Another example of broken healthcare insurance system

[safari]

My wife recently had to do an MRI for her chronic shoulder/arm pain issue. The medical office asked her if she would like them to claim the procedure through our insurance or pay cash. We have a high deductible PPO, so she figured we would have to pay for it out of pocket anyway, but at least it will go toward deductible for the year. So she told them to bill insurance. They submitted a claim for almost $1,000, which insurance adjusted a bit, but we still have to pay over $900 for the procedure. When she asked the office why it was so expensive, they said that was the price when going through insurance, and if she had decided to pay upfront, they would have given her a 40% off discount, but now it's too late because they already filed it through insurance. What I don't understand is how is it even legal for a medical office to claim a much inflated cost through insurance, compared to the cash price? And this wasn't some small private practice - I am talking about a well known hospital. If everyone is billing insurance 40% more than they would take without insurance, no wonder medical insurance is so expensive!

[TexasHusker]

Hospitals are at the core of the healthcare finance crisis. They are exercising rape and pillage.

[greenskeeper]

this story doesn't add up

[disneysteve]

this story doesn't add up

Why not? Most hospitals will discount fees for cash payment.

[amarowsky]

Just read the book, “The Price we Pay” by Marty Makary (he’s a Jons Hopkins surgeon, and closer friend to one of my favorite podcast researchers, Peter Attia). I will include my Anecdote (you get to hear about my amputation!) in the 1st paragraph, and the one from “the price we pay” in the 2nd paragraph.

Health care run away cost in the USA has become close to my heart. Not sure if I had told anyone on this forum yet, but December 24, 2018 - I was on holiday with my wife and friend in Thailand. Long story short, we got into the country and within an HOUR i had a totally freak accident (while gripping a boat rail, my hand was caught between a dock and the boart and my hand was injured badly). I wound up losing the top digit of my middle finger (it was amputated from the injury, and re-stitched back on, but it did not maintain adequate blood flow, so we chose to remove it). So I spend 4 nights in the hospital (Mahachai - THailand) with 2 surgeries on 2 of my fingers. After 4 days round the clock care + medicine + x rays + surgery = Out the door cost of 255,000 Baht = ($7500). Since i have gotten back to the states, the mere Observation of my hand with NO care has basically cost me 50% of all the real care in a foreign country. The same care in the states would have easily been $90,000 (or higher). And the American surgeon told me, bluntly, that based on the condition of my amputation and surgery, they couldn’t have done a better job here (if even as good of a job, turns out I had a talented hand surgeon inThailand).

I read one anecdote in the book that is worth Sharing, to show how significant the failures are of our insurance systems and hospital runaway pricing. SO there was a family from France that came to the states for vacation. The Dad (lets say he was ~50) had a minor heart attack/episode when he was here in the states. They were able to stabilize him w/ medicine, so he was OK. But they told him he would need some heart surgery in the near-future. One of the Hospital (sales?) people approached the family and spoke to the guy. THey told him $125k was the price if they were to the surgery in America (he didn’t have American insurance). Because they had enough time to call back home to France, they contacted their primary care physician and he was able to get back w/ a price of $15,000 for the same surgery in France with their care. SO the family told the US hospital they would get the surgery back @ home.
SO the hospital sales guy comes back and says “Just talked to XXXX (management) , and we can do the surgery for 85k now”. The family naturally said NO, and was puzzled.... (What had changed in the past day that reduced the price by 40,000$?!?). TO make matters even more, “used care sales-ish”, the sales man came back to the patient and said, we can do a “rock bottom” price of $35,000 to do the surgery here if you can commit NOW. So they left, puzzled and confused, back to France and completed their properly price controlled surgery w/ no issues.

