Hospitals and their outrageous costs!!!

[MsRobyn]

@Sal Ammoniac

It’s hard to know if the uninsured are a symptom of the problem, or the problem itself. I do think it’s the case that you could solve the problem of the uninsured (say by a new government program), but still leave unaddressed many of the inefficiencies of the current system. The fact is that healthcare is way, way behind the curve on using information technology to streamline its processes. It’s a bit of a Catch-22: healthcare is insanely complex because of the multiplicity of payors and plans and interests, but because it’s so complex, it’s generally too expensive to come up with a comprehensive IT solution that would fix the problems.

There are many ways to make patient care more efficient and some of these solutions are being implemented in some facilities. For example, a computer-based records system keeps the need for repeated tests to a minimum because all the results are in one place; there’s no paper report sitting in someone’s inbox waiting to be filed. Another advantage to that is that satellite offices can use the same information without a delay in getting a paper chart from somewhere.

But some of these reforms are going to be slow in coming for any number of reasons. First, I’ve read some rather cogent arguments against a national repository of medical records because of privacy and security issues. Second, there are constituencies involved that want to protect jobs, even if those jobs are obsolete.

Basically, the reasons people are slow to adopt technology solutions to health care problems are the same reasons people are slow to adopt technology to any problem.

Robin

[sinjin]

I know that WhyNot and other people have asked basically the same question, but I am interested and it can’t hurt to ask it again, right?

Maureen, you asked whether iluvurmom actually read lorinada’s post and seem to be on the same side of the debate. I have read it. It seems to say that some people pay more than others. I have quoted her post below and emphasised some things which don’t make sense to me. Perhaps you or lorinada can explain. All emphasis in the following quotations is my own.

@lorinada

Everyone gets charged the same amount, as has been noted in previous posts.

Some insurers sign contracts with hospitals and other medical providers. These contracts compel the providers to accept a payment that is less than the billed amount. But the billed amount is exactly the same for EVERY patient.

These two statements seem to contradict each other. If I hand you an invoice for $10 and say “give me $5 and we’re even”, I have not charged you $10. I have charged you $5, regardless of what the invoice says. It seems to me that this is the problem. Some people are saying “people are charged more if they don’t have insurance” and others (Maureen and lorinada?) are saying “everyone is charged the same.” Is the argument that everyone is charged the same that everyone recieves invoices which say $10, regardless of whether they need to be paid? If so, it seems disingenuous to me.

@lorinada

But, also, despite that fact that almost no private parties can guarantee their providers that they can fill up their beds and waiting rooms, that they can pay their bills in full within weeks, and that any disputes will be given top priority, ANY private payer CAN negotiate a discount on their bills - as has been mentioned upthread.

Are you just supposed to say “Er… excuse me Mr Hospital man, you want me to pay you $76 for this Tylenol. I suggest I pay you $0. Your move!” and then slam your hand down on the little chess clock you brought along as a prop?

@lorinada

I am a harsh critic of the current third-party payer system, but that doesn’t alter that fact that I am getting really sick of the “they’re charging us MORE!” hullabaloo.

lorinada, how do you respond to WhyNot’s anecdote about the $76 drugs? Because he had insurance, he paid nothing for the drugs, even though he was billed $76 for them. I think this is exactly what people are talking about when they say “they’re charging us more”, with or without the capital letters and exclamation points.

sinjin

[Syntropy]

@sinjin

I know that WhyNot and other people have asked basically the same question, but I am interested and it can’t hurt to ask it again, right?

Maureen, you asked whether iluvurmom actually read lorinada’s post and seem to be on the same side of the debate. I have read it. It seems to say that some people pay more than others. I have quoted her post below and emphasised some things which don’t make sense to me. Perhaps you or lorinada can explain. All emphasis in the following quotations is my own.

I’ll try. It’s been a long time since I dealt with this area, so lorinada, please feel free to correct any part of the following.

@lorinada

Everyone gets charged the same amount, as has been noted in previous posts.

Some insurers sign contracts with hospitals and other medical providers. These contracts compel the providers to accept a payment that is less than the billed amount. But the billed amount is exactly the same for EVERY patient.

These two statements seem to contradict each other. If I hand you an invoice for $10 and say “give me $5 and we’re even”, I have not charged you $10. I have charged you $5, regardless of what the invoice says. It seems to me that this is the problem. Some people are saying “people are charged more if they don’t have insurance” and others (Maureen and lorinada?) are saying “everyone is charged the same.” Is the argument that everyone is charged the same that everyone recieves invoices which say $10, regardless of whether they need to be paid? If so, it seems disingenuous to me.

