Why medical bills are killing us.

[Katsmeow]

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)

 

[MichaelB]

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.

 

[bUU]

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.

 

[SumDay]

A huge piece of this very complex puzzle is end-of-life care:

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.

 

[Midpack]

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?

 

[samclem]

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.

 

[Buckeye]

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.

 

[Meadbh]

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.

 

[meierlde]

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.

 

[meierlde]

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).

 

[bondi688]

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.

 

[Buckeye]

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.

 

[Meadbh]

You are a doctor, am I correct?

Yes.

 

[MooreBonds]

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

 

[MichaelB]

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.

 

[Texas Proud]

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.

My sister said that is normal with people on Medicare.... the docs know they will get paid and want to milk the patient as much as possible...

She works in a hospital, so she sees it all the time...


She also said that whenever a patient or family refuses to have them done, they do whatever to kick them out of the hospital... this happened to one of my other sisters....

 

[samclem]

The answer to at least some of this is hospice care. It's not always appropriate or possible, but when everything lines up it is a wonderful option.

My FIL died this year after a struggle with cancer. He got good, appropriate, aggressive treatment as long as it was appropriate, but when the time for that ended he and my MIL agreed to hospice. After that, "Dad" only went to the hospital once for a short, acute incident, otherwise he stayed at home and got daily visits from the hospice nurse. My MIL had someone to call 24/7 about various issues, and they would come out any time she asked. The pain meds were made readily available, and he spent his time at home with her and his kids. He died there peacefully. It was much better and more humane for everyone than if he'd become a lab rat/profit center for medical practitioners.

 

[gerrym51]

its obvious until it happens to you or a loved one.


it's not an easy dilemma

 

[SumDay]

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.

I had this happen with both my parents, who died within 10 months of one another. It totally changed how I feel about end-of-life issues, and I've had some very frank talks with our kids about what I consider to be quality of life. I think I'm going to make a video for them to show the doctor when they need to. I had POA, health care directive, etc., and I had to BATTLE those doctors to let them both die in peace. Heard about the woman in CA who died because they nurse wouldn't do CPR? I had just the opposite issue. I do not want my kids to be made to feel guilty because it's time for me to go, and the doctors won't let me until they suck every last dime out of whatever resources I have.

 

[Katsmeow]

The answer to at least some of this is hospice care. It's not always appropriate or possible, but when everything lines up it is a wonderful option.

My uncle just died at home in hospice care. It was a good option. He was 96 and had been active and in good mental health (even still driving) until close to the end. He apparently had severe blockages in several arteries and couldn't withstand surgery and his doctor was frank that nothing could be done and he was sent home to hospice care and died within a few weeks. I actually thought this was pretty good.

On the other hand talking to my mother I think that some of the family members were taken aback. One family member didn't like the person from hospice talking to my uncle and referring to "the little time you have left." I asked my mom what was wrong with that and she felt that he shouldn't be told that he only had a little time left. She also at first tended to feel that it just wasn't...proper to have him die at home. She felt that he should be in the hospital. I do think she was taken aback a bit in that she was told (by other family members so this might not be entirely accurate) that basically the doctor said that she could do nothing more for him and discharged him to hospice and basically refused to do anything more. While it probably wasn't as cold as it sounded, well, it did sound cold. I do believe in hospice, but I can see why some might be taken aback by it.

On the other hand, I reminded her of how miserable her sister (the uncle is question was her sister's widower) was in dying in the hospital at around age 90 and she agreed that her sister had been miserable and agreed that the uncle's death at home was far more comfortable for him.

Still, while she could see the logic of it, some part of her just feels that people should be in the hospital when they die.

 

[Gatordoc50]

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.

I think the confusion arises when we use the term " insurance " when speaking of access to health care. Insurance requires underwriting and its purpose is to cover unlikely events. The cost to cover likely events without underwriting would be astronomical. And it is.

 

[bUU]

There is nothing within the word "insurance" that necessarily restricts use of the word to "unlikely" events. For example, there are a number of life insurance policies that are intended to always pay off. The word really encompasses all manner of arrangements where someone protects themselves from something, in this case, the cost of some service. The "active ingredient" in insurance, from the insured's perspective, is the way pooling risk helps guard keep the costs consistent without regard to then unforeseen.

 

[Gatordoc50]

There is nothing within the word "insurance" that necessarily restricts use of the word to "unlikely" events. For example, there are a number of life insurance policies that are intended to always pay off. The word really encompasses all manner of arrangements where someone protects themselves from something, in this case, the cost of some service. The "active ingredient" in insurance, from the insured's perspective, is the way pooling risk helps guard keep the costs consistent without regard to then unforeseen.

Yes, but those life insurance policies have underwriting. And yes there can be any manner of arrangements. That was my original point. That the arrangement we want transfers risk for ordinary events. We should retain some of those risks to control costs. Does your auto insurance cover oil changes? Of course not.

 

[Midpack]

I had this happen with both my parents, who died within 10 months of one another. It totally changed how I feel about end-of-life issues, and I've had some very frank talks with our kids about what I consider to be quality of life. I think I'm going to make a video for them to show the doctor when they need to. I had POA, health care directive, etc., and I had to BATTLE those doctors to let them both die in peace. Heard about the woman in CA who died because they nurse wouldn't do CPR? I had just the opposite issue. I do not want my kids to be made to feel guilty because it's time for me to go, and the doctors won't let me until they suck every last dime out of whatever resources I have.

First and foremost, I am sorry for the experience you went through, very sad.

My parents are adamant about 'no heroic measures' at end of life, and I hope I don't find myself in similar circumstances. They've both told my sister and I that they hope they pass in their sleep uneventfully, I assume that's an almost universal wish.

But even though I'm not a doctor or in any way part of the health care system, I'd like to think "the doctors won't let me until they suck every last dime out of whatever resources I have" is unfair to most doctors. I assume there's a lot factoring into their actions including:

• doctors don't want to have to wonder did I do everything within reason to give the patient a reasonable chance at life
• right or wrong, doctors have to have legal consequences in the back of their minds, and they're probably often reminded by insurers and hospital admins to err on the side of too much care for those reasons
• doctors are left with vague or no instructions regarding the patients wishes too often - any end of life patient who does not provide any instructions is the most responsible party IMO
• and even with patients instructions, I am sure there are family members pressuring doctors to disregard the patient
• and hospital admins may be pushing doctors for reasons aside from money as well
• just what comes easily to mind, I am sure there's more.

While I agree doctors and hospitals are clearly incentivized to over test, over prescribe, over spend in general where patients who are not at significant risk of dying - I'd like to think they're motivated by other factors when end of life circumstances are at hand.

I may be naive...

And discussion of end of life issues needs to be part of the debate without people using inflammatory 'death panel' tactics. As another member posted earlier, some end of life care is appropriate, some may not be. Some if not all other developed countries with much lower health care costs must have grappled with end of life issues, hopefully we can learn from their experiences. Though what little I found on Google indicated that the US end of life care outcomes are better than many developed countries (7th in the world) whereas our infant mortality, longevity outcomes are far lower in the rankings.

 

[samclem]

Though what little I found on Google indicated that the US end of life care outcomes are better than many developed countries (7th in the world) whereas our infant mortality, longevity outcomes are far lower in the rankings.

The infant mortality statistics are >highly< suspect. The US gets "dinged" for the deaths of many infants that would never have been counted as live births in other countries.