The bizarre calculus of emergency room charges

[Shakespear]

Why does this seems like a Sci-Fi story?

Debbie Cassettari had outpatient foot surgery to remove a bone spur. She arrived at the surgery center at 8 a.m., left at 12:30 p.m., and the bill came to $37,000, not counting doctor fees. In recovery now from sticker shock, she's waiting for her insurance company to do the tango with the clinic and figure out who owes what to whom.

Gary Larson has a $5,000 deductible insurance plan, but has found that his medical bills are cheaper if he claims he's uninsured and pays cash. Using that strategy, an MRI scan of his shoulder cost him $350. His brother-in-law went to a nearby clinic for an MRI scan of his shoulder, was billed $13,000, and had to come up with $2,500.

Kaiser member Robert Merrilees had a colonoscopy at an affiliated surgery center, which charged $7,500. His co-pay was $15, Kaiser picked up $470, the rest of the bill "just went away." Merrillees was left scratching his head over the crazy math in medical billing.

There is lots of head-scratching out there, and stories like these have poured in from across Southern California and beyond since I wrote last week about an 11-year-old girl and her $5,000 trip to an emergency room with a stomachache.

http://www.latimes.com/health/la-me-...6799675.column

[jk]

Re: The bizarre calculus of emergency room charges

Why does this seems like a Sci-Fi story?



http://www.latimes.com/health/la-me-...6799675.column

it reads like sci fi because it's about the micro economics of the american private health care system. insurance companies don't pay the sticker price for medical services, anymore than hertz pays msrp for the cars it buys. as volume purchasers, they negotiate huge discounts to the posted prices. meanwhile service providers must make sure that their posted prices are high enough to capture whatever an insurer might offer: they don't want to only bill x when an insurer might be willing to pay x+y, so posted prices will always be above the highest rate offered by any insurer. sometimes an out-of-pocket patient will be billed the posted price, but sometimes they will only be billed the marginal cost.

the other contributer to high prices is the cost of maintaining facilities. in general, prices cannot be based on the marginal cost of one extra service; facilities costs are too high for that- they must be amortized in the prices. so when you visit an e.r., you are not just paying for the doctor's time, the receptionist's time, the nurse's time, the x-ray tech's time, and so on, as well as the cost of keeping the lights and heat or air conditioning on. you are also paying for building and maintaining the facility, the cost of the mri machine, and the cost of malpractice insurance. [i know a neurosurgeon who switched to doing hair transplants when his malpractice policy hit $200k/year. and facilities can't guarantee good outcomes - their patients are often sick, after all - and thus are routinely sued by unhappy customers or their survivors.]

[Southernguy]

Re: The bizarre calculus of emergency room charges

A neurosurgeon doing hair transplants...?
What a waste of expertise, practice, etc. Only capitalism can do such absurd things....

[vinoveri]

Re: The bizarre calculus of emergency room charges

Why does this seems like a Sci-Fi story?



http://www.latimes.com/health/la-me-...6799675.column

It really is somewhat shocking when you encounter it personally.

I had a cycling accident a few weeks back and fractured some ribs and some vertabrae (fortunately nothing of long term consequence).
I spent one night in the hospital, had x-rays and a CT scan. The hospital bill alone (excluding doctor charges) came to $20k!. The insurance paid $5k, and I had a $250 copay.
Heaven help those without insurance. My brother is a surgeon and he tells me it's all a game being played between the insurance carriers and health care providers.
Health care in the US is terrific when you get it ( you may however be bankrupt soon thereafter depending on your malady).

[lektrode]

Re: The bizarre calculus of emergency room charges

+1 on the cycling incident...
bounced off a small tourbus a few years back (2005), was briefly unconscious, came to as they loaded me into ambulance, told em to take me to my provider, they said have to goto nearest trauma ctr, ok fine...
just over 2hours total elapsed time from moment of impact to return to the scene, cost over $15000, incl MRI.
since a motor vehicle was involved, the mandatory PIP coverage came into play (10k for a commercial carrier??)
my provider denied the claim, since a motor vehicle was involved, but i protested that they had a duty to cover NO MATTER how or why i was injured - they then said that i owed copays of several thou - told em that the 10k payout of the motor carrier was my copay - took over 2 years to sort it all out, along with threats to all 3 parties that if they kept hounding me i was filing complaints with regulatory authorities and finally it was over.

