Why medical bills are killing us.

[bondi688]

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

Steven Brill wrote this long and somewhat disconcerting article in Time Magazine on the increasingly costly medical bills. The almost unimaginable magnitude of the coming health care bills for the large population of aging boomers can exhaust private insurance and government resources. Employers may no longer be able to afford paying the ever increasing premiums for their employees. Private insurance companies are not bottomless wells, and more and more of them can go into bankruptcy or will just quit the field when the business become not viable economically. I hope I am not being chicken little over this.

 

[scrinch]

bondi688, good post. A non-profit university hospital making $530 million/yr profit; uninsured customers paying 5-100x as much as an insured or Medicare customer for the same service; pharmaceutical/healthcare companies spending $billions on Washington lobbying... something is wrong with this picture! I'm not sure that regulation is the answer. I'm not sure that a freer market is the answer. But IMO charging a 64-year-old patient $283 for a chest x-ray while charging $20 to a 65-year-old does need to be fixed.

 

[Katsmeow]

Very good article.

I have long felt that the real health care cost issue is that prices are just insane and bear no relationship to anything.

A few days ago my husband took my daughter who had a fever and a cough to an urgent care center. It wasn't all that serious, but we couldn't ignore it (she has a blood disorder and fever can result in a serious anemia for her). They ran a strep test and a test for flu and examined her and gave her a prescription. Total undiscounted price was about $500. We have insurance so it was discounted to under $200 (which we will pay since we have a high deductible policy). I'm OK with the discounted price although I thought it was too high, but I would sure have hated to come in there if I didn't have insurance and been charged $500!

 

[bUU]

The only way I see us getting a handle on prices is developing and sharing the buying power across all consumers - essentially have a nationwide entity of some sort serving as buyer's agent for every consumer of health care in the country.

Of course, not everyone would be happy with an arrangement that gets health care costs under control: Health care service providers, medical equipment suppliers, and pharmaceutical companies, and their employees and investors, all would be adversely affected by getting health care costs under control.

 

[FIRE'd@51]

Total undiscounted price was about $500. We have insurance so it was discounted to under $200 (which we will pay since we have a high deductible policy). I'm OK with the discounted price although I thought it was too high, but I would sure have hated to come in there if I didn't have insurance and been charged $500!

So would I. On the other hand, the individual without insurance who pays $500 for that visit isn't paying $600 per month for a $5K deductible health insurance policy.

There is so much cost shifting in healthcare that the price structure seems insane. I have come to look at it as someone who is paying $600 per month for a $5K deductible insurance policy is really also paying for the negotiated rate with a substantial part of his premium. IOW, should an individual who chooses not to buy health insurance necessarily pay the same price for a procedure as someone who pays $7,200 per year for insurance? Isn't that like arguing that one who refuses to join a union (and I believe everyone should have that right) should automatically get the same compensation that is negotiated by the union for its dues-paying members instead of having to negotiate his own compensation?

According to the article, the US population (314 million) is expected to spend $2.8 trillion on health care this year. That's $8,900 per person. How we choose to pay that bill is really a matter of public policy.

 

[LakeTravis]

So would I. On the other hand, the individual without insurance who pays $500 for that visit isn't paying $600 per month for a $5K deductible health insurance policy.

There is so much cost shifting in healthcare that the price structure seems insane. I have come to look at it as someone who is paying $600 per month for a $5K deductible insurance policy is really also paying for the negotiated rate with a substantial part of his premium. IOW, should an individual who chooses not to buy health insurance necessarily pay the same price for a procedure as someone who pays $7,200 per year for insurance? Isn't that like arguing that one who refuses to join a union (and I believe everyone should have that right) should automatically get the same compensation that is negotiated by the union for its dues-paying members instead of having to negotiate his own compensation?

According to the article, the US population (314 million) is expected to spend $2.8 trillion on health care this year. That's $8,900 per person. How we choose to pay that bill is really a matter of public policy.

Excellent point. I think part of the current issue is that health care costs are somewhat like escrowed property taxes and insurance - most people don't really pay them much scrutiny because they are lumped together with their single monthly mortgage payment.

I don't think the situation will change for the better until it's clear to everyone exactly what something will cost, and the providers have to be completely upfront about how much they are going to charge.

For example, last year I had a surgery. Even though I have insurance and I ended up not having to pay a penny, several weeks before it was scheduled I called the surgeon's office, the hospital surgery center, and the anesthesiologist to determine the total cost. It was like pulling teeth - and I couldn't shake the feeling that everyone I spoke with was not accustomed to discussing their charges with a patient.

 

[george76]

So would I. On the other hand, the individual without insurance who pays $500 for that visit isn't paying $600 per month for a $5K deductible health insurance policy.

