hadn't noticed that about me, but then thought a bit and re-phrased his view of me as when I want something, I really want it. With my health, that is correct. This approach seems to be working.

 

Some plumbers are better than other plumbers. No one doubts that. It is the same with doctors. I want the better plumber, and I want the better doctor.

[Winstonm]

This business about switching doctors is very important to me. You might say I am selfish because someone gets stuck with the medicocre docs, and I suppose I am. But it's my health and I want to watch out for it. I was recently discussing my health with a doc and I mentioned some thoughts I had but acknowledged that I don't have to be right. He said that he hadn't noticed that about me, but then thought a bit and re-phrased his view of me as when I want something, I really want it. With my health, that is correct. This approach seems to be working.

 

Some plumbers are better than other plumbers. No one doubts that. It is the same with doctors. I want the better plumber, and I want the better doctor.

 

Physicians are not required to accept Medicare. With the recent decrease in allowable charges for physicians, the number of choices for physicians who accept Medicare has again decreased.

[Phil]

Mild threadjack.....

 

As we look at costs, I used to think that it was the tort lobby that was one of the reasons for high costs. In California, however, medical malpractice is capped at damages of $250K and has been that way for over 20 years.

 

I know this because a friend of mine recently had routine open heart surgery. He stroked out in post-op, because the phlebotomist wasn't watching the store.

[barmar]

I suspect the original idea of the negotiated discount for insurance companies was a kind of "group rate" -- like when a convention negotiates hotel room rates by guaranteeing a certain number of customers. But it's obviously gone far beyond that.

[ArtK78]

About 15 years ago, my ex nearly died shortly after the birth of our third child. She was in a medically induced coma for 4 weeks, another week in intensive care, and another week in the hospital before being released to a rehab facility.

 

We were covered by a very good health insurance plan which picked up everything. Nevertheless, I did receive a bill from the hospital. Besides the fact that the bill was about 60 pages long, the thing that struck me was the tab - over $6 million. The insurance company wound up paying about $1.2 million if I recall correctly.

 

This also reminds me of a commercial that ran several years ago. A patient needed surgery for some unspecified condition. When asked about it, the surgeon said "He has money coming out of the gazoo!" or something to that effect. In other words, the hospital was more than willing to do whatever was necessary because the patient had unlimited funds.

[ArtK78]

Mild threadjack.....

 

As we look at costs, I used to think that it was the tort lobby that was one of the reasons for high costs. In California, however, medical malpractice is capped at damages of $250K and has been that way for over 20 years.

 

I know this because a friend of mine recently had routine open heart surgery. He stroked out in post-op, because the phlebotomist wasn't watching the store.

 

Speaking from a biased viewpoint (as I am an attorney), the reason for the high costs is incompetent medical personell, not greedy tort lawyers. If the courts and juries were not finding in favor of the plaintiffs (essentially stating that the medical personell were incompetent) then the awards would not be so large.

[kenberg]

Physicians are not required to accept Medicare. With the recent decrease in allowable charges for physicians, the number of choices for physicians who accept Medicare has again decreased.

Sure, I am aware of this. So far this has been a potential problem, not an actual problem. I have successfully exercised considerable choice, and I would very much not want to lose the option to make such choices. The fact that some doctors might refuse to take me as a patient for any of a variety of reasons, the most frequent being they already have all the patients they can handle, has not prevented me from exercising choice.

 

I believe that anyone who wishes to reform the system needs to take this preference for choice into account since I am pretty sure a large number of people share it. If potential reformers discount such issues as unimportant, they are apt to have very limited support for their plans.

[Vampyr]

the debate seems to be replace one insane method...today...over a even more insane method.

 

 

again this seems to be where everyone hates to agree on a method of failure. Where failure in the short run leads to something better in the long run.

 

 

given trial and error..in the short run ...people die...but in other run people die but people hide or accept it.

 

I mean see vamps comments where people think they are lucky, very lucky\ compared to the confusion in the usa, today.

 

This is slightly more coherent than usual; are you saying that NHS clients are not as lucky as they think they are?

 

Well, private insurance here is much cheaper than in the US, because it has to compete with the single payer. And very few take it up.

[neilkaz]

I go to my car mechanic because my water pump needs replacing. He's required to give me a written estimate before we agree he will repair my vehicle. If he needs to exceed that price (maybe when he got underneath he discovered a leaky gasket w/e), he has to call me for approval.

 

I go to a clinic because my foot gets lacerated on some broken glass. The physician or PA stitches it up. I give the front desk a co-payment. The clinic submits a bill to the insurance company. They agree to pay 'x'. I get a bill for the balance. I have no idea what this difference is when I enter the clinic, and its likely that different physicians would bill differently, and the insurance company would probably have different payment levels, depending on how the laceration is classified.

 

I hope 2014 is different.

It will be... you'll probably have to pay more says the cynic in me.

[billw55]

Well, private insurance here is much cheaper than in the US, because it has to compete with the single payer. And very few take it up.

This interests me. Does the government provide a rebate/tax reduction for people who obtain private insurance? Is there a noticeable difference in service quality between public and private coverage?

[PassedOut]

Every business person knows just by looking at the US healthcare numbers -- very high costs yielding comparatively poor results -- that a tremendous amount of waste exists in the system. One of the reasons that business people (excluding those who pig out on that waste) favor the ACA over the alternative of maintaining the old status quo is that the ACA starts to cut away at the disgusting waste.

 

The law includes virtually every big idea put forward to promote efficiency, such as rewarding doctors and hospitals for their quality not quantity of care. These policies are making a difference: Over the past three years, health-care costs have grown at their lowest level in 52 years.

Of course this is just a start, and even with the ACA the US healthcare system won't be as good as that in European countries. But we have taken the step from intolerable to merely bad. And, speaking personally, our businesses are already seeing the benefits in much smaller increases in insurance premiums.