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Costs of some of my procedures this year

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Posted 11/3/2009 3:50 AM (GMT 0)
Here is the costs of my chemo treatment on 1-05-09:

$24, 347 total bill
$12, 479 insurance discount
$600 deductible
$9,507 benefit available
$2,971 patient owes

Yes it was a great start to the year! Thank goodness for Health care reimbursement accounts.
Posted 11/3/2009 4:22 AM (GMT 0)
Hi David yes I am well I have been keeping a low profile until I get my first PSA results on Friday I have been following your problems every day all I can say to you is just "hang in there"
Posted 11/3/2009 2:18 PM (GMT 0)
Colin, looking forward to you getting a big fat zero on your test. My ongoing saga still has a ways to go to play out, but knocking it off a day and a problem at a time.

Please post as soon as you get results.

David
Posted 11/4/2009 4:00 AM (GMT 0)
I will argue that insurance has gone way beyond its useful value and is largely at the root of this problem now! The US medical "economy" does not abide by any natural economic rules. There is absolutely no relationship between what something costs, what is charged for it, what is paid for it, and what its real value is. The amounts quoted from the hospital bills above are the charges. No hospital ever gets paid charges, so they inflate these to be deliberatly higher than any insurance company would pay in order to qualify for the highest possible payment any insurance company allows. In fact, many charges are arbitrarily set at 2-3.5x higher than the Medicare "usual and customary rate", as this is easier to figure out than actual costs. All that line itemization on the bill is bogus for 95% of inpatient care anyway, since the insurance companies largely pay according to a negotiated DRG (diagnosis related group) that applies to the major diagnosis. For instance, if you are admited for a radical prostatectomy, DRG code 480 (or whatever), the insurance compay pays a fixed amount for ALL care you receive during that admission, whether you are there for 1 day or 10. This is motivation for hospitals to cut out unnecessary care (not to work-up that heart murmur that was discovered until after discharge, for example) and use the least expensive but effective medication for control of your pain. DRG payments are negotiated on a very large scale, and have practically nothing to do with what any one hospitals expenses are for any one patient. In some markets, supply and demand can have an effect at this level - if you live in a small town with one hospital, there are fewer choices of where the insurance companies can steer their patients, so the hospitals can negotiate higher payments. But also remember that hospitals are FORBIDDEN from turning away pts who have insuffienct means to pay for their care. So, to simplify, imagine a trip to the grocery store to buy a loaf of bread. One store charges $75 for the loaf and across the street they charge $90. When you get to the checkout line, the charge is immaterial anyway and you are asked to pay what was previously negotiated for bread. But remember, that payment also covers everything else in your shopping cart as well, whether "bread-related" or not. If you have no means to pay, you get it all for free and the grocery store hopes to make up the loss on the next paying customer. When you go home, the bread tastes fine but you have no good objective way to determine the "value" of the bread, because prices are controlled and there is no open market to establish value! Is the solution to this mess very complicated (government takeover) or very simple (markets pricing for bread works fine, why not medical care services) or something in-between?

Anyone outside the gritty underpinnings of the US medical system would be shocked to learn what an economic foundation of quicksand it is built upon.

My $.02, as an insider, anyway.

Doc
Posted 11/4/2009 4:27 AM (GMT 0)
Thank you, Doc,
What a fantastic, and very sage post. The business of medicine has always amazed me. This type of business practice has also worn itself out. Pretty silly stuff, but I understand it better. Thanks!

Tony
Posted 11/4/2009 3:31 PM (GMT 0)
Doc, good view on a complicated system, its makes better sense with your explanation. Better hope the brotherhood of hospitals don't come chasing you down, lol.
Posted 11/5/2009 1:38 PM (GMT 0)
Doc,
I'd say market price for that description was much more than $0.02! I'd go with at least the 3.5x Medicare multiplier. Thanks!