There is so much cost shifting in healthcare that the price structure seems insane. I have come to look at it as someone who is paying $600 per month for a $5K deductible insurance policy is really also paying for the negotiated rate with a substantial part of his premium. IOW, should an individual who chooses not to buy health insurance necessarily pay the same price for a procedure as someone who pays $7,200 per year for insurance? Isn't that like arguing that one who refuses to join a union (and I believe everyone should have that right) should automatically get the same compensation that is negotiated by the union for its dues-paying members instead of having to negotiate his own compensation?

According to the article, the US population (314 million) is expected to spend $2.8 trillion on health care this year. That's $8,900 per person. How we choose to pay that bill is really a matter of public policy.

I agree totally that a person who chooses not to buy health insurance should pay a far higher amount for a procedure than someone who decides to buy health insurance.

I just want to point out that is very common that people don't have health insurance because they simply were not allowed to buy one. If you lose your job, can't find another one and you have a pre-existing condition, the insurance company won't touch you. There are also many employers that don't even offer health insurance. That's not the fault of the poor person who tried but wasn't allowed to buy insurance.

 

[FIRE'd@51]

I just want to point out that is very common that people don't have health insurance because they simply were not allowed to buy one. If you lose your job, can't find another one and you have a pre-existing condition, the insurance company won't touch you. There are also many employers that don't even offer health insurance. That's not the fault of the poor person who tried but wasn't allowed to buy insurance.

Yes, I totally agree with you for those people. Hopefully, that will end next year.

 

[Midpack]

I've made my HC views known here before (probably ad nauseum), so I'll go with a link and 'a picture is worth a thousand words...'

Health Costs: How the U.S. Compares With Other Countries | PBS NewsHour

 

[bUU]

Somewhere in those charts I suspect are charts that identify the cause of the disparity, i.e., not "too much health care" but rather too much wages, dividends and/or gains for those that profit from the industry. And so it makes sense (frustratingly so, perhaps) that in the most capitalist of countries that the disparity would exist. (Incidentally, the same phenomenon can be found in other industries, such as the financial services industry, recently pointed out by Helaine Olen.) As such, I wonder if anyone in the public sphere (except perhaps for the true Socialists) is seriously suggesting that the disparity should be remedied; or is it just another convenient matter on which to hang sound bites. We talk about "waste" within the system but if we could really put our finger on waste, do we have the will to do what is necessary to eliminate that waste?

 

[NYEXPAT]

I remember hearing somewhere that 50% of all healthcare Dollars are spent on the 5% of the population that are chronically ill.

I pay about $85.00/mth for a family of 3 and am more than satisfied with the level of care and value received!

 

[eytonxav]

Somewhere in those charts I suspect are charts that identify the cause of the disparity, i.e., not "too much health care" but rather too much wages, dividends and/or gains for those that profit from the industry. And so it makes sense (frustratingly so, perhaps) that in the most capitalist of countries that the disparity would exist. (Incidentally, the same phenomenon can be found in other industries, such as the financial services industry, recently pointed out by Helaine Olen.) As such, I wonder if anyone in the public sphere (except perhaps for the true Socialists) is seriously suggesting that the disparity should be remedied; or is it just another convenient matter on which to hang sound bites. We talk about "waste" within the system but if we could really put our finger on waste, do we have the will to do what is necessary to eliminate that waste?

I suspect the patients who are ultimately bearing the costs for these services have the will but not the leverage to do anything about it. Its unfortunate that we have great medical technology, so so actual medical care quality, and possibly the highest cost of administration in any country.

 

[Texas Proud]

Excellent point. I think part of the current issue is that health care costs are somewhat like escrowed property taxes and insurance - most people don't really pay them much scrutiny because they are lumped together with their single monthly mortgage payment.

I don't think the situation will change for the better until it's clear to everyone exactly what something will cost, and the providers have to be completely upfront about how much they are going to charge.

For example, last year I had a surgery. Even though I have insurance and I ended up not having to pay a penny, several weeks before it was scheduled I called the surgeon's office, the hospital surgery center, and the anesthesiologist to determine the total cost. It was like pulling teeth - and I couldn't shake the feeling that everyone I spoke with was not accustomed to discussing their charges with a patient.

One of the reasons that they are not accustomed is that they do not talk about their charges... one of the things that I have found is that most do not KNOW what their charges will be... I think their system has different prices for different insurance companies etc. because they always want to know which insurance company I have before telling me a cost... and I am not talking about the insurance price, but the retail price...

 

[Texas Proud]

I've made my HC views known here before (probably ad nauseum), so I'll go with a link and 'a picture is worth a thousand words...'

Health Costs: How the U.S. Compares With Other Countries | PBS NewsHour

I am a bit surprised that we spend about $4K per person using public funds... heck, that is more than almost all other countries... and more than a significant number of countries TOTAL spending...

 

[imoldernu]

My guess is that few will take the time to read through all 11 pages of the article, but FWIW... the last two pages sum up the future prospects of reform.
... not likely

Three reasons for the sad prognosis: Lobbies, Blind Politicians, Greed.