take away on this one?

even if you are paying thousands of bux/year for 'insurance' one still is left with the idea that when it really matters, the only way one gets what one is paying for is to threaten legal action.

can just imagine what it will be like with the 'new and improved' plan (if it isnt shot down by SCOTUS)

[charliebrown]

Re: The bizarre calculus of emergency room charges

+1, +1, +1, ...

all agreed. It is a lottery. Hope you don't get hurt, and hope that your insurance will pick up most stuff if you are hurt. Otherwise you're BK.
I assume the same denial of coverage stuff will exist with 'bamacare, but you cannot fight the gvt.
I had an empolyer go chapter 7 on me, days after a big bill. Guess who is responsible then? you are, and no insurance negotiated rates for you!

Other solutions are to get into the 1% so a 100K bill isn't any sweat, or spend all your money on wild living, so there is nothing left for them to take.
Savers beware.

[lakedaemonian]

Re: The bizarre calculus of emergency room charges

Immediately following the Feb/11 earthquake in NZ I shifted my family to the US for a few months while I helped with the rescue/recovery.

We did take out insurance, but when we took out a claim the company found reason to deny it(claiming my family was permanently resident rather than visiting based on their visit length of just over 90 days).

Our oldest had a bad ear infection on a Sunday morning.

Rather than have him continue in pain until Monday my wife took him to the Hospital Emergency Room on Sunday midday.

After a 2-3 hour wait my son was seen by an ER doc for approximately 2 minutes.

He was prescribed some antibiotics.

We were billed just over $1100US.

While we are fortunate to be able to afford it, it is simply insane.

The biggest issue we have is the complete lack of non-emergency options outside of bankers hours in the US.

In NZ we have numerous "24 hour surgeries" that are well equipped to act as after hours GPs and minor emergency care facilities and pharmacies to keep patients from going to the higher cost basis emergency rooms and are reasonably priced.

And NZ is a place with quite limited business/retail hours of operation and lower economies of scale compared to the US.

In the US, with very aggressive, highly saturated, and often 24/7 retail hours I find it amazing their is no 24/7 non-emergency health care option.

Where's the McDonald's of healthcare in the US?

I recently had the opportunity to work with a few Docs/PAs from the US who all work together in private practice(when not in uniform). They seem to have a progressive/unconventional practice focused on a limited number of patients who they nag relentlessly to maintain their patients health. Their business model seems based on "getting paid to KEEP them healthy" based on ensuring smart lifestyle/activity/food choices to improve/extend patient quality of life. They seem to have some good success in getting patients off drugs prescribed by their former physicians. It was interesting to learn of their efforts to ween their patients off of many(though not all) drugs. I'm probably not describing it perfectly, but it certainly sounded like an intriguing and common sense approach to health. They all seemed unanimous in their push for Statins though for pretty much everyone over about 40 it sounded like.

They are also investigating the development of stem cell clinics in locations where it's possible to practice systemic stem cell therapy.

I hope systemic stem cell therapy actually fulfills the promise of additional years of higher quality of life as claimed.

Bit it certainly sounds quite politically charged.

They were all strong opponents of ObamaCare.

[Starving Steve]

Re: The bizarre calculus of emergency room charges

I had brain surgery in Victoria, British Columbia, Canada. The cost to me: not one-cent. Under socialized medicine, the government pays for everything, and you get the best surgery, the best equipment, the best medicines, and best doctors in the world.

It's about time the idiots ( the Republicans and conservatives ) in the southern U.S. started to wake-up and realize that complete socialized medicine is the way America has to go. That is the future, because it is the only plausible future for America.

My only objection to Victoria General Hospital in Victoria is the solar-powered parking-meters, outside of the Emergency Room entrance. Those are totally inappropriate for a hospital setting, anywhere.

[dcarrigg]

Re: The bizarre calculus of emergency room charges

See the map below. Nations with universal healthcare are in orange. Nations with legislative plans to achieve universal healthcare are in yellow. Nations for which the United States pays for universal healthcare are in brown. That's right, my fellow Americans. Your taxpayer money goes to universal healthcare for Iraq.



