The Whole Health Care Cost Hustle

We disagree politically, but I completely understand your frustration holland.

Health care is the only industry where you can't get a "solid" cost on anything they do. The cost depends upon the plan you have (or don't have). You can't walk through the doors and say "how much for an X-ray" and get an answer like "it costs $____." Their first question will be "what's your health care plan?"

I think I drew this example in another post long ago, so forgive me for being repetitive, but the current system of billing would be like going into a McDonalds without any prices listed on a menu.

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Me: I'd like a Quarter Pounder, please.
Cashier: OK, what plan do you have?
Me: What?
Cashier: Well we can only charge you according to your plan. If you have Meal Plan A, your out of pocket expense will be 50 cents. Meal Plan B, you must pay $30 now with a maximum out of pocket expense of $50 in the calendar year.
Me: Ummm...I'd just like to pay cash. It's a simple order.
Cashier: Hold on for a second...(walks away...comes back 2 minutes later)...Sir, cash customers have to pay the full price of the sandwich, plus the additional costs of people who can't afford to pay for their sandwiches. Your total a for one quarter pounder will be $315.88.
Me: You know, I think I'll just skip the sandwich and join the group that doesn't pay anything. Sounds like a much better deal.

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Simple example, but it's just about as ridiculous as the system we have now. The 2000 page, rammed-through health-care reform will not fix this...it just cements the current insurance scheme into the bureaucracy with the IRS to enforce your bill payment.

Go to single payer and allow Medicare/Medicaid to negotiate for drug prices… Huge savings.

My family’s medical expenses this year have been over $150K. That’s what the insurance company has paid, I couldn’t image that would happen if we didn’t have insurance. Of course we have a $1,000,000 life time cap with our insurance too, so in the next few years it looks like I might be looking for a new job just to get a new insurance policy and reset the lifetime cap.

Our system is messed up. Did Obama’s HCR bill fix these? No. Was there more good than bad? Yes, but ultimately big business owns the government and by extension us…

Oldhometown, you are wrong when it comes to your comments about an x-ray costing xx amount of dollars. Every hospital has what's called a Chargemaster. Every CPT code for every procedure (x-ray, lab test, injection, etc.) is attached to a certain price. So in fact, you could call St. V's and St. Lukes, ask how much a chest x-ray costs and comparison shop. Medical comparison shopping is a trend that's growing right now because of the economy.

We're caught between the medical industry, and the insurance industry. Example: I have an insurance card in my pocket. The medical industry wants to get their hands on it, while the insurance company wants it to remain in my wallet. I get hurt. The hospital patches me up, and sends me on my way, as soon as I regain consciousness. That's because the insurance company allows, e.g., six tenths of an hour payment for my particular condition. Then, they wheel you out into the lobby--and there better be someone there to take you home. You get instructions to go to the emergency room should you have more complications. Then the process starts over again. So who's the bad guy here? The greedy insurance company, or the hospital(who can no longer bill the insurance company ten dollars for an aspirin)? We're all caught in the middle of some insane sort of dialectic---thesis, antithesis, synthesis. Once suicide becomes an accepted alternative(Soylent Green)--watch the hospitals and insurance companies find a common ground that will be equitable to both of THEM.

dell--

The X-ray example was one I actually lived and a conversation I had with the front desk of a major hospital in St. Louis, Missouri. They would not give me a cash price. Totally refused.

Maybe comparison shopping is in vogue now, but in 2009 I actually lived what I wrote about today.

dell & hometown, I tried to get prices in advance for a chest X-ray and a fairly standard blood test at a well-respected hospital here less than a year ago. The staff person who deals with the public (I was there in person, not over the phone) did not even know who she could call to find out the prices.

After several consultations, she found a name. The person who was authorized to look up prices was gone for the day (2 p.m., weekday), there was no one else who even shared her office or her function, and no one even remotely interested in tracking down what I would consider to be a simple customer inquiry. I told everyone involved, I just wanted a ballpark figure. No one had ANY IDEA if my services would cost forty bucks or six hundred or even several thousand.

