In a rational world, this would be described as criminal enterprise
rigged to exploit the desperate who inevitable need service
immediately by the time they activate the service. In fact this
report is so insane, I do not know how a single American can still
stand up to defend it. As soon defend Hitler’s special treatment
of the Jews.
Even better it practices genocide on those who cannot afford to
access the system by outright gambling with their lives.
I would generate a petition outlining this position properly and get
every elected official to sign of on his endorsement so every voter
does know who supports the continuance of this galloping criminal
enterprise. Make them pay for it.
Anatomy of the
World's Most Insane Health Care Billing System
By Morgan Housel
May 14, 2013
A few years ago, I
went to the doctor for a simple procedure. I had high-deductible
health insurance and would be paying for the procedure out of pocket.
Before heading in I
asked the receptionist what I thought was a simple question: "How
much is this going to cost?"
She had no idea. And
she had no way to check. She looked at me like it was an unreasonable
question. A manager contacted a third-party billing agency to get me
a quote, which ended up being nothing close to what I actually paid
in the end.
Economic models assume
participants have perfect information. In reality, they often have no
information whatsoever.
I thought this was a
glaring example of how screwy health care pricing is. But I had no
idea.
A permanent pacemaker
implant at Pennsylvania's Phoenixville Hospital is billed at
$211,534. Four hours away at Unitown Hospital, the same procedure
costs $19,747, or 91% less. 163 hospitals across the country charge
at least $100,000 for a pacemaker, while 46 charge less than $30,000.
The official bill rate
to treat chronic obstructive pulmonary disease, or COPD, at Bayonne
Hospital Center in New Jersey is $99,690. At Lake Whitney Hospital in
Texas, it's $3,134, or 97% less. Thirty-five hospitals bill an
average of more than $50,000 to treat COPD, while 161 bill less than
$7,500.
A kidney and urinary
tract infection faces a $132,569 bill at Crozer Chester Medical
Center in Pennsylvania, but $6,224 at Wyoming County Community
Hospital.
Those are just a few
examples I pulled out of a massive database released by the
Centers for Medicare and Medicaid Services last week. The group
spilled the beans on what 3,000 hospitals charge for 100 of the most
common medical procedures. It then compares those "chargemaster"
prices to what Medicare actually paid for the treatments, based on
hospital-specific estimates of the treatment's cost, including
administrative overhead.
The database -- which
contains nearly 1 million data points and crashed my computer three
times -- has two screaming-in-your-face takeaways.
The first is the
difference between bill rates among hospitals. It's just huge. At
least a dozen treatments I looked up have a difference between the
high-cost and low-cost provider of more than ten-fold, and several
treatments will cost more than 20 times as much depending on what
hospital you're in.
The report doesn't
contain perhaps the most important metric -- outcomes and quality of
procedures performed. Teaching hospitals and hospitals that receive
an influx of seriously ill patient transfers from other hospitals
will also have higher-than-average costs.
But even looking at
average prices by state shows massive discrepancies. In California,
the average hospital charges $101,844 to treat respiratory
infections, while Maryland hospitals bill an average of $18,144, or
82% less. New Jersey hospitals bill an average for $72,084 for
"simple pneumonia," while Massachusetts hospitals charge an
average of $20,722.
The second takeaway is
that the gap between what hospitals charge for procedures and what
Medicare actually pays for those procedures is off the charts. Of the
100 procedures tracked in the database, the average difference
between "average charges" and "average payments"
is -- I'm not making this up – 72%.
Go back to my
pacemaker example above. Phoenixville Hospital may charge $211,534
for a pacemaker implant, but Medicare pays the hospital $17,835 for
the procedure. Unitown Hospital bills $19,747 for the treatment, and
is reimbursed $15,281. What starts out as a five-fold price
discrepancy shrinks to a 14% difference in the end.
Steven Brill, a
journalist who wrote an eye-opening cover story for TIME earlier
this year exposing discrepancies in health-care bill prices that
paved the way for the data's release,wrote last week:
The hospital lobby,
led by the American Hospital Association, is going to howl that
publication of these chargemaster prices is unfair. Only a minority
of patients are actually asked to pay those amounts, it will argue.
Insurance companies, which cover the majority of patients, receive
huge discounts off the list prices, though they pay substantially
more than Medicare does.
True, but that doesn't
settle the matter. It actually highlights some of the deepest
problems. Those "minority of patients" are no small group;
they're the estimated 48 million Americans without health insurance.
For medical providers to say that chargemaster prices don't reflect
the true cost of care is to admit that some of the most financially
vulnerable Americans may be being billed absurdly inflated prices.
It's ironic, but some of the greatest benefits to having health
insurance isn't necessarily the insurance coverage, but the
price-negotiating power that insurance companies strike with care
providers.
Imagine a banana in a
supermarket. It costs $1 for those paying with Visa, $3 for those
paying with MasterCard, and $32 for those paying with cash. You can't
sign up for Visa until you're 65, and you can only get a MasterCard
if you have a nice employer or a decent income. Worse, customers have
no idea that such price discrepancy exists. They don't even know how
much they'll pay for the banana until long after they've eaten it.
That would be absurd.
No one would put up with it.
But it's how our
health care system works.
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