This Geezer's philosophy:
-Appreciate what you have
-Understand the limitations on your ability to change the world
-Enjoy being a fly on the wall of evolving history

Will re-read the article when blood pressure goes down. Thanks for posting.

 

[Stanley]

I am a bit surprised that we spend about $4K per person using public funds... heck, that is more than almost all other countries... and more than a significant number of countries TOTAL spending...

+1

This can't be that hard. Other countries provide good medical care to their population at cost that is often half of what we spend. It can and is being done.

 

[Midpack]

My guess is that few will take the time to read through all 11 pages of the article

Guilty. Having now read it, it is a good article though long on examples for me (I've heard the stories, lived them with employees for 35 years too). If nothing else, it's worthwhile to read the last few pages. Ultimately we the people are the main reason this (and the debt/deficit fiasco) is going nowhere. As long as there's no consensus outside the beltway, special interests increasingly rule the day...

The drag on our overall economy that comes with taxpayers, employers and consumers spending so much more than is spent in any other country for the same product is unsustainable. Health care is eating away at our economy and our treasury.

The health care industry seems to have the will and the means to keep it that way. 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.

 

[bUU]

I suspect the patients who are ultimately bearing the costs for these services have the will but not the leverage to do anything about it.

I wouldn't be so sure. It sounds good when expressed as "lowering your prices" but not so good when expressed as "imposing drastic pay cuts on those angels willing to be nurses" and "big brother interfering in business' right to make profit".

 

[Katsmeow]

My guess is that few will take the time to read through all 11 pages of the article, but FWIW... the last two pages sum up the future prospects of reform.
... not likely

I read the whole article which I found very good. What struck me is just how much pure profit there is for the big hospitals in particular.

IOW, should an individual who chooses not to buy health insurance necessarily pay the same price for a procedure as someone who pays $7,200 per year for insurance?

1. Not everyone can obtain a policy who would be willing to do so.
2. Not everyone who can obtain a policy can afford to pay the premium.
3. Even if you have coverage, it can be frighteningly easy to go out of network with a provider and be hit with full undiscounted rates. Often the ancillary providers are not in network and it is very easy to miss one even if you are being diligent.

 

[bUU]

We had our company's health plan open enrollment meeting yesterday afternoon and I think it is interesting the way this was expressed to us - that part of what we're paying for, when we pay for health insurance, is for the discounts that are negotiated with in-plan providers. It seems a strange thing to me to "pay for discounts" (which is why I made the suggestion I made at the top of the thread).

 

[Midpack]

Just noticed that Charlie Rose is interviewing the author of the TIME article. Aired last night and today in most TV markets in case anyone is interested. It's on my DVR, I'll watch it later today...

 

[Tyro]

Just noticed that Charlie Rose spent his full 1-hour show interviewing the author of the TIME article. Aired last night and today in most TV markets in case anyone is interested. It's on my DVR, I'll watch it later today...

He was also interviewed on The Daily Show last night.
The Daily Show with Jon Stewart - Political Comedy - Fake News | Comedy Central

I'm glad this was posted. I was about to do it myself if it hadn't been, though I think it's more than just a "Health" issue. It's having effect on all of our bottom lines, which in my mind makes it a "Money" issue as well.

I think Steven Brill will be interviewed about this article on a lot more talk venues in days/weeks to come.

Tyro

 

[Alan]

I am a bit surprised that we spend about $4K per person using public funds... heck, that is more than almost all other countries... and more than a significant number of countries TOTAL spending...

I've seen this before and it is surprising. I don't know if this public spending on healthcare includes the tax subsidies employers and employees receive on HI premiums. Even though I am very fortunate, and very pleased, to have retiree HI, there was an immediate increase in what I actually pay as the premiums no longer were taken before tax, plus I lost the FSA that I had as an employee.

 

[ERhoosier]

+1

This can't be that hard. Other countries provide good medical care to their population at cost that is often half of what we spend. It can and is being done.

Need to control 3 things in US health care:

1. Overutilization- More care is often NOT better care, but can lead to worse outcomes. Providers and patients need to understand this.
2. Greed- Profit margins in US health care remain rather (ahem) 'generous'
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.

 

[Mulligan]

Need to control 3 things in US health care:

1. Overutilization- More care is often NOT better care, but can lead to worse outcomes. Providers and patients need to understand this.
2. Greed- Profit margins in US health care remain rather (ahem) 'generous'
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.

Just last night a reform Doctor was talking about the costs of over utilization on tv. There were 3-4 examples cited, but the one I remember was MRI's for lower back pain. I had a near 3 week bedridden encounter with my lower back a few years ago when it went out on me. GF was mad at me because I wouldn't go to doctor. I told her the first thing they would do was order an MRI and I didn't want to pay for it. Plus it would have hurt to bad to go. I knew time was on my side and eventually my back would give up the fight and get tired of laying around. The decision "paid off" literally.