I am generally a capitalist, but am willing to see some of the pitfalls in the system.
Today, I can go to several grocery stores and check prices on bread. I can buy the cheapest and not like the taste, and a week later try a more expensive one and enjoy its flavor. I can go to the store I like and pick a favorite and even read customer reviews about XYZ bakery and get ratings for taste, service, and price. I can do this for autos, or power tools, or books. I will not buy a Ferrari this year because it is too expensive for my budget and I don't need it. I can drive 200 mph on a less expensive motorcycle. The costs and product capabilities provided are clear and market rules dominate.

I only had one rotten walnut to give for my country and it needed to come out. There was no advertised pricing from any of the surgeons I investigated. There was no rating system that I as a consumer could check. I was told the comparision was too complicated with too many factors so a rating system is not possible.
I say give me the data and let me decide if it is too complicated. If Dr A takes only Gleason 6 or lower patients with PSA less than 4, I am capable of understanding that his success rates are artificially high. No such open rating system is available to me as a consumer. I used word of mouth and spoke with OR staff to rule out "the Sanguinator" and pick the nice guy who treats patients with respect. I had no results to compare, no pricing info. What if the three surgeons in my area got together and decided to charge $100k? Would I do it? If I have no choice - yes!
Without those bits and controls, 100% Market pricing can't work either.

I don't have a good solution. No one does, which is why every administration since, who knows when, has said they will fix it. I do see that much time, energy, dollars are spent just working on the insurance reimbursements. I see that the CEO of Excellent Purple Cross is making $3.5M per year. The Advantage Yellow Cross is advertising on my TV every night, and Most Value Provider has given so much to the local sports team they have renamed the stadium MVP.
None of this helps the guy on the table with the rotten walnut.
I lived in Japan for 9 years and was amazed at the care and services provided to everyone.
I saw the Michael Moore (personally I can't stand the guy) movie "Sicko" and came away with a lot of questions. Even though (IMO) he is an obnoxious alarmist, he made some very good points for some form of nationalization.
I would like to see a system that holds people accountable for their own actions. You smoke? You pay 50% more if you get lung cancer. Your BMI is >35? Sorry, Pal, it's going to cost you 50% more to get that surgery done. Drug use? "Sorry, we don't provide all services to patients with serum levels above X. Come back in 30 days."

Just my 2 cents.
Jeff

I just did a quick salary check on the net to verify my numbers. In 2008 the average pay for the top 10 at "Excellent" was more than $1 million. Top dog was paid 2.78M in '08. There were 62 execs with salaries of more than $200,000. I wonder if they got free health care, too.
How much of my health insurance premiums went to pay just their salaries? This is not a large community.
With that kind of pay and benefits they can each have two RPs.

Post Edited (Worried Guy) : 11/5/2009 11:32:30 AM (GMT-7)

Posted 11/5/2009 1:42 PM (GMT 0)
And to Colin45,
As you know, you are already on my list. Based upon your recovery rates, I'm guessing your PSA will come back below 0! (You lucky b*stard) :-)
Jeff
Posted 11/5/2009 2:22 PM (GMT 0)
Jeff
I have said before that I will not even think how lucky I am until after I get the results tomorrow
Posted 11/5/2009 5:27 PM (GMT 0)
i agree with worried guy, lets take politics out of the health care debate and make some improvements. Health insurance should be based on overall fitness and level of expected service. The fact that some unlucky guy who is 20 gets leukemia should not be part of the pricing. We need transparency and fairness in pricing. If you are willing to make a larger copay, discount, if you do not want to choose your own doctor- discount. Its crazy to go into a $20,000 procedure with no idea as to what the cost will be.
Posted 11/6/2009 2:22 AM (GMT 0)
As Jeff & Engineer point out, transparency in pricing and outcomes is fundamental to any meaningful "consumerism" in our medical care delivery system. In the meanwhile, it is fortunately illegal for any of the docs (or insurance exec's) to get together and agree to charge $200K for RP's - just getting together with pricing on the agenda is a violation of federal antitrust rules.