All providers are required to bill insurance companies and patients the same amount for the same procedures. If you have insurance and see a doctor for a consult, that doctor charges your insurance, let’s say $245. If you are uninsured, the doctor charges you $245. Here’s where it gets fun.
Let us say your doctor is contracted with your insurance company. Your insurance company has agreed that the contracted rate for a consult is $96.50. Your plan pays 85%. So they send the doctor a check for $82.03, and $14.47 is your responsibility. The doctor then writes off the remaining $148.50. Now. Here’s the important bit. Until the doctor receives the check or denial from the insurance company, he does not adjust his billing. He charges exactly the same amount for the same procedure code because he is required to do so by law.
If you have an insurer that is not contracted, but they only pay $96.50, the doctor is then free to charge you the remaining $148.50, because he hasn’t agreed to accept the insurance assignment.
Of course, when entering into an agreement with an insurance company, the doctor is expecting a larger patient base, because people want to go to contracted doctors, which will save those patients money.
That is why most providers (doctors, hospitals, physical therapists, etc.) are willing to take a courtesy adjustment on services if you ask. They want your business. If you have no insurance, you’re still going to need a doctor from time to time, and it’s pretty much a guarantee that if you send someone to collections, they won’t be coming back to you.
Did that make sense? I feel like I didn’t explain it as well as I could have, so if you still have questions, fire away.

[DSeid]

@MsRobyn

Basically, the reasons people are slow to adopt technology solutions to health care problems are the same reasons people are slow to adopt technology to any problem.

Robin

I know that this is a hijack, but that is an incorrect assumption. Technology does not necessarily do the job more efficiently than paper. Electronic medical records (EMR) is just getting to the point where it does not slow us down and hinder us more than it helps. Much of the time we were asked to adapt our practices to the technology, rather than the other way around. Many of us are otherwise technophilic and early adopters of technology. Nevertheless we like the right tool for the job. Slow me down, make it harder for me to review relevant past notes, leave me high and dry when the system crashes, and I am not a happy doctor.

We are going EMR (and investing handily in dollars and resources to do so) but have waited til now for very good reasons. And I am not 100% sure that the technology is mature enough even now.

[drachillix]

@WhyNot

3. All of those drugs are donated free to the hospital by the manufacturers. Ditto infant formula, Soothers pacifiers and Pampers diapers. The only logical percentage of $0 is $0.

Um hospitals pay billions of dollars a year for drugs, you need to go looking a little further.

At least where my wife works as a post partum RN, diapers, and basic baby needs while you are in the hospital ARE part of the room rate. In this case they also have “take home packs” of diapers and formula that are donated by various diaper and formula manufacturers, but they don’t charge for those.

[WhyNot]

@drachillix

Um hospitals pay billions of dollars a year for drugs, you need to go looking a little further.

At least where my wife works as a post partum RN, diapers, and basic baby needs while you are in the hospital ARE part of the room rate. In this case they also have “take home packs” of diapers and formula that are donated by various diaper and formula manufacturers, but they don’t charge for those.

You are correct. You are also not saying a thing I didn’t, nor did I leave anything out.

Let’s review: The three drugs I was initially, but not inevitably, charged for were donated to the hosiptal for free.* The markup was not a percentage of the purchase price, as any percentage of zero is, in fact, zero. The drugs were not part of a per diem rate, they appeared on the first bill as a separate charge. Diapers, formula and other baby supplies which are also donated for free are CHARGED FOR as part of the per diem rate. Take home sample packs filled with diapers, wipes, formula and baby care books are given away for free. (A whole 'nother rant on free hospital advertising and the undermining of breastfeeding lies that way, but I’ll leave that for another thread.) I’m not arguing with you there.

I’m not saying every medication in the hospital is donated. I, in fact, defended the cost of expensive medical equipment, and believe the hospital should be making a reasonable profit. But I don’t think the current system is ethical - different people pay different rates for the same care, and the hospital accepts that and charges outrageous markups on some items, including items they pay nothing for. That’s the limit of my beef.

*How do I know this? Because I have family members working in the OTC industry who are in charge of donating millions of units to hospitals yearly. Their company can then claim in their advertising that “No brand of XYZ is used more by hospitals.” and hope that consumers will therefore buy their brand later on.

[Kalhoun]

Okay…just an anecdotal experience, but it made me smile.

Mr. K and I went to the foot doctor yesterday. Unrelated issues and he had an appointment but I didn’t.

When he was done with the doctor, I told the doctor I had a question about my foot and I wasn’t trying to get “somethin’ for nothin’” and I’d be happy to fill out the forms so he could bill the insurance company (we were the last appt. of the day). He’s like, “No problem…just don’t tell my receptionist (??what’s that all about? He’s the boss!)”. I insisted we do the forms, but he just wouldn’t hear of it. So he diagnosed my problem, did a little physical work on my foot, gave free drugs and a prescription to Mr. K, and wrote me a prescription. How cool is that??

The prescriptions were $500+, but that’s another rant. We have good insurance, so it only cost us $80.

[sinjin]

[QUOTE=Maureen]
I’ll try. It’s been a long time since I dealt with this area, so lorinada, please feel free to correct any part of the following.

