The Anatomy of a Ripoff. (Or why "health care" costs are so high)

[TalkingDog]

http://www.nydailynews.com/opinion/anatomy-a-ripoff-article-1.1002077

To shed light on the real value of the medical services my son received, I consulted with billing experts and with administrators at Aetna — though not with representatives of Good Samaritan, who refused to return repeated phone calls. It also happened that my son had a second choking episode two weeks after the first, and the charges for his treatment at Somerset Hospital in Pennsylvania were included on the same Aetna statement. So I was able to compare bills for similar procedures at two emergency rooms.

What I learned was that the numbers printed on hospital bills often bear no relation to reality.

That hospitals grossly inflate their charges, expecting insurance companies to radically cut the bills while hoping to wring bigger fees out of the uninsured.
That the bill inflation can include double-charging for procedures.

As but one example of what I discovered, consider Ondansetron HCl, an anti-nausea medication that both hospitals administered to my son. Good Samaritan charged $439.90 for the drug; Aetna allowed $77.63. Somerset charged $6.52; Aetna paid $3.26.

[NathanTheGreat]

1. I think you missed part of the problem

I think a big part of the problem is the very very few people ever even read those invoices from the doctor, let alone dissect them and pick them apart like you did.

When the customer has no vested interest in the price of the services...it should be no surprise that the service gets more expensive.

[TalkingDog]

2. I didn't miss anything. The author may have missed something, but I am not the author.

You might address your points to him/her.

[NathanTheGreat]

4. You're the author

You're the author of the post

[rfranklin]

5. Where do you come up with "customer has no vested interest in the price...?"

I think most of us can attest to get bills after insurance pays their share and it is often a frustrating and futile process to try to get anything out of the hospital or other providers. They know they can stonewall you just as the one hospital did in this story. Most of the time, people just pay these charges to avoid bill collectors. But the system is rigged against the consumer all around. I suspect you have no experience with our wonderful healthcare system.

[NathanTheGreat]

7. I have a lot of experience

Maybe I have had better insurance than most, but I've pretty much paid set co-pays for every service I've ever had done by a doctor. Maybe I shouldn't get so whiny when they take a $20 for a copay.

[rfranklin]

10. People with insurance go bankrupt after significant medical emergencies...

Medical bills prompt more than 60 percent of U.S. bankruptcies

June 05, 2009|By Theresa Tamkins

This year, an estimated 1.5 million Americans will declare bankruptcy. Many people may chalk up that misfortune to overspending or a lavish lifestyle, but a new study suggests that more than 60 percent of people who go bankrupt are actually capsized by medical bills.

Bankruptcies due to medical bills increased by nearly 50 percent in a six-year period, from 46 percent in 2001 to 62 percent in 2007, and most of those who filed for bankruptcy were middle-class, well-educated homeowners, according to a report that will be published in the August issue of The American Journal of Medicine...

....Overall, three-quarters of the people with a medically-related bankruptcy had health insurance, they say.

http://articles.cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH

[Quantess]

3. I remember a few years ago

they gave me a routine pregnancy test before surgery, and charged me over $100, I saw on the statement.

Shit, they sell pregnancy tests at the dollar tree.

[rfranklin]

6. Does the Dollar Store carry liability insurance?

Not defending most of the absurd charges but you are dealing with apples and oranges. You probably can't sure the manager of the Dollar Store if the pregnancy test fails.

[Quantess]

9. Oh, I know.

But it was moot anyway, since I knew I wasn't pregnant. They routinely give a pregnancy test to all women who seem fertile, before surgery, even if you tell them "there's no way I'm pregnant".

I think it was closer to $200 but I can't remember for sure. It was in 2006 or 2007. Everything on the bill was inflated wildly.

[xmas74]

11. They use the same test at the local health department as they

do at my doctor's office and they test me every single time.

Price at doctor's office? $25.00. (This is after I talked them down quite a bit in price.)

Price at health department? $5.00

[KansDem]

8. Decades ago my sister worked as a dental assistant, then in the front office in billing

She told me you could trust only about 10% of the dentists (I don't know where she got her statistic) and went on to say she personally knew dentists who would inflate charges based on a patient's status:

In order from least to most likely--
1) Patient paying out of pocket;
2) Patient with private insurance;
3) Patient on public health assistance (Medi-Cal--this was in California)

The most victimized patient was the one on public health assistance. For example, my sister would see a lesser-costing material being used on the patient's teeth but the most expensive material charged on the bill. She worked for several dentists during her "career" and saw this constantly.

[davepdx]

12. The rationales for determining charges and implementing charges can be schizophrenic

In the early 90's the administration at the hospital where I worked decided that there needed to be a uniform manner for determining how charges for supplies were determined and set (which I thought was a good idea). Without the benefit of any input that I am aware of, the administrator responsible for the purchasing department sent out a memo to all department heads and managers indicating that supplies of any nature used throughout the hospital were to be charged at the rate of 300% of the actual price - no exceptions. I pitched a fit at the very next department head meeting.

As background (in my field of nuclear medicine) Medicare knew exactly how much vendors were charging for the more expensive radiopharmaceuticals and the hospital reimbursement for the more expensive radiopharmaceuticals was tightly regulated. At that time a new therapeutic radipharmaceutical, Strontium-89 chloride, had just been released. The vendor charged everyone a uniform price of $2000 for a single dose. It was a one time administration so only one dose was used for each patient that required the therapy. There were no discounts for anyone from the vendor.

Under this administrator's nutbag idea of a policy we would have had to charge $6000 for this therapy radiopharmaceutical! I explained to the group that Medicare would only reimburse $2000 and that it didn't matter how much we charged - there was an upper limit on what Medicare would reimburse. I said that Insurance companies would know what the Medicare reimbursement rates were and would tend to adjust their reimbursements accordingly. At that time insurances did tend to reimburse more than Medicare. But the clincher was that the uninsured individual who had terminal cancer would get hit with the full $6000 bill for the radiopharmaceutical. This made my head spin around. I said that I thought that $2000 for the isotope was an unconscionable charge to begin with but I couldn't control that. I could influence what we charged the patient though.

The end result is the policy was put on hold and was rather quickly forgotten about. The rationale for how charging decisions are made can get fairly complicated and often, like the case I describe, don't make sense. Then you start looking at how charges are rationalized and vary from institution to institution you can begin to see how sometimes wide disparities in charges develop. I'm not making excuses for this situation, but rather I'm describing my experiences.