There is NO financial information available in advance between doctors who prescribe services, hospitals that provide them, and the customer who has to figure out how much might be paid for. Really, the doctor had no idea what anything would cost -- not even a ballpark figure.

I think there are parts of health care reform that have not taken effect yet -- I know our insurer was raising premiums about 300% this past summer. I would seriously consider medical tourism to be an option for me!

Eh, I only work in the industry. Guess I don't know what I'm talking about...

Yeah, a single-payer system would solve all of our problems. Raise taxes to astronomical levels to pay for the single payer system, in return you still go into bankruptcy because your taxes are so high you can't afford to pay your mortgage or other debts. But hey, my healthcare's free so who cares!

dell--

I didn't say you didn't know what you were talking about, I was only saying what I actually lived through.

Sorry my experience as a consumer doesn't match what you work with every day. If your hospital/medical office can provide charges to patients, great. Perhaps where you work has higher standards that the hospital I went to? Maybe I was talking to an imbacile at the front desk?

I will now change my memories of this frustrating incident in my head because I was only there and it was my fault I didn't ask for the Chargemaster.

Back in the day, I did direct reimbursements for doctors thru BCBS. It was the way to go back then because the doctor got paid direct and did not have to chase the patient for payment. You can only imaging what some people might do with a $10K check instead of signing it over to the doctor.

On the flip side, doctors had to accept the UCR or Usual, Customary, Reasonable payment provided by the insurance company as payment in full and could not bill the patient for any additional payment. Sometimes this was less than a doctor's charge, and some times more than what might be charged.

Doctors could submit up to 10 or 15 of their most billable procedures to me and I could tell them the reimbursement. Smart ones raised the fees where they were under to compensate the underpayment on other charges.Appendectomy surgery always seemed to be overcompensated, while others were extremely low compared to what some were billing. That is where a good practice manager could use the system to bill for additional procedures, treatments or office visits thru the ICD coding that may not be included in the base re-imbursement but allowable by the insurance carrier.

It was quite fun doing this and going to the medical conventions .

Every hospital has what's called a Chargemaster. Every CPT code for every procedure (x-ray, lab test, injection, etc.) is attached to a certain price.

That is true, and a prospective patient would be able to obtain the chargemaster rate. But, that rate is not necessarily the most meaningful number for the patient.

The sticker price vs. what's actually reimbursed varies based on the contract between the specific hospital and the specific insurer, and there are nearly endless possibilities there.

Since patient liability is determined based on the insurer's allowed amount (and not the sticker price), it is correct that the same Xray at Hospital A could be paid differently by Insurer X and Insurer Z. And different rates yet again at Hospital B for the same 2 insurance plans. That's why they would need to know what kind of insurance the patient had, if the patient were actually looking to estimate what their liability was going to be.

Yeah, a single-payer system would solve all of our problems. Raise taxes to astronomical levels to pay for the single payer system, in return you still go into bankruptcy because your taxes are so high you can't afford to pay your mortgage or other debts. But hey, my healthcare's free so who cares!

In other words, millions of uninsurable Americans are the cost of the rest of the country having (somewhat) affordable insurance. It would cost too much to cover Americans who, through no fault of their own, do not have an employer or spouse's employer willing to provide coverage and have conditions that make purchasing insurance for themselves completely unaffordable. I don't accept that. This is the richest country in the world. Even if we didn't provide healthcare services directly from the government, citizens should be able to buy coverage at a price that doesn't mean a life of poverty. Aside from military defense, to me this is one of the fundamental things that I want the federal government to provide to me. Anyone who has ever gone through the hassle of trying to self-insure knows what I am talking about.

Correct Ace, my family is pretty much uninsurable because of a birth defect. I looked into starting my own company about 6-7 years ago and there was no way I could get insurance. At least insurance that covered pre-exisiting conditions.

I'll have to work for corporation my entire life. My child's life depends on it. Our system is completely FUBAR.

