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Old 03-08-2013, 09:44 AM   #221
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This article points to the rise of the megacorp hospital monopoly as part of the problem.

Expert: Hospitals’ ‘Humongous Monopoly’ Drives Prices High – Capsules - The KHN Blog

It makes some sense. I remember years ago we had a system of county hospitals that received public support. Anyone could get service there. The hospital megacorps managed to get in and take over.
As a society, we have enacted legislation that shifts the lions share of risk to employers and healthcare providers. Whenever an individual or collection of individuals transfer risk, there is a premium associated with that transfer. Additionally, we lose price controls via consumerism. We shrug our shoulders about the massive costs of charity care, letting the healthcare providers and hospitals deal with it. Well, it's no wonder the " premiums" we pay for transferring risk are getting out of hand. We applaud laws that require employers and insurers to provide routine care like birth control, because we would rather have those costs removed from our paychecks rather than write a check for it ourselves. Personally, I don't have the need for birth control and I'd rather not pay for others. But I got outvoted.
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Old 03-08-2013, 10:02 AM   #222
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What risk has been transferred to employers, and based on what legislation? The only thing some do is offer healthcare insurance coverage, and this is entirely voluntary.
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Old 03-08-2013, 10:48 AM   #223
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We see the discrepancy in charges first hand with our daughter (17 months) who has spent a good deal of her first year in and out of Children's National Hospital in Washington DC for a complex heart defect. She's getting amazing care and the doctors there are unbelievable. She wouldn't be alive today without them.

Over the year (2012) we learned a lot about how the medical charges happen. We have an HMO, a really good one! Thank goodness! Our total bill for the year outside of my portion I pay through work was the $3,500 in-network out of pocket max. Out of network we got hit with about $5,000, for things she really needed but weren't covered (we usually paid 20-50% of those costs).

What was interesting was looking at what was considered in and out of network. Our insurance deals with all of this, but we get to see the paper trail. Whenever something is in network, the insurance is charged up to the max of whatever it will pay. If a night in the ICU is capped at $4,000... that is what the hospital charges. Whenever anything enters the realm of out of network, suddenly it costs 80-95% less than what it would if it were in network (a night in the ICU for something that wasn't covered in network suddenly only costs us $500). That is because we, the patient, are responsible for a large portion of it. It became clear to me that whenever the patient is left out of the equation... the charges became astronomical. We all pay for it through our rates (those are skyrocketing)... but when we were on the hook for 20-50% of it, the cost dropped significantly.

Makes sense to do it that way when you are the hospital. Maximize your revenue. Not an attempt to demonize them, because with Children's Hospital in particular they end up doing A LOT of care for uninsured who have no ability to pay. Many of the Children's Hospitals struggle to stay a float financially from what I've heard - because of their no turning anyone away policy.

In 2012 our insurance was charged $1,872,000 for her medical care. That included 7 operations and about 4 months in the ICU. BTW, she is thriving, doing great and at home now. Just got the hang of standing, should be walking soon. She'll need one more major operation around the end of 2014, and from that point on her medical care will be pretty comparable to any other child her age (at least that is the hope/projection)
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Old 03-08-2013, 10:59 AM   #224
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Wow, great story! Delighted to hear your little girl is doing so well. I hope she will have a long and healthy life.
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Old 03-08-2013, 07:16 PM   #225
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What risk has been transferred to employers, and based on what legislation? The only thing some do is offer healthcare insurance coverage, and this is entirely voluntary.
Employers pay the majority of the insurance premium for the employee. It would be wiser to attract employees with higher wages and let them purchase health insurance on their own. Like they do for life, auto, etc. In 1986, congress passed legislation that requires hospitals to provide care regardless of ability to pay. The ACA requires coverage of basic routine care and removes the ceiling for coverage. These are risk transfers.
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Old 03-08-2013, 07:35 PM   #226
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What was interesting was looking at what was considered in and out of network. Our insurance deals with all of this, but we get to see the paper trail. Whenever something is in network, the insurance is charged up to the max of whatever it will pay. If a night in the ICU is capped at $4,000... that is what the hospital charges. Whenever anything enters the realm of out of network, suddenly it costs 80-95% less than what it would if it were in network (a night in the ICU for something that wasn't covered in network suddenly only costs us $500). That is because we, the patient, are responsible for a large portion of it. It became clear to me that whenever the patient is left out of the equation... the charges became astronomical. We all pay for it through our rates (those are skyrocketing)... but when we were on the hook for 20-50% of it, the cost dropped significantly.
I'm glad your daughter is doing well.

As for how out of network charges are handled I actually think your experience is non-typical. How I've seen it on my bills (and on that of others):


We use a PPO so the insurer reimburses at a higher rate (80%) for in-network and a lower rate (60%) for out of network. That doesn't sound like much of a difference but in reality if you got out of network (or have to) it is a huge, huge difference. The reason is that the insurer pays what for in network the contracted rate and the provider (physician, hospital, whatever) can't charge you the patient for the difference. Out of network they can charge. The EOBs I've always seen usually show a huge charge by the provider which the insurer writes down to the contracted rate. So--- going to pull one at random --- the facility where I had a colonscopy charged my insurer (in network) $2200. The Aetna member rate was $725. Paid in network 80% would be $580 (actually Aetna paid it all as this was at the end of the year and we had paid our out of pocket max that year). I would have no responsibility for the difference between $2200 and $725.