I guess the short answer to David's original question about how much did your treatment cost is... probably nobody knows. We know what was charged, but that is unrelated to cost. Whoever actually paid the bill knows what was paid, but that is unrelated to charge. And only you know the value of the outcome, but likely did not pay the full bill.

Doc
Posted 11/6/2009 2:27 AM (GMT 0)
Doc, from what I can see over the years with my expensive medical maladies, it seems like they come in high, get negotiated down, back and forth a time or two, then all sides settle. My wife's health insurane company is playing a game with my hospital, each side blames the middle man in the deal, but I feel its part of the game being played.

Don't have your inside first hand experience, but I am certain the business side of all this is just as cold and calculating as any other business endeavor
Posted 11/6/2009 8:25 AM (GMT 0)
Any industry that adds service to the cost to the consumer is going to be exaggerated

For example

1) Go to a Liquor store buy a bottle of wine for $7.99, that exact same bottle served to you in a restaurant $49.99

2) Go to an autoparts store, get 5 qts of oil at .99 cents each, go to a car dealer and have an oil change, $39.99

3) Go to a supermarket, get a bottle of soda, cost per 12oz is approx a quarter, get it served to you its $1.75

4) Want a Pizza made for you, guess what, the actual cost of the ingredients to make a large cheese pizza are under $1.00, yet the charge to customers $12.99,

Why, there are a lot of costs associated with service. In a hospital, there are countless malpractice insurance costs that are added to the overhead, employee benefits, add in facility expenses, and its not hard to see why hospital costs are high

These middlemen are simply ins companies, tax agencies, utility companies, etc. Not much way around them as they are also providing a product that needs to be paid for by someone, and that someone is divided by every paying patient (customer)
Posted 11/7/2009 4:19 AM (GMT 0)
MrGimpy -
Agreed that service and product refinement add costs. They do in all industries, and those costs are built into the product price. Commodity cost of coffee is about US$ 0.75/lb. Roast it, grind it, distribute it, brew it and finally serve it at your local Starbucks where you can enjoy it in a comfy chair and todays paper and you are paying something north of $ 54 for that same pound of coffee. My point is that you have a price list at Starbucks and can make informed decisions regarding the value of the house blend at $1.50 or the mocha latte at $3.50. You can compare those costs and "experience" with the quickie brew at 7-11 or MdDonalds. Wherever you decide to get your morning java, you will pay the listed price and have a pretty good idea about the value of your purchase. NONE of these fundamental economic rules apply in US medical care delivery system. The back-and-forth on billing that David refers to is a shell game. The first bill you receive (the one that often says "this is not a bill") is a listing of charges, which mean nothing. Then the insurance companies pay something considerably less and send you an explanation of benefits report. This shows what was actually paid, what you owe as copay, and the rest is the writeoff. The big insurance companies love it when the medical bills are extraordinarily high, because it makes you think that they have saved you a ton of money by buying their insurance. My point is that if we had more transparency in pricing and an expectation of payment, hospitals and docs would not charge such ridiculously high amounts, because they are already operating at the 0-5% margin on what insurance companies are currently paying. Since about 30% of the total healthcare dollar is spent on administration of charges and payments with intermediaries (largely insurance companies) to distribute that 0-5% margin, you have a very big tail wagging a frustrated dog. Think how much lower your healthcare expenses could be in a system where we all had some high deductable insurance for catastrophic coverage, paid our own way for most simple stuff and could compare costs and values between providers. As a demonstration of how far away we are from this pipe-dream, try negotiating a cash payment with your local hospital for a surgery or inpatient stay. Most hospitals hate dealing with insurance, but have built horribly complex systems that depend on it and no longer have adequate financial front-office capacity for dealing with someone who wants to negotiate a realistic cash payment for a common inpatient service.

Doc
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