You won't be able to get insurance -- "pre-existing condition". At least if they repeal Obama HCR, which is what the TeaOP wants. And if I recall correctly Obama HCR was supposed to do away with the lifetime cap. So hey, get your lube ready if HCR is overturned by the Teapublicans.

People who don't have insurance go to the ER.

ER nurses and docs have more of a load so they have to be paid more, hospital has to hire more to handle more people.

Hospital is now spending lots of money on ER staff and isn't recuperating it in billing, so hospital jacks up prices on services.

Insurers and Medicare/Medicaid now have to pay the hospital more, which means the costs are passed back to us (higher premiums/reduced benefits and more government spending which means either higher taxes/higher deficits).

Years of wage stagnation/wealth concentrating at the top mean many people can't afford insurance or the co-pays, or if they can afford it, the reduced benefits cut off how much care they can get.

Thus more people are uninsured... which puts more in the ER, which amplifies the cycle further.

Keep in mind that MANY MANY hospitals and insurers are FOR PROFIT PUBLICLY TRADED CORPORATIONS and therefore they are beholden to the shareholders... which would almost work out IF the shareholders were actual everyday people like you and me and able to execute shareholder votes and so on and say "no, Mr. CEO, you do NOT get $100 million a year and a goddamn jet, yacht, and mansion provided to you along with security for your fat ass". But in reality the shareholders ARE you and me IF you have a 401(k) or other retirement plan, THROUGH some financial management outfit that takes OUR money and pools it to buy stock in THEIR friends and control those companies however THEY see fit.

And in the meantime, some poor kid somewhere gets an infected tooth because the parents can't afford a dental visit, the infection goes to the brain, the parents haul the kid to the ER after s/he passes out and has a seizure, and the kid dies in the hospital. Parents can't pay the hospital bills so someone loses their insurance as prices go up to cover for the losses of the hospital, and the rest of us are paying off huge bills for dead kids through our healthcare/Medicare/Medicaid contributions when we could have had universal health care and paid for dozens of live kids to get a filling. But that would be OMG SOCIALISM.

Funny thing but the Republicans, the "pro-life" party, the party that harps on about how charity will take care of anyone, they don't actually give a rusty fsck once a live (preferably white Christian) baby pops out the vag. Get raped? You MUST have the kid, never mind if you can afford to take care of it or pay the bills for popping it out in any setting other than at home with NO pre-natal care whatsoever. The pro-life party don't care if you can afford pre-natal care, they don't care if your unborn baby has any conditions, just so long as you pop out another potential Republican voter.

You know those "death panels" the Republicans scare us with? They're staffed by Republicans. If you are not producing potential Republican voters, then you get nothing. Hence why the GOP fights abortion, gay marriage, welfare, universal healthcare, etc. etc. etc.

The problem is regardless of where you call or what you are having done, the person on the other end of the phone line usually can't give price information on everything that will be involved. I definitely agree that we need more transparency in the industry and the consumer should not have to make 15 phone calls to find out all the costs. It really doesn't matter what someone charges if you have health insurance because the most that you can be responsible for is the insurance carriers allowed amount. Now if you happen to be self pay you can always negotiate a discount. Unfortunately if even 1 payor has a very high allowed amount for something the cost will rise to that plus because they always want to capture that money. In the end it hurts the consumer who is writing checks.

as someone with a pre-existing condition (type 1 diabetes since the age of 10) i NEED to have insurance. if i let it lapse for even a day, i'll never be insured again unless i get a job that covers me.

after 24 years of paying a deductible every month for my insulin (around $25) i switched over to a "Health Savings Plan" aka an HSA this past year. Now... until i reach my crazy big annual deductible, I pay $900 a month for insulin. that's right... $900 a month for meds i can't live without.

what the hell would i do if i didn't have insurance at all? or a job? it's somewhat terrifying, and very sobering.

there is no right plan to fix everything, but what he have now is not working for most people.

