Our health care system is crazy

Here’s a case that isn’t remotely touched by the ACA. Because the ACA works with the existing insurance system, and our insurance system is a large part of the problem.

Out of network emergency care rings up $300k bill

Short version: this woman had a heart attack, got rushed to the nearest hospital, and got charged $300k. If she’d gone to an in-network hospital, the charge would have been $1500.

In passing, this demonstrates why people like Rand Paul are being willfully stupid. I’ve seen Paul claim that competition will lower health care prices if we let it, since it’s done so for elective treatments like LASIK. This woman would obviously have chosen a $1500 charge over a $300k charge, but since she doesn’t live in Paul’s fantasy land, she was in no condition to comparison shop.

There’s also the question of why the before-insurance bill is so high. While I’m not privy to all the facts, it seems completely unreasonable. This is not an end-of-life extended stay for cancer or something, which is the usual example. This is a relative short course of emergency treatment. I can’t imagine that this was really $300k of anyone’s time.

In the ongoing discussion of health care, one common Conservative argument is that we “can’t afford” to pay for health care for everyone. I think one reason why we have that perception is that the quoted original costs are often grossly inflated. The UK has universal health care because the real costs are not as high as depicted on hospital bills.

My recollection (from back in the 90s) is that the inflated “before insurance” cost was a function of how hospitals did pricing. For example, insurance companies would demand (or hospitals would offer) 50% off the “regular” price as the price for the insurance company. Since the vast majority of patients came in with insurance, the logical thing for the hospital to do was the increase the “regular” price by a significant amount which would make 50% off that price more palatable to the hospital – while still allowing the insurance company to think it was getting a 50% discount. What I don’t remember is whether it was insurance companies demanding a massive % off from the “regular” price or whether it was hospitals offering a massive % off that price that started this cycle (the truth is probably somewhere in the middle).

I’ve seen hospital bills (from when my kids were born) where the insurance company got 80% off the “regular” price for various portions of our hospital stay. The only way you can offer 80% off of anything (without taking a loss) is if your prices are so inflated that you have at least a 400% profit margin. I don’t think hospitals are in the business of taking losses – they’re generally working hard to stay afloat – so if those services aren’t offered as “loss leaders” then the logical conclusion is that the “regular” price isn’t regular at all – it’s a theoretical price that only gets charged to a very small % of people.

Also, never pay retail.

It’s probably worth noting that the woman has little chance of actually every having to pay anything close to that amount.

A follow-up article notes that her insurance paid $156K of the amount, and that the hospital reduced their bill by $90K. The article says she’s still considering bankruptcy because the $40K she still owes is more than she can afford, but I bet that the lawyers will work something out before that happens.

I am actually fairly interested in the medical details of his case. The first article made it sound like a “typical” heart attack, but the article above makes it out to be much more serious - she went into a coma and was in the ICU for 10 days followed by a week in a cardiac recovery unit. She’s also only 30 years old and looks pretty fit from the photo… so whatever the problem, it’s was probably more than your typical clogged veins.

Now, that doesn’t change the fact that the situation with her insurance is screwed, but it implies that the hospital that she was taken to might not just be price-gouging. I (thankfully) don’t have much experience with long-term hospital stays, but my impression is that a 17 day stay in a hospital is an unusually long time.

True, though even $40k is a lot more than $1500. Even if the lawyers do manage to resolve things to the point where she doesn’t have to declare bankruptcy, it strikes me as broken that lawyers should have to get involved at all. She had insurance. Insurance is about covering emergencies, the unusual and unexpected, and in this case it failed spectacularly. “Which hospital is approved by her insurance” should not be part of the decision making process for EMTs.

First, let me stipulate that I agree that insurance and medial coverage in the US is a fucked-up system, and in no way am I trying to say that it isn’t.

And of course, the cost of which hospital to go to ISN’T part of the EMT’s decision-making process, and I’m not sure that it can be, by law.