On the other hand, had the facility been out of network my experience is that they would charge the same amount. Aetna write down the $2200 to what it thinks is reasonable which would probably be about $725 and would pay 60% of that which is $435 and I would be responsible for the difference between $2200 and $435.


For example, my children see a physician who is out of network and I just got an EOB for it. The bill to us was $160. The insurer wrote this down to $90 which in its dreams they consider to be the prevailing charge level. The insurer then paid 60% of that or $54. However, the physician doesn't think $90 is reasonable at all and so doesn't accept the insurer's write down so we are out of pocket $106.

TLR - While I believe what your procedure was my understanding and general knowledge (see that article in Time by Brill) is that out of network providers usually charge the same amount of as in network providers and for most people the out of network providers bill you to pay whatever insurance doesn't pay. (Sometimes you can negotiate it down but not always)
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Old 03-08-2013, 08:29 PM   #227
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Originally Posted by Gatordoc50 View Post
Employers pay the majority of the insurance premium for the employee. It would be wiser to attract employees with higher wages and let them purchase health insurance on their own. Like they do for life, auto, etc. In 1986, congress passed legislation that requires hospitals to provide care regardless of ability to pay. The ACA requires coverage of basic routine care and removes the ceiling for coverage. These are risk transfers.
Perhaps we each understand risk differently. Some employers pay premiums, others don't, but there is no transfer of risk either way. The ACA establishes minimum coverage but allows insurance companies to charge for that. That's how insurance works.

Requiring hospitals to provide emergency care without regard to ability to pay is a good example. Hopefully, as more people get health care coverage, this will decline.
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Old 03-09-2013, 05:30 AM   #228
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In 1986, congress passed legislation that requires hospitals to provide care regardless of ability to pay.
This is a bit misleading. EMTALA requires hospitals to stabilize patients in critical condition. They're not required to provide care beyond that which is necessary to allow them to discharge the patient.
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Old 03-09-2013, 10:17 AM   #229
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A huge piece of this very complex puzzle is end-of-life care:

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One out of every four Medicare dollars, more than $125 billion, is spent on services for the 5% of beneficiaries in their last year of life. Yet even with Medicare or private insurance, you're likely to face a big bill: A recent Mount Sinai School of Medicine study found that out-of-pocket expenses for Medicare recipients during the five years before their death averaged about $39,000 for individuals, $51,000 for couples, and up to $66,000 for people with long-term illnesses like Alzheimer's.
Cutting the high cost of end-of-life care - Dec. 12, 2012

I've said it before, but I'll say it again: just because we CAN keep people alive by "every means necessary" doesn't mean we SHOULD. Am I in favor of death panels? No, but common sense needs to prevail here.
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Old 03-09-2013, 10:37 AM   #230
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I've said it before, but I'll say it again: just because we CAN keep people alive by "every means necessary" doesn't mean we SHOULD. Am I in favor of death panels? No, but common sense needs to prevail here.
Seems the answer lies primarily with all of us making provisions to forego excessive end of life care for ourselves - not with family, physicians or policy to grapple with once it's beyond the patient. I realize that there's only so much each of us can do, but I wonder if those decisions are left to others too often. I wonder how the 30 some developed countries with some form of universal HC control end of life HC costs?
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Old 03-09-2013, 06:03 PM   #231
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One out of every four Medicare dollars, more than $125 billion, is spent on services for the 5% of beneficiaries in their last year of life.
An oft-repeated simple fact that appears to lead to simplistic suggestions. Sure, in retrospect it turned out to be the last year of their life, but many/most didn't know that at the time. To belabor the obvious--everybody that dies is doing it for the first time. We may not know or be able to imagine what that last year will be like: In pain and hooked up to tubes, or going to the grandkids birthday parties and enjoying great moments with our spouse? And our kids, mates, and friends want us to live, we'd probably like to go on living ourselves. Plus, people sometimes do beat the odds and recover from some very grim diagnoses. I can't make a good case for spending a million taxpayer dollars on cancer treatment for an 80 year old who also has heart disease and kidney failure, but I think I know why they don't throw in the towel on their own.
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Old 03-09-2013, 06:34 PM   #232
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A huge piece of this very complex puzzle is end-of-life care:



Cutting the high cost of end-of-life care - Dec. 12, 2012

I've said it before, but I'll say it again: just because we CAN keep people alive by "every means necessary" doesn't mean we SHOULD. Am I in favor of death panels? No, but common sense needs to prevail here.
We watched this happen with my MIL. I don't think there was a test known to man they didn't decide they needed to run on her in the last 6 weeks of her life. She was 94. The amount of money and resources wasted was terrible. It's like a freight train that you can't stop.
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Old 03-09-2013, 06:42 PM   #233
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We watched this happen with my MIL. I don't think there was a test known to man they didn't decide they needed to run on her in the last 6 weeks of her life. She was 94. The amount of money and resources wasted was terrible. It's like a freight train that you can't stop.
This is my fear. If I ever get to be 94, when I get a serious illness, just shoot me. Please.
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Old 03-09-2013, 07:10 PM   #234
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Perhaps we each understand risk differently. Some employers pay premiums, others don't, but there is no transfer of risk either way. The ACA establishes minimum coverage but allows insurance companies to charge for that. That's how insurance works.

