Why medical bills are killing us.

[Purron]

Time Magazine - Health Care

Very interesting article about healthcare in America in the latest issue of Time magazine. Always follow the money to understand an issue.

Bitter Pill: Why Medical Bills Are Killing Us | TIME.com

 

[Purron]

Part time poster so defer to the ongoing discussion. Mods, feel free to delete or merge into the ongoing thread.

 

[ERhoosier]

Overutilization, or just added cost of entertainment (i.e. inc in higher ticket prices)?

For NFL teams, Combine is all about the medical tests | ProFootballTalk

 

[Gatordoc50]

http://www.huffingtonpost.com/howar...8851.html?utm_hp_ref=fb&src=sp&comm_ref=false

Looks like a trend. Overspending with lackluster results.

 

[Midpack]

Howard Steven Friedman: 5 Countries With the Highest Military Expenditure

Looks like a trend. Overspending with lackluster results.

With one notable difference...

 

[DeborahB]

The sad truth in the USA is that many people are denied health insurance (myself included) even when they can afford to pay for it (unwillingly...). I bought into my state's high-risk pool after BCBS refused to take me - and pay $941 a month for myself. It's bankruptcy insurance for me, and has a known end in sight when on June 1, I get on Medicare. Still, it is appalling. It does get me a good discount on prescriptions, but very little else. What it really does is cover me so that if something catastrophic happens, there is an upper limit to what I have to pay out of pocket - and they pay 100% after that. Three more months and counting down.

I worked in the healthcare industry for the last 12 years of my working life. There is nothing in the Time article that strikes me as inaccurate, or unusual. Not only does Medicare get a huge discount on services it pays for, all insurance companies do. Nearly 20 years ago I had a surgery bill for $21K (from the hospital, not counting doctors' fees). The hospital got about $7K for that bill from my insurer.

The whole system is crazy. My internist thinks it's crazy. All the doctors have to employ people whose entire job is arguing about payments, with insurance companies.

I hope it gets better. At least on Medicare I won't pay as much for the insurance.

 

[Purron]

Always follow the money. From the article:

"According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington."

Yes, it's a big mystery why the conversation in Washington has been steered to who pays the bills instead of why the bills are so high.

 

[gerrym51]

i have been reading this thread with amusement. most people have hospital stays that are paid by insurance.

the hospital bills a gigantic amount. the insurance company says the contracted price is 20 percent of total bill. and that all the hospital gets, and covered person owes no more.


the hospital bills that ridiculous price to make sure they get every cent possible.

 

[meierlde]

i have been reading this thread with amusement. most people have hospital stays that are paid by insurance.

the hospital bills a gigantic amount. the insurance company says the contracted price is 20 percent of total bill. and that all the hospital gets, and covered person owes no more.


the hospital bills that ridiculous price to make sure they get every cent possible.

It was interesting to get the medical bills when my mother was in the hospital (she was 81 at the time) There was a big total of itemized items, then it was zeroed out and a new price inserted because of medicare.
I have often wondered what would happen if you passed a simple law, medicare's charge level is now the price all pay. How many of what would cease. Physicians would have to sort of take it or find another profession for example.

 

[bondi688]

Is it true that MedicAid and MediCare low ball the the hospital and doctors' fees, and the hospitals are losing money on those patients? And that is why some doctors refused to take or limit the number of MedicAid and MediCare patients. If that is the case, that fee schedule used as the standard will bankrupt the medical care system, or drastically reduce the income of the medical personnel resulting in more people leaving the profession.

 

[ERhoosier]

I have often wondered what would happen if you passed a simple law, medicare's charge level is now the price all pay. How many of what would cease. Physicians would have to sort of take it or find another profession for example.

Best evidence is the system would collapse. Most providers can care for large #s of Medicare patients only because other privately insured patients pay more for care (i.e. cost shifting). Medicare often pays LESS than the actual cost of delivery of specific health care service (especially after billing overhead). In many areas it is becoming increasingly difficult to find docs accepting new Medicare patients, and Gov't threats to cut reimbursement further will only make things worse.
Tips on Finding a Medicare Doctor - Medicare.com
Doctors limit new Medicare patients - USATODAY.com

And there is already a big (& worsening) shortage of primary care docs-
Study Foresees Shortage of Primary-Care Doctors - US News and World Report

 

[Gatordoc50]

It was interesting to get the medical bills when my mother was in the hospital (she was 81 at the time) There was a big total of itemized items, then it was zeroed out and a new price inserted because of medicare.
I have often wondered what would happen if you passed a simple law, medicare's charge level is now the price all pay. How many of what would cease. Physicians would have to sort of take it or find another profession for example.