But in defense of Blue Cross/Blue Shield, they paid 87% of the costs here, either through direct payment or negotiation with the hospital. They didn’t just throw up their hands and walk away from the woman. The way our crappy, mercenary, US system works, the insurance companies try to keep costs down by funneling you to hospitals and doctors that they’ve cut a deal with, and unfortunately that includes ER facilities.

The other missing piece to the puzzle is the circumstances behind the woman getting the plan. Was it the only one that her employer offered? If so, then she’s completely blameless and this is an excellent example of why employer-provided coverage sucks. Did she take a cheaper plan that specified that ER costs would be more for out-of-network, but figured that driving herself three blocks further would never be an issue? If the latter, then she rolled the dice and they came up as a one-in-a-million set of four snake-eyes, and now she’s paying the price; an excellent example of why free-market philosophies and medical insurance don’t mesh well together.

Part of what’s going on here might be related to something I read about in the Washington Post a few weeks ago. They had a story about how you might go to an Emergency Room that’s on your plan, but be served by doctors who aren’t - and in fact, a lot of Emergency Room doctors don’t take any insurance at all. So you can go to an in-plan ER visit and still get hit with tons of out-of-network care bills.

Link to the article: http://www.washingtonpost.com/business/tendon-surgery-sheds-light-on-the-lack-of-clarity-in-some-out-of-network-pricing/2014/10/10/a2646334-50ad-11e4-8c24-487e92bc997b_story.html

In other awesome health care news, a guy I worked with just got an operation. He was very meticulous to make sure he got pre-approved for all the procedures. However, when looking over the bill afterwards, he found a charge for a couple thousand (something like $2500) that he couldn’t account for. After spending about half a day on the phone between the hospital and various doctor’s offices, it turns out that one of the medical services he was using (I think it was the anesthesiologists) routinely send an additional doctor/intern to “observe” the procedure - this was someone not mentioned or accounted for in any of the pre-approval checks. They told my friend that they do this so the person can observe, and they bill the hospital/patient because sometimes the insurance companies pay the bill without putting up a fuss. In his case, the insurance didn’t pay and tried to pass it on to him. But when he complained, they dropped the charge. That’s our glorious healthcare system in action!

Drive by doctoring. It’s immoral.

Before his three-hour neck surgery for herniated disks in December, Peter Drier, 37, signed a pile of consent forms. A bank technology manager who had researched his insurance coverage, Mr. Drier was prepared when the bills started arriving: $56,000 from Lenox Hill Hospital in Manhattan, $4,300 from the anesthesiologist and even $133,000 from his orthopedist, who he knew would accept a fraction of that fee.

He was blindsided, though, by a bill of about $117,000 from an “assistant surgeon,” a Queens-based neurosurgeon whom Mr. Drier did not recall meeting.

You have to read the whole article, but the gist of it is patients sign forms that allow this to happen, and then doctors they don’t know and never talked to stop by to observe after surgery and charge outrageous fees, and often these doctors can be out of network. It borders on being criminal in my mind. It’s a kind of fraud.

I have no idea how they can even charge $117,000 for a guy just observing for a few hours. That’s like the cost of Med School alone.

I remember when my son was born maaaaany moons ago, there was a charge for every single pediatric doctor on the hospital floor even though only one ever saw him. Apparently, that was per the hospital’s guidelines as they were technically all “on call, just in case.” It was obnoxious then, and that practice just seems to have gotten worse in some places.

It’s the magical intersection of two hopelessly corrupt systems that pass the bill on to everyone else.

Yes, and since medical care is so complicated we can never hope to be educated consumers about it. That, and there’s not a lot of time to research when you’re making a run to the ER. I wish we would just completely socialize medical care. There’d be room for a private market for the wealthy who want to pay for extras like private rooms, etc.

Universal health care, people. You even get to keep your guns, you just don’t end up bankrupt if you get shot by one.

