Speaking of Health Care Costs....

[Joe Guy]

I recently had a physical exam. I just received a statement from Blue Shield showing the cost of my blood test.

The total amount billed is $1235.91
The amount paid by Blue Shield is $153.95
"Patient responsibility" is $299.00
Savings for using a Network Provider is $782.96

If this works like it did last time I had this done I won't be billed the $299.00 but I will have a $15.00 co-payment.

It looks to me like the provider (lab) is the one who loses in this deal. Or do health care providers overcharge in order to get a reasonable payment for services?

If this amount was billed directly to me, what would the lab do if I paid about 12% and told the provider that's all I need to pay?

What this country really needs is health care billing reform.

[Sue U]

There have been a number of stories on this topic over the past few years (there was just a lengthy piece on Al Jazeera America earlier this week). The short story is, the numbers for "billed amount" on your EOB have little to no basis in any kind of fiscal reality and are pretty much just made up. But don't be so sure you won't be dunned for that $299. Read your policy and see what's covered and to what extent.

The real question you should be asking is, if the "real cost" is the $452 "usual and customary rate" allowed by the insurer, why is my "insurance" only covering a third of that while I have to be responsible for the rest? What kind of shitty coverage is this, when I pay $XXX in premiums every goddam month?

[Long Run]

It is a goofy system where a cash-basis payer would pay far more than someone who pays late through the insurance system. One might argue that transparency in billing costs would be a nice requirement in any new law.

[Big RR]

I recall that my mother was hospitalized for three days (2 nights) when she had no insurance. They suspected she had cellulitis and was given IV antibiotics and some tests; after the tests they found she had no infection, the antibiotics were stopped and she was released. She was in a regular, semiprivate room and besides the IV, had no other extraordinary things (like cardiac monitoring or a special diet). The cost for this stay? $84,000 (in around 1998-99).

She had lost her job and had no insurance and was just below the age of medicare eligibility; however, as my father was working part time and they had social security, she did not qualify for Medicaid.

The hospital sued her, but my parents were pretty judgment proof; she had originally asked her if I could help with the bill (figuring it might be around $10,000-$12,000--she was the type who always wanted to pay her bills), but when she saw the bill she got incensed. I told her and my father to go to court on their own (I didn't want the judge to think they had a son who could help paying) and say they wanted to pay their bill but they couldn't. The result? The judge ordered them to pay $1.00 a week, which my mother did until she died.

But I always think what could have happened if they had a house or other assets to seize. I'd bet you that the insurers probably wouldn't even have had to pay $10,000 for that stay, but the hospital could seize assets for the entire $84,000 from an uninsured patient.

And Joe, I had almost the same thing; I had hand surgery at a surgical center a few months back; the total procedure took about 90 minutes from arrival to leaving (with about 25 minutes in the OR, mostly waiting to get numb (it was done under local anesthesia)). The bill for the center (not my surgeon's bill) was around $10,000-$11,000; they ultimately got around $2500 (including what I payed). But if I didn't have insurance ...

[Gob]

Hatch had four wisdom teeth removed the other day, total cost $2,500.00

[Sue U]

The NY Times has been running an occasional series about why medical costs are so high; here are a couple of excerpts:

The $2.7 Trillion Medical Bill
Colonoscopies Explain Why U.S. Leads the World in Health Expenditures

***

Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.

Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.

Colonoscopies offer a compelling case study. They are the most expensive screening test that healthy Americans routinely undergo — and often cost more than childbirth or an appendectomy in most other developed countries. Their numbers have increased manyfold over the last 15 years, with data from the Centers for Disease Control and Prevention suggesting that more than 10 million people get them each year, adding up to more than $10 billion in annual costs.

Largely an office procedure when widespread screening was first recommended, colonoscopies have moved into surgery centers — which were created as a step down from costly hospital care but are now often a lucrative step up from doctors’ examining rooms — where they are billed like a quasi operation. They are often prescribed and performed more frequently than medical guidelines recommend.

The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.

http://www.nytimes.com/2013/06/02/healt ... tures.html

As Hospital Prices Soar, a Stitch Tops $500

***

There is little science to how hospitals determine the prices they print on hospital bills.

“Chargemaster prices are basically arbitrary, not connected to underlying costs or market prices,” said Professor Melnick, the economist. Hospitals “can set them at any level they want. There are no market constraints.”

Prices for any item or service are set by each hospital and move up and down yearly, and show extraordinary variability, health economists say. The codeine that costs $20 and the bag of IV fluid that costs $137 at California Pacific are charged at $1 and $16 at the University of California San Francisco Medical Center, across town. But U.C.S.F. Medical Center charges $1,600 for an amniocentesis, which costs $687 at California Pacific.