They wouldn't have to necessarily find a totally different profession. They could become physician assistants, nurse anesthetists, RNs, etc. Or they could use their undergrad degrees in accounting, chemistry, engineering, biology, finance, etc. I wouldn't worry about the physicians. That's sort of like dumping a swimsuit model and worrying that she might not get another date.

 

[Katsmeow]

Best evidence is the system would collapse. Most providers can care for large #s of Medicare patients only because other privately insured patients pay more for care (i.e. cost shifting). Medicare often pays LESS than the actual cost of delivery of specific health care service (especially after billing overhead).

What real evidence is there that Medicare pays less than the cost of care. From what I have read (including the recent article in Time) I am skeptical that Medicare pays less than cost of providing. I am quite sure that some physicians don't feel Medicare pays enough and as a result those physicians choose not to accept Medicare (which is their right). That is not the same thing as saying they are receiving less than cost.

I'm sure that physicians and other providers would like to be paid more than Medicare pays but that doesn't mean to receiving less that the preferred amount means that provider is losing money.

 

[eridanus]

'
3. Liability- Medical malpractice & defensive medicine account for MUCH more costs than many want to admit. IMHO specialized medical/health care courts (like tax court, family court, etc.) would be a good start.

Tort reform is a "red herring." It's miniscule ($30B out of $1T). Defensive medicine is harder to calculate.

Would Tort Reform Lower Costs? - NYTimes.com

http://www.jhsph.edu/news/news-releases/2005/anderson-health-spending.html

There are plenty of other studies that come to the same conclusion.

If you want a Real World example, look at Texas. Sure, malpractice premiums came down but the savings didn't pass through to the consumer. Providers just made more.

New study: Tort reform has not reduced health care costs in Texas | www.statesman.com

 

[frank]

the next thing I am looking for on my medicals bills is that medicare will pay this much but you are responsible for the balance if you wish to see the doctor.

 

[Texas Proud]

The sad truth in the USA is that many people are denied health insurance (myself included) even when they can afford to pay for it (unwillingly...). I bought into my state's high-risk pool after BCBS refused to take me - and pay $941 a month for myself. It's bankruptcy insurance for me, and has a known end in sight when on June 1, I get on Medicare. Still, it is appalling. It does get me a good discount on prescriptions, but very little else. What it really does is cover me so that if something catastrophic happens, there is an upper limit to what I have to pay out of pocket - and they pay 100% after that. Three more months and counting down.

I worked in the healthcare industry for the last 12 years of my working life. There is nothing in the Time article that strikes me as inaccurate, or unusual. Not only does Medicare get a huge discount on services it pays for, all insurance companies do. Nearly 20 years ago I had a surgery bill for $21K (from the hospital, not counting doctors' fees). The hospital got about $7K for that bill from my insurer.

The whole system is crazy. My internist thinks it's crazy. All the doctors have to employ people whose entire job is arguing about payments, with insurance companies.

I hope it gets better. At least on Medicare I won't pay as much for the insurance.

Here is the problem with this statement.... that the $21K is the amount that should have been billed based on the costs to provide you service with a reasonable profit...

My example is even worse.... the hospital's charge for a 5 minute operation on my DW was over $10K... the cost to us was about $660 with our insurance.... there is NO WAY that it should ever be billed at $10K... they know it, insurance knows it, we know it.... so why do they even have these stupid prices...

And it is not even limited to hospitals.... they had two anesthesiologists billing us at over $1K each... when I called they said they spent 15 minutes... (no way, I was there when he came and gave my wife injections and after the operation... probably 10 minutes total).. but, who charges $4,000 per hour And why did we need two of them

So as long as hospitals and doctors are trying to charge these ridiculous amounts, we will not believe that they are not making money at the low amounts they get reimbursed....

 

[Gatordoc50]

Here is the problem with this statement.... that the $21K is the amount that should have been billed based on the costs to provide you service with a reasonable profit...

My example is even worse.... the hospital's charge for a 5 minute operation on my DW was over $10K... the cost to us was about $660 with our insurance.... there is NO WAY that it should ever be billed at $10K... they know it, insurance knows it, we know it.... so why do they even have these stupid prices...

And it is not even limited to hospitals.... they had two anesthesiologists billing us at over $1K each... when I called they said they spent 15 minutes... (no way, I was there when he came and gave my wife injections and after the operation... probably 10 minutes total).. but, who charges $4,000 per hour And why did we need two of them

So as long as hospitals and doctors are trying to charge these ridiculous amounts, we will not believe that they are not making money at the low amounts they get reimbursed....

You think that's bad. I once had a realtor charge me 90 thousand dollars to sell my house. Took her ten minutes tops to fill out the contract. Crazy world.