Requiring hospitals to provide emergency care without regard to ability to pay is a good example. Hopefully, as more people get health care coverage, this will decline.
Most larger employeers use the insurance company only as a paying agent, they pay the insurance company for all bills directly. (that is there is no insurance involved from the companies point of view, the companies figure its cheaper to self insure with a large employe pool, just like they self insure for a good bit of auto insurance) so the insurance company just recieves a fee for processing the claims from these companies.
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Old 03-09-2013, 07:14 PM   #235
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This is my fear. If I ever get to be 94, when I get a serious illness, just shoot me. Please.
The concept of paying physicians to have a discussion when one is health on what to do in these cases, was demagoged by the right as death panels. One should have a discussion with any children on what you want and put it in a medical power of attorney and advanced directive. Make sure that those who are the power of attorney know your wishes. I believe hospitals do now ask about DNRs during the admission process. If need be know a lawyer and be sure the person holding the power of attorney knows who it is, so that if need be the lawyer can write letters. (They tend to get more attention).
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Old 03-09-2013, 07:30 PM   #236
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This is my fear. If I ever get to be 94, when I get a serious illness, just shoot me. Please.
You are a doctor, am I correct? I have heard that sort of sentiment from other doctors who are in the front line, struggling with the human and ethical dilemma of some aspect of end of life care, and recognize the futility of some of the efforts, that ended up prolonging the dying process and not doing the patients and their families any favor.
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Old 03-09-2013, 07:55 PM   #237
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This is my fear. If I ever get to be 94, when I get a serious illness, just shoot me. Please.
Not a lot of invasive things done but still a ton of money spent by the government and her insurance plan. I'm sure they saw dollar signs when they saw her coming. Her doctor was an idiot (excuse my French) so there was really no one to talk to with respect to the big picture and what should or shouldn't be happening. Her PCP's contention was that she had contracted Alzheimer's at this advanced age and all her problems could be attributed to that. End stage Alzheimer's in a couple of months? He wouldn't coordinate any of her care. Idiot.
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Old 03-09-2013, 08:19 PM   #238
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You are a doctor, am I correct?
Yes.
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Old 03-09-2013, 10:12 PM   #239
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An oft-repeated simple fact that appears to lead to simplistic suggestions. Sure, in retrospect it turned out to be the last year of their life, but many/most didn't know that at the time. To belabor the obvious--everybody that dies is doing it for the first time. We may not know or be able to imagine what that last year will be like: In pain and hooked up to tubes, or going to the grandkids birthday parties and enjoying great moments with our spouse? And our kids, mates, and friends want us to live, we'd probably like to go on living ourselves. Plus, people sometimes do beat the odds and recover from some very grim diagnoses. I can't make a good case for spending a million taxpayer dollars on cancer treatment for an 80 year old who also has heart disease and kidney failure, but I think I know why they don't throw in the towel on their own.
Another way to look at the statistics:

$1 out of every $4 for Medicare is spent in the last year of life....but we're only talking about people on Medicare, which is age 65 to (on average) 83, or 18 years on Medicare.

So if 25% is spent in the last year of life, that leaves 75% spent in years 1-17, or an average of 4.4%/year.

That makes the last year about 5.5x as expensive medical care-wise as the 17 living years.

While 5.5x is obviously a big increase, looking at it from an average cost perspective, and seeing the big picture, I'm not so amazed at that factor. For instance, many people end up in a hospital in their final year of life (many end up dying in the hospital). Just one hospital stay for ANYTHING can easily run several thousand dollars...and that one hospital stay alone can be 5.5x as much as the senior normally spent on medical care while they were alive.

I agree that true healthcare is not "keeping someone alive at any and all costs"....but IMO, spending 5.5x as much for healthcare in the final year of life compared to the annual expenditures in the healthy/living years isn't a crazy high multiplier. Sure, there can be realistic improvements and not order stupidly wasteful tests/procedures, but I doubt you can whittle that 5.5x factor down to 2x or 1.5x
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Old 03-10-2013, 07:18 AM   #240
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When we look at these numbers, how much is spent on someone in their last year of life, what is not shown is how much of that is spent before it is obvious that the person will not survive. Just because someone is 90 does not mean they can't, or won't, live to 100.

Two close relatives I saw who ended their days in hospitals after major and costly efforts to treat them, most of the effort and cost was incurred when they still had a reasonable chance to survive.
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