For people outside of the health industry, like me. THis book was a huge eye opener, and really pointed a spot light on some trouble areas. Our doctors, nurses, and care givers are not the issue (*in like 95% of cases). It seems to be the business middle men (billing ) , insurance companies WILD discounts, and hospital run-away pricing that is the primary cause. It made me sick when Marty had explained that several LARGE hospitals are now hiring “Revenue departments” like Directors, and analysts (sales men) to try and increase profits..... makes me f**king sick that anyone could justify making $$$ off of a patients emotionally rational want to stay alive, by paying irrationally high prices that hamstring progress. The light @ the end of the tunnel @ the end of the book, is that there are a lot of super capable, communicative, and respected people who are working to drive some change and bring these prices back to the gravity they were (even back to 20 - 25 year ago prices) would be a great start....

Highly recommended this book (it’s great on audible) —-> https://www.martymd.com/books

[creditcardfree]

Health care run away cost in the USA has become close to my heart. Not sure if I had told anyone on this forum yet, but December 24, 2018 - I was on holiday with my wife and friend in Thailand. Long story short, we got into the country and within an HOUR i had a totally freak accident (while gripping a boat rail, my hand was caught between a dock and the boart and my hand was injured badly). I wound up losing the top digit of my middle finger (it was amputated from the injury, and re-stitched back on, but it did not maintain adequate blood flow, so we chose to remove it). So I spend 4 nights in the hospital (Mahachai - THailand) with 2 surgeries on 2 of my fingers. After 4 days round the clock care + medicine + x rays + surgery = Out the door cost of 255,000 Baht = ($7500). Since i have gotten back to the states, the mere Observation of my hand with NO care has basically cost me 50% of all the real care in a foreign country. The same care in the states would have easily been $90,000 (or higher). And the American surgeon told me, bluntly, that based on the condition of my amputation and surgery, they couldn’t have done a better job here (if even as good of a job, turns out I had a talented hand surgeon inThailand).

So sorry about your hand! Appreciate the book recommendation. There are some harmful procedures and treatments done by our sick care system. These are have to be part of the problem as well, which the insurance companies have evaluated as risky thus raise the premiums and costs. There are procedures that are just as effective but the makers of the other more harmful treatment have convinced someone (hospitals, doctor's, lobbyists, insurance co's?) that these procedures must be the standard of care and the one covered by insurance. They ignore the new evidence and science that has come forth, because money is at stake. In fact, I read recently that that science is about 17 years ahead of the practice of some current treatments.

[disneysteve]

There are some harmful procedures and treatments done by our sick care system. These are have to be part of the problem as well, which the insurance companies have evaluated as risky thus raise the premiums and costs. There are procedures that are just as effective but the makers of the other more harmful treatment have convinced someone (hospitals, doctor's, lobbyists, insurance co's?) that these procedures must be the standard of care and the one covered by insurance. They ignore the new evidence and science that has come forth, because money is at stake. In fact, I read recently that that science is about 17 years ahead of the practice of some current treatments.

There is a lot of "that's the way we've always done it" in medicine. Evidence-based medicine (EBM) is a growing area of study, however. A lot of time-honored treatments are turning out to be not nearly as effective as we all thought once they are subjected to rigorous testing. I serve on an EBM committee and as someone who has been a practicing physician for almost 27 years, I have to admit I've been quite surprised by some of our committee's findings. I have definitely changed some of my practices as a result of our work.

The really hard part is getting the message out to the thousands of doctors, nurse practitioners, and physician assistants and getting them to change their treatment routines. It takes years to modify those long-standing behaviors. And I'm not a conspiracy theorist. I don't think it's all about money or lobbying or marketing. It's primarily just "that's the way we've always done it", plain and simple.

[TexasHusker]

Why not? Most hospitals will discount fees for cash payment.

They offered me an $1100 special cash deal on a 24 hour holter monitor. A doctors office charged me $140 including the reading fee.

Gave then another chance for a sleep study. $2200 cash. I secured one from an independent provider called sleep2go for $150.

Third time a charm? I got quoted a cash price of $1800 for a brain MRA, plus radiologist fee. Found a non-hospital affiliated provider who did it for $500 cash for everything

Hospitals are wealth destroyers for self pay patients.