That’s pretty much what I’m thinking these days. Health care often has most of the characteristics of a monopoly, in that you really don’t have a choice as to who you’ll use in an emergency, and not much information when it’s not. We’ve dealt with situations where monopolies are pretty much unavoidable by heavy government regulation of the prices. In this country, it’s clear that often enough hospitals charge whatever they want and the patients don’t know or don’t have a choice.

Healthcare.gov open enrollment round 2 starts tomorrow! It’ll be interesting to see if they’ve truly managed to fix the load issues.

Oh man. That is an awesome soundbite. Totally stealing that!

So the Canadian system, a few anecdotes:

My nephew required open heart surgery at the age of 1 month. Heartbreaking at the time, but it was like science fiction, the technology and level of care he received. I’m sure it was a hundred grand at least. Thank you Canadian taxpayers!

My mother in law needed an MRI. She was told the wait time was two months (which I think would be shorter if the doctor actually thought it was cancer). The thought crossed our mind as to paying for one privately to get it right away. In any case she was called the next week and brought in as a spot had opened up.

When I broke my toe I had to wait in emerg for like 5 hours, it was a busy night. That sucked but the care I got when I went in was great.

Baby was born a month early, hospital said it was our choice if we wanted to stay an extra night. We also had excellent care, even though the ward was insanely busy just like the TV shows.

My wife works in a hospital. They’re basically publicly funded but privately run, and cost efficiency and value for dollar are core. One of her projects was to evaluate a new mental health ward. Business case analysis (evaluate the market for patient base, competition from other hospitals, cost of equipment and staff, anticipated revenue, quotes from multiple vendors, consultant input). They went for it.

Above said, wife has stories about total inefficiency and blatant wastes of resources too.

American healthcare is like everything else American: everyone thinks they’re above average and they don’t want to risk what they view as a degradation of their above-average position, if all the below-average people have to be covered. Basically, we’re scared of being “dragged down”.

Of course, 1) how can everyone be above average, and 2) healthcare is a complex ecosystem, so you can’t assume some sort of finite quantity of care that has to be redistributed if we go universal.

I love the fundamental concept of the American dream that says that everyone can get ahead. It’s the core behind why we excel at so many things. It can also be a huge source of self-delusion and selfishness, since getting ahead is about focusing on me and mine (nothing wrong with that, in moderation). The frustrating thing about healthcare, in particular, is that people fail to realize that we would all get ahead, if we pulled it together.

The above average notion (you get what you pay for) just isn’t true when it comes to healthcare as a whole. The U.S. System is the most expensive in the world AND consistently ranks towards the bottom of first world countries for quality. Various reports over the last 15 years have placed it between #10 and #38. For comparison: The 2000 WHO report that ranked the U.S. 38 showed Cuba at 40.

I really can’t imagine the US system, being from Canada I hear quite a few scary stories. My daughter is immune-compromised, so we usually spend 4 weeks (day or two here, week there) throughout the year in the hospital on oxygen support and antibiotics.

Those stays are stressful, in Canada. You are worried for your sick child, modern medicine is pretty awesome but stuff can still go bad. You are sleeping at the hospital on very little sleep. Entertaining and caring for a sick small child. Balancing work and hospital and extra child care (for other kids). You still have your bills to make and now you are also eating breakfast, lunch and supper at the hospital (who have fairly high cafeteria prices). It’s stressful. I cannot imagine if I also had to worry about whether insurance will cover it. Or will I have to spent a bunch of hours phoning and fighting with insurance and medical offices to reduce bills. Or whether that resident was “on plan or off plan”. Or whether this time my child will live but I will be in debt for the rest of my natural life. Maybe this is bias only based on news media, but I am surprised anyone is willing to accept that increased stress at an already stressful time.

The WHO report is questionable in its value for comparing the US and Canada—the criteria the WHO used in 2000 would rank a socialized system higher than a non-socialized system, even if they were exactly identical in outcomes and costs, because the socialized system by nature will tend to distribute costs more evenly (the stick-the-young problem, if you want to call it that).