Thursday, August 23, 2012
Why is health care so expensive?
My monthly Reader's Digest came in yesterday, and as I was thumbing through it, I came across an article titled" Why Hospital Bill Costs What it Costs" by Kimberly Hiss. You old timers know that whenever we wanted to sound intelligent, we would quote something from the Reader's Digest.
Although I'm clueless when it comes to medical stuff; cost stirs my interest.
The author told a story of a radiologist whose son needed, foot surgery, so he started shopping around for the best prices. The first hospital that he called gave him a quote of $37,000, and then he asked them if that was with his in -network discount and was told, no and they would get back. Someone from the hospital called back later with a recalculated price of $15,000 to $25,000. The radiologist asked a surgeon if he operated anywhere else. The surgeon said that he often used an outpatient center charging $1,515. The radiologists correctly pointed out that with two or three phone calls he saved almost 90%.
We all like our doctor and generally people tend to be pretty trusting of the medical system. When we get our bill, we usually pay our 20%. Sometimes our faith is left in the hands of the medical coders because most doctors cannot explain the complexity of medical billing. For example, the cost of a MRI may factor might be based on buying or leasing the machine, staff salaries. Climate controls electric bill, a competitive pricing, or overhead costs like malpractice insurance. All these coders are trained professionals certified by the American Academy of Professional Coders and they operate on three sets of universal codes, but the system is so complex that many times it's left to their interpretation. The patient may end up paying for a transposition error.
As technology advances those charges rise. There was a patient from Louisville Kentucky who received a bill for $45,300 for prostate surgery and an overnight stay. Why so much? The hospital used the new robotic procedure, so their bill was structured so that the first users were helping to recoup the equipment's initial costs.
The hospitals are not always the villains because they're usually overridden by negotiated contracts they made with the insurance companies and fixed payments by Medicare and Medicaid. Generally, hospitals will try to shift some of the costs not paid by the government to commercially insured patients.
Then there is the outrageous, or it may be a typical billing charge but I thought I would list an example of some hospital costs that may appear on your detailed billing:
1. The marking pen to mark the right body part for surgery...........$17.50
2. Adult blood pressure cuff.................. $20
3. Charge for the nurse to hand your medicine taken by mouth.....$...87.50
4. Pulse Oximeter Probe (pieces put on a finger to measure oxygen)......$100
5. Warmer air blanket..........$113
6. Operating room..........$200 per minute
I barely hit the surface in summarizing this interesting article which should be read by the skeptics who don't think we need to do anything about the rising cost of health care.
My company made me aware of the rising health care costs 10 years ago, so I knew when health care cost became 18% of GDP, it was not sustainable. I knew it would lead to bankruptcies, under utilization, and eventually death for some who are uninsured. I heard an economist say that the "rising health care cost is the Plutonium inside the U.S. “Debt Bomb.” The government already pays for over half of the medical costs in the United States and 10,000 seniors are moving into Medicare every day.
We're going to have to start using the only weapon left at our disposal; we're going to have to start making criminals of those who abuse our medical system. That doesn’t mean that we can’t do our part by requesting detail billing and reporting discrepancies.