Bitter Pill: The Exorbitant Prices of Health Care

[PA Democrat]

Steven Brill talks to TIME about his cover story on the outrageous pricing and egregious profits that are destroying our health care.



http://www.time.com/time/video/player/0,32068,2178453595001_2136781,00.html

The article accompanying this video is a must-read for everyone confused about why health care costs so much more here in the US. I've extracted this from the extensive article about an uninsured woman, Janice, who goes to the emergency room with symptoms that could be a heart attack. Fortunately, she is diagnosed with a case of indigestion, but the bill for a few hours in the emergency room was $21,000. If Janice had been a year older, she would have had Medicare and Medicare would have paid the hospital SIGNIFICANTLY less than the hospital billed Janice.

Because she was 64, not 65, Janice S. was not on Medicare. But seeing what Medicare would have paid Stamford Hospital for the troponin test if she had been a year older shines a bright light on the role the chargemaster plays in our national medical crisis — and helps us understand the illegitimacy of that $199.50 charge. That’s because Medicare collects troves of data on what every type of treatment, test and other service costs hospitals to deliver. Medicare takes seriously the notion that nonprofit hospitals should be paid for all their costs but actually be nonprofit after their calculation. Thus, under the law, Medicare is supposed to reimburse hospitals for any given service, factoring in not only direct costs but also allocated expenses such as overhead, capital expenses, executive salaries, insurance, differences in regional costs of living and even the education of medical students.

It turns out that Medicare would have paid Stamford $13.94 for each troponin test rather than the $199.50 Janice S. was charged.

Janice S. was also charged $157.61 for a CBC — the complete blood count that those of us who are ER aficionados remember George Clooney ordering several times a night. Medicare pays $11.02 for a CBC in Connecticut. Hospital finance people argue vehemently that Medicare doesn’t pay enough and that they lose as much as 10% on an average Medicare patient. But even if the Medicare price should be, say, 10% higher, it’s a long way from $11.02 plus 10% to $157.61. Yes, every hospital administrator grouses about Medicare’s payment rates — rates that are supervised by a Congress that is heavily lobbied by the American Hospital Association, which spent $1,859,041 on lobbyists in 2012. But an annual expense report that Stamford Hospital is required to file with the federal Department of Health and Human Services offers evidence that Medicare’s rates for the services Janice S. received are on the mark. According to the hospital’s latest filing (covering 2010), its total expenses for laboratory work (like Janice S.’s blood tests) in the 12 months covered by the report were $27.5 million. Its total charges were $293.2 million. That means it charged about 11 times its costs. As we examine other bills, we’ll see that like Medicare patients, the large portion of hospital patients who have private health insurance also get discounts off the listed chargemaster figures, assuming the hospital and insurance company have negotiated to include the hospital in the insurer’s network of providers that its customers can use. The insurance discounts are not nearly as steep as the Medicare markdowns, which means that even the discounted insurance-company rates fuel profits at these officially nonprofit hospitals. Those profits are further boosted by payments from the tens of millions of patients who, like the unemployed Janice S., have no insurance or whose insurance does not apply because the patient has exceeded the coverage limits. These patients are asked to pay the chargemaster list prices.

If you are confused by the notion that those least able to pay are the ones singled out to pay the highest rates, welcome to the American medical marketplace.


Read more: http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/#ixzz2LdJ5icnU

[wilt the stilt]

1. I have been for single payer for a long time

When I started my own company I realized how bad it is. Ask you congressman to explain a health policy when you buy your own. I can guarantee they can't.

[PA Democrat]

3. My husband and I are self-employed and health insurance

is a major source of stress for us. We always say if the people in congress had to put up with what we do, they would pass single payer in a heartbeat.

[wilt the stilt]

4. they have no idea

that a family policy is nothing but 4 separate policies. I had Blue cross and I had the most popular policy. does this sound familiar?
$2,000 deductible for each member and $5,500 out of pocket per person. the children out of pocket is combined(family policy LOL) 70%- 30% split. $350 per person for RX before anything kicked in.

They have every plan rigged so even if you get the more expensive policy the costs are still the same.

sure is fun.

[PA Democrat]

5. Yes, it sounds very familiar.

We figure that our insurance company has pocketed about 98% of our premiums because of the deductibles.

[02potato]

2. here it is again...enjoy!

drug
http://www.democraticunderground.com/101738228

insurance
http://www.democraticunderground.com/1002109583