published Tuesday, May 21st, 2013

The impenetrable mystery: What health care really costs

Jennifer Clark is a good comparison shopper and a bad gambler.

Clark and her husband took a risk when they opted out of group family insurance at work, and then she developed a kidney stone.

The sticker price for her emergency room visit, follow-up and lithotripsy to break up a kidney stone was just over $17,000 -- the price of a new compact car, or a down payment on a home, or the difference for some between solvency and bankruptcy.

Here's where the comparison shopping comes in: It showed this family, and all of us, what an impossible and ridiculous nightmare maze our health care system -- or lack thereof -- already is, from caregivers to hospitals to insurers.

Health care already is and was a mess long before the Affordable Health Care Act, which is set to begin in 2014 as a first effort to help straighten things out.

Clark, who lives in Fort Oglethorpe, first was charged $7,000 for her emergency room visit. Because she is a "self-payer" the hospital ultimately agreed to charge her $900. Her follow-up was $1,600. And the lithotripsy price -- which she shopped at hospitals in Chattanooga and within a two-hour drive -- ranged from $8,600 to about $4,300.

Clark, incredulous, asks exactly the right questions:

"How can there be that much of a difference? What does it actually cost?"

The answer is hard to find, as Chattanooga Times Free Press reporter Kate Harrison found in reporting a story Sunday on the "seemingly shape-shifting nature of costs and charges." Traditionally, the only real measure has been Medicare's set payment for each of hundreds of procedures.

Only uninsured patient who are not indigent are billed from the hospital's inflated retail price list, dubbed the "chargemaster." This is what hospitals charge before negotiating down payments with insurance companies or Medicare.

Now, as part of changes leading up to the implementation of the Affordable Care Act, Medicare/Medicaid norms have been released in a massive database online. The trick for consumers is to know how to use the information -- especially if they have insurance because each insurance company has contracted its own rates for each group. The insurance rates are private, at least for now.

That's actually part of the fly in the ointment.

Tennessee Hospital Association President Craig Becker says the real picture won't be clear until insurance companies put what they pay online.

Insurance companies say they no longer base their rates just on the chargemaster, but also on "diagnosis-related groups." And the insurance companies -- which make a profit, too -- carefully guard their mojo-algorithms from everyone: government, employers, workers and direct customers.

"Charges don't really mean anything," Becker said.

Most of us customers seem to already get that. And what's still more complicated and not addressed yet by any clear data is how insured customers get charged or don't get charged for the difference between what the hospitals and doctors bill and what insurance pays.

But it is illuminating that the database shows the disparate range in just hospital charges.

For all its public money concerns, and despite general attitudes that teaching hospitals cost more, Erlanger is the clear bargain -- if we can call any health care costs a bargain.

On six common surgeries, Erlanger and Memorial billings are lower than national average billings. Parkridge is on par or slightly above national average. SkyRidge Medical Center in Cleveland should change its name to Skyhigh, since it charges as much as twice the national average on at least two of the six surgeries the paper examined. Not enough information was available for a generalization on Hutcheson and Hamilton medical centers in North Georgia.

It's a given that life is complicated. But something as important as health care should not be impenetrable.

A longtime health care advocate with the Tennessee Justice Center, Gordon Bonnyman, put it best: "No other industry works like this, where the consumer doesn't know what the prices are, where they are incapable of understanding or controlling the aspects of the procedure they're paying for and the doctor is deciding for them; and where there is little to no accountability for the quality of the product."

This is what the Affordable Care Act is aimed at fixing. The new law -- dubbed Obamacare by the insurance-driven lobby propelling conservatives to hopelessly spend $55 million dollars in taxpayer money to try yet again to repeal it -- would shift the pay system to outcomes and quality care, not mojo.

It has gotten "precious little respect" from many Tennessee, says Bonnyman. Yet it has a huge potential to improve the system in ways consumers can't.

What might it be like to shop where the prices and goods are not hidden? Insurers and providers might not like it pulling back the curtain on costs, but customers just might.

Health care as we know it today is a ridiculous maze of smoke and mirrors charging one thing, accepting another from insurance companies and accepting something else from uninsured customers (people with no third party making a profit).

Though it is "free market" and not government run, health care really is the least transparent thing we pay for. Not even taxes are this hard to trace.

It is long past time to reinvent this wheel.

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AndrewLohr said...

Free-market prices convey information. That O'Romneycare is raising insurance premiums--and the HHS secretary is asking insurance companies to pay for ads FOR O'Romneycare--shows us it's not all it's cracked up to be. But yeah, let (make) hospitals post their charges. Likewise other medical providers. Probably insurance providers too (and let them charge for contraceptives as they see fit).

Since prices convey information, when the government forces prices to be changed the government is forcing lies to be told.

May 21, 2013 at 12:43 a.m.
anticorp said...

We should all know there will continue to be an excrement blizzard about the ACA, in spite of the facts. The Foxaphiles will still believe and say white is black, even as the rest of the world knows different. Their faith based belief system extends beyond their spirituality.

“after the passage of Romney’s reforms, the rate of per capita health-care spending growth slowed in Massachusetts both in absolute terms and relative to the national average.

Massachusetts went from having a health-care spending growth rate well above the national average to one just a little bit above. Situating Massachusetts in the context of the rest of New England makes the change in spending rates even starker: prior to Romney’s reforms, Massachusetts personal health-care spending grew faster than the New England average most years. After his reforms, it grew slower than the New England average (often having one of the lowest rates of health-care spending growth in the region). Texas is doing a worse job at taming the rate of health-care spending growth than Massachusetts “ http://www.frumforum.com/romneycare-bent-the-cost-curve/

It would be funny if it were happening to some other nation, but this is happening to us.

May 23, 2013 at 6:48 a.m.
Rickaroo said...

"Health care as we know it today is a ridiculous maze of smoke and mirrors charging one thing, accepting another from insurance companies and accepting something else from uninsured customers (people with no third party making a profit)...Though it is 'free market' and not government run, health care really is the least transparent thing we pay for. Not even taxes are this hard to trace."

Exactly. I honestly don't understand how even the most radical of the Obama hating, government hating free-market purists can defend our crooked, convoluted system of health care. It operates like no other system in the free market, with little or no transparency whatsoever. Unfortunately those who continue to support it have been spoiled by the good fortune of an employer sponsored health insurance plan or they are rich enough to be able to afford the exorbitant costs of a comprehensive plan. I don't wish ill of anyone but I do wish that those people would have to experience at some point what it's like for the tens of millions of Americans who cannot afford the high costs of health insurance or who have been denied for various reasons. Maybe then they could empathize and better understand how unfair our system is.

A healthy citizenry is vital to our country's overall wellbeing, both economically and socially, and it is vital to each individual's life, liberty, and pursuit of happiness. It should not be treated like just another widget sold on the free market for the main purpose of some CEOs or groups of shareholders to make a profit.

As far as Obamacare goes, I was glad to see it pass in the beginning, but I fear that it is not going to do anything to contain the costs. Too much power has still been left in the hands of the private insurance companies and they will undoubtedly jack up their rates even more to cover their added costs and to continue to see their profits increase. Universal health care, or Medicare-for-all, is the only way to go. Medicare has worked and worked very well for decades. It needs tweaking now, certainly, but its administrative costs are much lower than those of the private companies and the profit-factor is not the driving force, as it is with private companies. Only if Obamacare can somehow transition from its present state into single-payer or something like it will it have a chance of succeeding.

May 23, 2013 at 11 a.m.
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