The problem is the industry being able to hide the true cost. Whatever is negotiated between your insurance carrier and the provider is IRRELEVANT. Whatever the allowed amount is, is IRRELVANT. Whatever the amount the insured consumer is repsonsible for is IRRELEVANT. What MATTERS is the true cost. Every hospital has a big staff of bean counters who labor long and hard to cost out an asprin tablet or the mucus recovery system (Kleenex) or the complicated heart valve replacement surgery. They know what these things cost them to a fraction of cent. If the instituion, say a hospital, is a true non-profit then this true cost information should not be witheld from the consumer. If its a for profit provider there should be one flat price per service or medical goods for all, that doesn't scale up or down depending on lucky or unlucky you are in having insurance and who your carrier is. There is absolutely no justification for a "sticker" price for the uninsured and an 82% price reduction for the insured. Its absurd.

What the heck is the term "sticker price" doing here anyway? We aren't dealing in new cars for Christ's sake. I dont have "sticker shock". I'm enraged at the level of blatant greed in the system and the level of stupidity and selfishness displayed by the American public towards this issue.

Upso, what a scary situation! The doctor I consulted wanted me to get a tube of ointment at the in-house pharmacy. Since I was able to price-check there, I found out in advance that it would cost $75 for a one-ounce tube of ointment that would probably last me about 3 days. I voted with my feet instead, and figured out how to live without the ointment. People like you don't have that option.

Our annual deductible is $10,000 (that's ten thousand dollars) per person. It's almost like having no useful coverage at all. For $10K, I'm pretty sure I could fly to another country with a more sensible cost structure and get treated there ... plus have a bit of a vacation.

What we have now is a medical-industrial complex, and it's every bit as scary as the military-industrial complex we were warned about in the past.

its all very scary and sad. upso, my heart goes out to you. i dont know how this country can be so blessed in so many ways and our healthcare industry be so completely insane. a friend of mine moved to england a few years ago and is in total amazement with the care she receives there, and the cost. i know alot of people dont agree, but it should be a right not a priviledge. there should be no class warfare put upon this subject.

Raise taxes to astronomical levels to pay for the single payer system, in return you still go into bankruptcy because your taxes are so high you can't afford to pay your mortgage or other debts. But hey, my healthcare's free so who cares!

Why do you assume taxes would have to be raised to astronomical levels?

How much do you pay for health insurance now, including premiums, co-pays, deductibles, etc.? I for one would rather my taxes go up and know that I am covered for everything than to pay some health insurance company the astronomical fees they charge me and my employer. At least I know I'd never go bankrupt due to medical bills, or have to watch my child suffer because I can't get her the care she needs.

Never, ever forget this salient point: the health insurance industry wants your money, but it is in their best interest to not pay out anything on your behalf.

Death panels? We have them. They are called insurance companies.

The main argument against socialized healthcare says that by reducing our number of options (forcing us into the system), you are taking away our right to choose how to take care of ourselves. While this is true, healthcare is supposed to be about science. And in science, objectivity is supposed to exist. When you mix science, medicine, and government, you end up with mandates. Mandates that say you shouldn't smoke, shouldn't be over a certain BMI, need to exercise at school/in the workplace, that you have to use preventive medicine, etc.

Hence you have a clash of values between those that actually know what is best for most people (doctors/scientists) and those that choose to live their lives in an enjoyable, destructive manner as they choose (whether it be alcohol, Big Macs, or the couch).

The hurdles to getting socialized medicine to succeed here are massive. We would need to completely overhaul, and in essence destroy, the way medicine is practiced and paid for. We would also need to be willing to accept the mandates that make us healthier. However, the interests that represent our vices and the current system are treated like people with bottomless war chests to fund a resistance, and have legal rights and freedom of speech. I don't think socialized medicine can succeed here until we stop treating artificial entities like people. Until then, don't expect to be paying any less next year to maintain the status quo.

Brainswell, I think there are two different issues here. Mandates & health suggestions come from departments of health (county, state, fed) and university researchers who get grants to promote healthiness (or at least, decrease "death-i-ness.") You could get them off your back if all government-supported departments of health were defunded and eliminated.