[~bs]

the joys of being self employed!

[disneysteve]

They offered me an $1100 special cash deal on a 24 hour holter monitor. A doctors office charged me $140 including the reading fee.

Gave then another chance for a sleep study. $2200 cash. I secured one from an independent provider called sleep2go for $150.

Third time a charm? I got quoted a cash price of $1800 for a brain MRA, plus radiologist fee. Found a non-hospital affiliated provider who did it for $500 cash for everything

Hospitals are wealth destroyers for self pay patients.

I don't disagree, but I wonder how much of that do you think is reasonably attributable to vastly higher overhead for a hospital vs. an outpatient provider? A typical hospital might employ a few hundred people, everything from doctors and nurses to dietary and housekeeping. On the other hand, an outpatient sleep center might employ a dozen people and operate out of a relatively small office in a business park somewhere. They don't need to cover the costs of running a large hospital. They just need to recoup the cost of their equipment, pay their staff, pay the rent, and make a reasonable profit. Heck, when I was in practice, we were frequently approached by companies wanting us to offer various services, including sleep studies, in our practice. The upfront cost was small. The overhead was minimal. The profit was good. And I'm sure the cost to the patient would have been reasonable. But again, we had a staff of 4, not 400.

[TexasHusker]

When I worked for a hospital system, I clearly remember in 1994 that we all got bonuses because our hospital made $5 million in profit.

In 2013, the year after I left, numerous folks were laid off because the hospital missed its target of $75 million in profit.

I am certain today that they clear well above $100 million a year in profit. Easily the most profit of any business in my city.

[disneysteve]

When I worked for a hospital system, I clearly remember in 1994 that we all got bonuses because our hospital made $5 million in profit.

In 2013, the year after I left, numerous folks were laid off because the hospital missed its target of $75 million in profit.

I am certain today that they clear well above $100 million a year in profit. Easily the most profit of any business in my city.

Impressive - and disturbing - numbers for sure. I wonder how much of that profit goes in the pockets of executives and how much gets reinvested in the system. I know our hospital system has spent a ton of money in recent years to buy out another system, buy up private practices, open more urgent cares and outpatient facilities, and upgrade existing ones. Heck, I'd just like to have the money they've spent on new signage throughout the area. So not all the profit is bad, but I'm sure a ton of it went to individuals.

[TexasHusker]

Impressive - and disturbing - numbers for sure. I wonder how much of that profit goes in the pockets of executives and how much gets reinvested in the system. I know our hospital system has spent a ton of money in recent years to buy out another system, buy up private practices, open more urgent cares and outpatient facilities, and upgrade existing ones. Heck, I'd just like to have the money they've spent on new signage throughout the area. So not all the profit is bad, but I'm sure a ton of it went to individuals.

Our hospital is now owned by a hedge fund if that helps any.

[disneysteve]

Our hospital is now owned by a hedge fund if that helps any.

Lovely. I love when healthcare entities aren't even owned by healthcare folks anymore.

My first practice, which I left in 2000, was owned privately by the doctor I worked for. When he retired, he sold the practice to some MBA whose wife was an NP so she worked there along with another hired doc. I don't think that practice lasted more than 4 or 5 years. It then changed hands again back to physician-ownership and is still going strong today as far as I know.

[TexasHusker]

The reason your hospital is buying practices and opening new outpatient centers is to control all referrals and route patients into their cash machine. The reason that they bought out a competitor was true - they did it to “eliminate duplication of services”, the old bait that the FTC has been taking for decades now. By doing so, they eliminated a direct competitor. By doing that, plus scooping up referral sources and opening more, they foreclosed the market where you live, and their prices shot out of sight.

Do me a favor, go to AHD.COM and tell what your hospital’s average charges per discharge are. I’m guessing $55-65K with a length of stay a little below 4. That’s about 7 times their cost.