[QUOTE]

Thanks for all your effort in explaining this to me.

[QUOTE]

All providers are required to bill insurance companies and patients the same amount for the same procedures. If you have insurance and see a doctor for a consult, that doctor charges your insurance, let’s say $245. If you are uninsured, the doctor charges you $245. Here’s where it gets fun.
[\QUOTE]

See, this is where I would say it gets turned into legal fiction. The doctor bills the insured or the uninsured patient the same amount, but doesn’t charge them the same amount.

In your example, the bill is for $245 for both the insured and uninsured patient. However, the doctor only actually charges the insured patient $96.50. It seems like the whole back-and-forth between the doctor and the insurance company is a little dance that they do so they can say “See? I sent out a bill for $245, just like this uninsured schmuck over there.” I can’t see why it should make any difference in what order the charges are assessed in this process.
I don’t think that I am actually understanding your point. Here is an example which seems to me to be equivalent:

John owns a restaraunt. It’s a bit of a tourist trap but it has good burgers. John’s burgers list for $10. When you order a burger, the check reads $10. Here’s where it gets fun, ( ) John knows that $10 is steep for a burger, so he has a deal with the locals. If you’re a local you only pay $4. Just give the waitress $4 and let her know that you live down the street. After he finds out you’re local, John nods and writes off the remaining $6. After all, if there are lots of locals in the restaraunt, then there will always be people buying burgers and he’s assured a steady stream of business.

Does John charge Lori the Local and Timmy the Tourist the same amount? In some sense he does because they both get a bill which says “pay me $10.” However, in what seems to me to be a more real sense Lori only pays 40%.

If this really is what you contend is happening in the insurance world, then I’m sorry but I’m afraid I will have to disagree with you that the uninsured aren’t charged more.

Did that make sense? I feel like I didn’t explain it as well as I could have, so if you still have questions, fire away.

Again, thanks for the explanations, I do appreciate them even if it looks like they’re not making it through my thick skull.

sinjin

[drachillix]

If this really is what you contend is happening in the insurance world, then I’m sorry but I’m afraid I will have to disagree with you that the uninsured aren’t charged more.

To run with the burger anology a bit…if all Blue cross members are given coupons for $4 off a burger at Johns burger stant and end up paying $6 they were charged $10 for a burger, they just had $4 in alternative payment.

[Sal_Ammoniac]

@DSeid

I know that this is a hijack, but that is an incorrect assumption. Technology does not necessarily do the job more efficiently than paper. Electronic medical records (EMR) is just getting to the point where it does not slow us down and hinder us more than it helps. Much of the time we were asked to adapt our practices to the technology, rather than the other way around. Many of us are otherwise technophilic and early adopters of technology. Nevertheless we like the right tool for the job. Slow me down, make it harder for me to review relevant past notes, leave me high and dry when the system crashes, and I am not a happy doctor.

We are going EMR (and investing handily in dollars and resources to do so) but have waited til now for very good reasons. And I am not 100% sure that the technology is mature enough even now.

These are valid points, but my perspective is that the robustness of EMR is something that should not be in question in 2006. Instead, it should have been achieved years ago, to judge by what other large, data-intensive industries (the financial sector, for example) were able to accomplish. And, of course, EMRs are just one piece of the efficiency puzzle.

If you ask me, the health care industry needs to be redesigned from top to bottom. But that’s a debate for another day.

[drachillix]

@WhyNot

You are correct. You are also not saying a thing I didn’t, nor did I leave anything out.

Let’s review: The three drugs I was initially, but not inevitably, charged for were donated to the hosiptal for free.* The markup was not a percentage of the purchase price, as any percentage of zero is, in fact, zero. The drugs were not part of a per diem rate, they appeared on the first bill as a separate charge.

Unfortunately the price paid by the hospital for the drug in question is only a small portion of the costs incurred in storing, inventorying, distributing, prescribing, and dispensing. Even if the drugs were purchased rather than donated, the rest of those costs still exist. Just because the manufacturer wants to have a marketing blitz does not obligate the hospital to provide all of the value added services they provide for free.

[iluvurmom]

Maureen and Sinjin, thank you for clearing everything up for me. My skull is a little thick as well. I was watching 60 minutes last night and it made me think about our little debate we are having. Thought this would be good reading material and more information about hospitals and their prices. Enjoy!!

http://www.cbsnews.com/stories/2006/03/02/60minutes/main1362808.shtml

[sinjin]

@drachillix

To run with the burger anology a bit…if all Blue cross members are given coupons for $4 off a burger at Johns burger stant and end up paying $6 they were charged $10 for a burger, they just had $4 in alternative payment.

But if we want to push the analagy even further, the Blue Cross members get a coupon for $4 off a burger at John’s burger, and then John says “Look, just give me the coupon and we’ll call it even.”