Other countries have medical systems that don't depend on forcing people to clean up their lifestyle. What they do have is systems that won't permit a bloated financial middleman to collect from both professional providers (hospitals and physicians) and the customers/patients -- while also getting paid by employers who offer benefits.

Hey Viola--here's something to make your head explode.

UC Panel Approves Raises for Hospital Executives

$960,000 a year for an administrator, because she was being offered $1.5 million elsewhere. I went into the wrong line of work. And I thought California was broke...

I know for a fact in the HCR passed by Congress they have done away with lifetime caps. When you are young you do not even think about a cap. When you reach my age you realize the lifetime cap is just around the corner.
I, for one, am grateful for Medicare and the Medicare Supplement policy I pay for through my former employer.

When you reach my age you realize the lifetime cap is just around the corner.

Yeah? Just the other day someone told me that you were looking at your lifetime cap in the rear view mirror.

Remember: In the case of a nuclear explosion, Duck and Cover.

From Anniecski: Never, ever forget this salient point: the health insurance industry wants your money, but it is in their best interest to not pay out anything on your behalf.

Finally, a true and accurate statement. When can I buy you a drink by way of appreciation?

If you want health care costs to decline, the very first thing to do is overhaul the health insurance industry by way of reinstating the Spanish Inquisition and issue them the traditional search and destroy mission - complete with flamethrower.

Insurance companies have been having it all their own way for several generations, and now it's likely too late to actually derail the train. These companies charge the medical industry absolutely insane premiums for malpractice insurance, then charge the consumer whatever the company discovers the market will bear. Then they don't even bother with a gun and a mask when they tell the medical industry what they, the payer of the medical bills, is willing to pay. Like it or lump it, it's all the same to the insurance company.

You think politicians are crooked? They run a Sunday School class compared to the health insurance industry.

I was discussing health care today and one of the things we were discussing today was how it is surprising that a cabal of other businesses, via the US Chamber of Commerce or something, haven't gotten together and forced Congress to reform how health care costs are paid. Companies are getting killed by the ever increasing premiums and there are only so many people they can lay off or replace with foreign workers. If they did get it together, we'd probably see a battle royale similar to the recent banks vs. retailers showdown over credit card swipe fees. If you don't know about that fight, it was what our elected representatives were doing earlier this year instead of trying to improve the job market or get our troops out of the Middle East.

I do agree that there certainly are issues with Health Care cost. The price for med's for example.

However, I have had a few surgeries in my life. Had I not had those surgeries, expensive as they were, I would be in miserable pain these days. Those surgeries and all of the necessities that go into a surgery simply can't be performed by the guy who company X is going to hire locally for some type of manual labor. Surgery and many of these services are performed by men and women who have a rare ability of mind and talent and I made sure to thank my surgeon for the years that he committed to study.

Just like I preach here that no man is born in this World who is required to provide a job for me there is no man born who is required to maintain my health or responsible to fix what ails me. A trade must occur. Unfortunately this is an area where I have to "pay up" for a service that goes beyond my own capabilities. In a society where "brains and ability" are becoming more scarce I think we will find our ability to obtain special services even more difficult.

But again, I tip my hat to those professionals who have that special talent and have directed their abilities in the medical field. With all the liabilities and threats of lawsuits that come with the territory there are easier professions for them to go into.

If your health care is included in your taxes, you will be paying for your own health care. You just won't be paying for an army of people who work for the insurance industry, or for the Promedica Pavilion at Fifth Third Field, or for the (at least) one person in every doctor's office who is there simply to deal with insurance companies.

You might, actually, be paying for health care, instead of handing money to the stick-up guy dressed in an insurance agent's clothes.

Well said.

Our healthcare situation sucks, outside of lifetime caps and pre-exsiting conditions Obamacare fixes NONE of them while handing the farm to big Pharm. We have individual Liberty, there are no such thing as group rights.