After each hospital stay or visit, computer programs and human coders and billers use the chargemaster price list to translate the services rendered into a price. Sutter employs more than 1,300 people at a special center in Roseville, Calif., to perform this and other administrative tasks for its hospitals. Emergency room visits typically include separate charges for doctor’s services and for supplies, as well as a “facility fee” — the charge for walking in the door.

Orla Roche’s bill, for example, included $529 for “supplies and devices,” though her mother is perplexed about what those are: Orla left the emergency room with gauze wrapped round her head (under $1 at Internet supply stores), festooned with a pink cartoon sticker. According to the chargemaster price list for California Pacific, a vial of skin glue is billed at $181, a tube of antibiotic cream at $125.84 and a vial of local anesthetic at $79.73. These items can be purchased for $15.99, $36.99 and $5 on the Internet, though hospitals — which buy wholesale and in bulk — pay far less.

The bill also included $1,167 for the facility fee, which was classified at Level 3 — the middle of the scale, though Orla’s treatment was one of the most simple emergency room interventions. At Lenox Hill in New York, Daniel Diaz’s unusually detailed bill for his stitches included $1,828 for emergency room services, $628 for repairing the wound, $571.83 for “application of a finger splint,” $97.10 for a tetanus shot, and $311 for someone to give the injection. At Sparrow Hospital in Lansing, Mich., 2-year-old Ben Bellar’s bill for six stitches, more than $2,000, included $145.20 for “pharmacy” — a spoonful of ibuprofen and local anesthetic, his mother said.

***

Paths to Profit

Once perennial money pits, emergency rooms have become big moneymakers for most hospitals in the last decade, experts say, as they raised their fees and “managed” their patient mix. California Pacific Medical Center has nearly doubled its emergency room fees since 2005, its chargemaster price lists show.

California Pacific’s emergency room is not a trauma center; poor or uninsured trauma patients who require lengthy inpatient stays can strain a hospital budget. And insurers allow emergency rooms to bill more than urgent-care centers for simple procedures like stitches or X-raying a sprained ankle, making such procedures profitable. Indeed, the financial prospects are so appealing that doctors’ groups in Texas are opening free-standing “emergency rooms” that are not connected to hospitals.

“Hospitals see where they’re making money and try to do more of that,” said Dr. David Gifford, a former health commissioner of Rhode Island, who has studied how labs price their tests. He said that laboratory tests and X-rays are priced high and are profitable, though there is no difference in quality from national commercial labs that charge far less. A blood count and blood electrolyte test — ordered every day for most inpatients and often in the emergency room — are priced at $259.06 and $293.25 on California Pacific Medical Center’s chargemaster price list. Insurers often pay outside labs less than $10 for the services.

http://www.nytimes.com/2013/12/03/healt ... html?_r=1&

[Big RR]

Gob--the cost of dental care here might be similar; I had one wisdom tooth removed last week (partially impacted, it had to be drilled out in pieces. The procedure was done in an oral surgeon's office under local anesthesia for a charge of around $500.00. If it were done in a hospital (I do recall some friends having wisdom tooth extractions done that way when we were in our 20s), I'd bet it would be at least 20 times that.

[Joe Guy]

Colonoscopies offer a compelling case study. They are the most expensive screening test that healthy Americans routinely undergo — and often cost more than childbirth or an appendectomy in most other developed countries.

In the U.S. proctologists make money up the arse....

[dgs49]

All this is illustrative of why this country could never shift to socialized medicine. The entire medical infrastructure has evolved to exploit the peculiarities of the medical reimbursement protocols of government and the insurance companies.

If they stopped all the bullshit (defensive medicine), eliminated the various middle-men, curtailed the malpractice industry, and just did the testing and treatments that were medically necessary, the whole medical system would collapse, bringing the U.S. economy with it.

Single payer? You gotta be shittin' me.

[Big RR]

I doubt that; granted defensive medicine does account for some of the overprescribing of tests, etc., but the biggest driver is that every hospital/diagnostic center has to have every machine, etc., and the physicians are then expected to keep the patients coming to make it profitable. If a hospital has a cardiac surgery capability (and most will fight for that), e.g., the cardiologists are expected to refer more patients for the surgery; even assuming they will not refer patients who don't need the surgery, they will still refer patients who might be able to be treated less aggressively. The same is true for MRIs, CAT scans, etc. Add to this the fact that groups of physicians can own diagnostic and surgical centers, and it's no surprise that so many procedures are overprescribed.

[oldr_n_wsr]

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures

My doc keeps nagging me to get one of these. I am reluctant but now I have a better excuse. I'm really trying to keep health care costs down.

[Sue U]

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures

My doc keeps nagging me to get one of these. I am reluctant but now I have a better excuse. I'm really trying to keep health care costs down.

Your colo-rectal cancer treatment will cost a lot more.