Now having looked at that map, it becomes painfully obvious that the U.S. is not in the best of company on this issue.

Meanwhile, let us take a look at costs.



Yup. We've pretty much screwed the pooch. The funny thing is, I can't see who wins in the American system except for insurance executives and medical device manufacturers ("an NMR machine on every corner"). Everybody else loses. Even doctors and the low-level insurance bureaucrats.

Talk about wagging the dog.

[jk]

Re: The bizarre calculus of emergency room charges

other winners are big pharma, high level health system execs and the politicians who get greased by the insurance and pharma industries.

[dcarrigg]

Re: The bizarre calculus of emergency room charges

other winners are big pharma, high level health system execs and the politicians who get greased by the insurance and pharma industries.

Big pharma's clearly a winner. Who do you mean by health system execs other than insurance company execs? I'm figuring hospital execs. That's true. The politicians get cash out of it at campaign time, for sure, but the health money's chump change compared to the FIRE. Actually, the whole damn health industry in the 2008 presidential election on both parties only contributed about triple what Sheldon and Miriam Adleson contributed to Gingrich's ill-fated 2012 presidential primary run alone. It's worth thinking about. $45M is small change now that billionaires can get in the game unfettered.

[jk]

Re: The bizarre calculus of emergency room charges

i'm sure the health industry is small change compared to fire, overall. however, for pols on the right committees and subcommittees, i suspect they loom large. [e.g. the billy tauzin's of washington.]

[dcarrigg]

Re: The bizarre calculus of emergency room charges

i'm sure the health industry is small change compared to fire, overall. however, for pols on the right committees and subcommittees, i suspect they loom large. [e.g. the billy tauzin's of washington.]

Oh, there's no doubt in my mind that you're correct. Still, how long can that simple fact continue to perpetuate a super-expensive, broken system? And how can anyone claim it's anything but broken when health care costs twice as much as everywhere else in the first world with no measurable increase in lifespan or wellness?

Perhaps it would be useful to play another mind game. Let's swap out deciding to buy a vehicle for deciding what sort of health care system to have.

That's like paying $60k for a Toyota Camry because your friend works for Toyota. Plus other mid-size cars are scary - what if they break down? You've never driven a Taurus. Better to pony up the $1,200 per month payment on the devil you know, you think...

When you think of it this way, what we do is almost the definition of irrational. Yet here we are. And if SCOTUS strikes the whole law down, the trend over the last couple of decades will definitely hold, because nothing will have changed. Prices are doubling every 20 years even in times of relatively low overall inflation. Already it costs twice as much for the same basic thing (a midsize car or healthcare system) than anybody else pays. How long can ideology and special interests win over the pocketbook and lifestyle of American citizens? How much of average compensation can go towards health insurance before we hit the breaking point? These are good questions, to which I don't know the answer.

I do know that the healthcare system in the U.S. makes us less competitive for industry. It adds a lot to the hiring cost. Shouldn't there be enough lobbyists on that side to balance the see-saw by now? Or do they just not care and build a plant in Hamilton, ON instead? Who knows. But I know that these numbers don't speak so highly for the American system:

[BK]

Re: The bizarre calculus of emergency room charges

Do these numbers really help to understand healthcare...consider the populations and the homogenous make up of the population vs the United States.........statistics lie....
Country Population
Australia 23 Million
Canada 34 Million
France 65 Million
Germany 82 Million
Japan 128 Million (and lets agree its not a very diverse population - may distort health statistics)
Sweden 9 Million......

United States 330 Million

[lektrode]

Re: The bizarre calculus of emergency room charges

yo dc... howzit...

happy (fill in the holiday of yer choice) weekend to you!
here at SLC killin time waitin on the bus with wings....

Big pharma's clearly a winner. Who do you mean by health system execs other than insurance company execs? I'm figuring hospital execs.

would think its actually the insurance execs rather than the provider execs, wouldnt you?
i'm just offering annecdotal obs here, meaning that we dont seem to hear about huge salaries or bonuses from the hospital operators??

and eye got a question here:

any breakout of data from the 'other' column?