 

[rbmrtn]

I'm sure that physicians and other providers would like to be paid more than Medicare pays but that doesn't mean to receiving less that the preferred amount means that provider is losing money.

From what I can gather medicare uses something called RBRVS, something to do with relative value of service, and the AMA is the one that recommends the price to CMS. Here's some info on it, Does Medicare Under-Pay Hospitals? | Health Beat by Maggie Mahar

Private insurers base their payments off of medicares rates, so they must be underpaying as well.

If they are underpaid so much why do they do any medicare at all ?

The bigger problems seems to be that no one knows why any of this cost so much and where any of the money goes. Prices are unknown and different based location, payment method, insurance provider and anything else they can dream up.

 

[Midpack]

The bigger problems seems to be that no one knows why any of this cost so much and where any of the money goes. Prices are unknown and different based location, payment method, insurance provider and anything else they can dream up.

Not a complete answer by any means but maybe a piece of the puzzle.

Our administrative costs are double or triple all other OECD countries too, among other costs not shown on this chart.

 

[bUU]

The information on that chart is critical. We can believe hospitals and doctors when they say that they're not making big money... Where's the money going? Look at the left half of that chart!

 

[kevink]

That last chart really tells the tale Midpack; thanks for posting it!

The article is long but really worth reading all the way through for those that may have just skimmed. The author's proposed improvements and partial solutions at the end are especially interesting to me because of how moderate and nuanced they are - bascially because he knows how powerful and wealthy the powers-that-be (insurance companies, hospitals, Doctor's lobbies, big pharma, etc.) really are.

Given how broken the system is our collective unwillingness to look at what does work in every other first-world country is pretty astonishing, but perhaps not given the general lack of media coverage of health care in other countries.

Here's the link to the Jon Stewart interview with the author that I believe Midpack mentioned:

Exclusive - Steven Brill Extended Interview Pt. 1 - The Daily Show with Jon Stewart - 02/21/13 - Video Clip | Comedy Central

 

[Midpack]

Here's the link to the Jon Stewart interview with the author that I believe Midpack mentioned:

Exclusive - Steven Brill Extended Interview Pt. 1 - The Daily Show with Jon Stewart - 02/21/13 - Video Clip | Comedy Central

I watched both, but this is the one I mentioned with Charlie Rose, understandably more substantial than the Stewart clip. The article itself goes into more than either TV piece.

Charlie Rose - Steven Brill

 

[Katsmeow]

The information on that chart is critical. We can believe hospitals and doctors when they say that they're not making big money... Where's the money going? Look at the left half of that chart!

I'm not sure you can believe them. You have to factor in the salaries that everyone is making. If the head of the hospital is making $1 million a year then it might appear that the net profits are not that high, but there may be a lot of people making a great deal of money. Read the article in Time about some of the salaries.

The article is long but really worth reading all the way through for those that may have just skimmed. The author's proposed improvements and partial solutions at the end are especially interesting to me because of how moderate and nuanced they are - bascially because he knows how powerful and wealthy the powers-that-be (insurance companies, hospitals, Doctor's lobbies, big pharma, etc.) really are.

The article was a great article but the part of it I didn't totally agree with was his solutions. I think the article is a powerful argument in favor of, well, extending Medicare (or single payer) to everyone... The other alternative would be price controls. See this article in Slate as to that point regarding the article:

http://www.slate.com/blogs/moneybox...e_steven_brill_s_opus_on_hospital_prices.html

 

[bUU]

I'm not sure you can believe them. You have to factor in the salaries that everyone is making. If the head of the hospital is making $1 million a year then it might appear that the net profits are not that high, but there may be a lot of people making a great deal of money. Read the article in Time about some of the salaries.

I never received a bill from a hospital with a line item for "head of the hospital salary". Furthermore, I suspect the CEO of most of the companies that we interact with in some way, throughout our day earn in excess of $1 million a year. If you want to talk about executive salaries, you're honor-bound to talk about it as a societal issue, not a health care issue, and my experience is that people don't get much mileage with such criticisms of society. Regardless, as a societal matter, it doesn't discount what Midpack posted one bit, i.e., highlighting that the problem of cost in health care comes far more so from pharma and medical equipment, not service providers.

I think the article is a powerful argument in favor of, well, extending Medicare (or single payer) to everyone... The other alternative would be price controls.

The difference between the two is pretty slim.

 

[rbmrtn]

Here is a link to book review on cspan a few weeks ago. The author , David Goldhill, discussed his experience with the healthcare system. The video is about an hour long.

Book Discussion on [Catastrophic Care] - C-SPAN Video Library

A NYTs review

Father's Death Spurs Son To Tackle Health Care : NPR