Nobody "knows what is best for most people (doctors/scientists)" except you. If we extend that argument Congress and the President "know" that pissing away the nations war chest in the Middle East is a great idea so why are we bitching about it? If we go even further several people "know" that abortion is bad for the fetus and so why are some people fighting to keep federal funding for cleaning up your "mistake" in not using contraception. I mean condoms are cheaper than abortions procedures. Lots of people "knew" that excessive amounts of alcohol where bad for you and Prohibition went over like gang busters. Lots of people "know" that drugs are bad for your body and we dump countless millions into the war on drugs and that seems to be working well right?

If you want to eat yourself to death than do so, but if you do don't come back to the system for extra help. We should be rewarding people who take care of their bodies and not robbing them to benefit those who don't. Bad things happen to good people and certain afflictions can not be avoided, but extending more of other people's money to those who refuse to personal responsibility for their bodies is not the answer. "Free" healthcare does nothing to make people stand up and take care of themselves. But we will clap as our nation gets fatter and we have to pay even more for fast food nation.

Liberty is a tricky bitch

Riddle me this batman...why won't Republicans allow Medicare and Medicaid to negotiate drugs with drug manufactures. This would save Medicare $200 billion over the next 10 years. Nearly every other country and insurance company does this, but for reason Republicans think the government should be paying retail for drugs with our tax dollars.

Sensor, where in the world are you getting the information that Medicare pays retail price for drugs?

Retail might have been the wrong word, but CBO estimates that Medicare alone would save $200 billion over the next 10 years if allowed to negotiate for drug prices. There is some negotiating going on with the Medicare part D insures, but nothing compared to the buying power of US government.

Ah...ok, that makes more sense.

For work purposes, I've done quite a bit of analysis using Medicare costs/reimbursements for various drugs, so I was scratching my head about the retail price comment.

I had thought, perhaps, that you might have been misinterpreting the ASP (Average Sales Price) figure to be retail price. (That would certainly be a logical assumption, given the word "sales" even though that's not what it is.) But now I get what you were trying to say.

(I've been trying to steer clear from commenting on this topic, because of the nature of my work. There's a fine line between what I could appropriately clarify for people vs. proprietary info that I wouldn't be authorized to discuss. Don't want to risk crossing that line. But, since all the datasets for Medicare and Medicaid are public information, its probably safe to make some limited comments about that.)

P.S. As an aside, holland, the payment for your stay was not based on a negotiated rate.

Medicare replacement plans (such as your retiree Medicare plan through OPERS) typically reimburse providers based on Medicare rates. There is no negotiation involved in those payments.

Overall Medicare reimbursement tends to be below what the service actually costs to provide (if not below, then very close - no one makes any sort of profit margin on Medicare).

However, Medicare does make some lump sum payments to hospitals at the end of the fiscal period to "settle up" on the payments made throughout the year. So, in actuality, the hospital will get additional payment for your claim bundled into a lump sum with other patients at the end of the fiscal period. This payment would come directly from CMS. So, the hospital gets the payment from your Humana OPERS plan, and then they'll get an additional payment from CMS (Medicare) as well.

However, you will never actually see that payment reflected, because it isn't made individually on your account.

Its not an apples-to-apples comparison to look at an EOB for a Medicare-related patient like yourself and compare it to an EOB for a commercially insured patient, because of all those additional Medicare payments that are done at the end of the fiscal period.

(Think that sounds convoluted and confusing? So do I, and I have more than a layperson's understanding of it all! Just remember that Medicare/CMS is the originator of most of the more complex reimbursement methodologies. Going to a single-payer wouldn't take away the complexity of the system - it would just shift it around. Maybe your doctor's office wouldn't have as many clerical people up front to check different insurances, but there would be an increase in bean counters on the back end to deal with the type of stuff I mentioned above.)

I'm sorry Maggie our founds would not have approved of NATO.

America does not go abroad in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She well knows that by enlisting under other banners than her own, were they even the banners of foreign independence, she would involve herself beyond the power of extrication in all the wars of interest and intrigue, of individual avarice, envy and ambition, which assume the colors and usurp the standards of freedom. – John Quincy Adams (1821)