[pchivers]

It's worth noting that there is no relationship between a U.S. hospital bill and the actual cost of the service:

http://truecostofhealthcare.org/hospital_billing

"Hospitals see no problem in sending bills to insurance companies for five to ten times the amount that they actually expect, because they are simply playing the game that the insurance companies fashioned. But remember, they only produce one kind of bill, and it’s designed to send to someone who holds all the cards (an insurance company), and so can just refuse to pay anything they don’t want to pay. That’s their game. But what happens when you have to play the game with the hospital alone (if you don’t have insurance, or if your insurance doesn’t cover that stay for some reason). Then you’re on the hook for the ENTIRE amount. Most hospitals have a policy that allows people to negotiate for a lower amount, but most people don’t know this. And don’t expect the hospital to tell you about it, let alone help out. So even if you can remember to negotiate while you’re convalescing from a long hospital stay, good luck trying to get the deal the insurance company gets.

For the average person, this is no small matter. In the first case, a two day hospitalization that the insurance company got for $2,100 (after the insurance adjustment), would cost an uninsured person over $21,000. The adjusted charge ($2,100) would be a pretty nasty kick in the finances for most families, but they could bounce back. The unadjusted charge, which is what you’ll get if you don’t have insurance, is an almost certain trip to bankruptcy."

[JPKab]

I don't blame you for it, since it's long, but I don't think you read the entire article, let alone the second page. I also don't think you actually understand how hospitals bill insurance companies. I'm not saying insurance companies are great: they are not. But their profit margins are substantially smaller than these "non-profit" hospitals featured in the article. Hospitals don't send a high bill to an insurance company, and then play a game of who pays what. All the rates are pre-negotiated. The second page clearly states that insurance companies, when they pre-negotiate, want to do so from the Medicare price as a starting point. Hospitals want to do so from their exorbitantly inflated "chargemaster" central pricing table. As hospitals and clinics have consolidated, they have increased their leverage over insurers so that they can force the insurers to pay far more than they used to.

[kamaal]

>>But their profit margins are substantially smaller than these "non-profit" hospitals featured in the article.

Every time you hear non-profit anything, run from it like you run for your life.

These days a non-profit organization means, the organizations gets to make no profit but the people who run it, take the profit on the organization's behalf.

[anigbrowl]

a two day hospitalization that the insurance company got for $2,100 (after the insurance adjustment), would cost an uninsured person over $21,000

Pooh, I ran up a bill of close to that size in only 12 hours without any serious injuries :-/ In fairness the hospital did tell me about their discount policy and cut it down by about half, but it was still kind of a ripoff.

Of course it seemed as if every doctor in the place took it upon themselves to have a quick chat with me, and then billed me for the privilege afterwards. I got copies of all the hospital records afterwards and the amount of duplication was ridiculous, not to mention dangerous; there's so much paperwork floating about that my discharge nurse initially gave me the paperwork for a patient in the adjoining room.

I think this is pretty unethical, really; ostensibly they're all there to help (and understandably want to to be able to defend themselves for accusations of poor medical care) but as I was recovering from a near-fatal accident the last thing I wanted was some new person coming around every 45 minutes to ask me the same questions afresh, when I had neither the energy nor the initiative to refuse.

[purplelobster]

From my experience, the weirdest thing is that you're rarely informed about something having a cost. It can be something as simple as a one minute chat that later shows up on the bill as a separate item. Not only that, but every time I've tried to ask what something costs, I can never ever get a straight answer out of them, I'll just have to find out when I get the bill and pray it's not too much. It's insanity.

[chris_mahan]

There should be a requirement that doctors post all prices like car mechanics.

[epoxyhockey]

Mechanics post prices? The only reliable way I've found to determine the real cost of car repair is to comparison shop and look online in enthusiast forums. Even then, there is still room for haggling.

[chris_mahan]

Not only do they post prices, they will write an estimate and you have to sign it in order for them to begin work, and they can't exceed estimated costs without your approval. (In California)

[mgkimsal]

My wife was in the ER a couple years ago - I asked multiple people (two nurses and a doctor) how much any of this would cost, and they all said "I don't know".

[guymcgwire]

My wife was also in the ER a couple of years ago. She was there for about nine hours. At one point the attending came by and spoke with us for less than a minute. He basically repeated what the nurses and PAs had been telling us for the past few hours. But he clearly wasn't paying attention to the case because his summary was clumsy and lacking in detail. It was no more helpful than what I was reading on Web MD on my iPhone. My wife's exact words when he left the room were, "That was weird." Later, when we looked through the bill from the ordeal, it turned out that this awkward, uninformative, 45-second interaction was billed at almost $1000. If he had told us ahead of time that his unnecessary analysis was going to cost $1000 (even if it was paid by insurance) I would have thrown a shoe at him and told him to get lost. Healthcare is not a marketplace.

[kamaal]

>>It was no more helpful than what I was reading on Web MD on my iPhone.

This kind of thing is what makes automation in the medical industry ripe for disruption. In fact close 80% of the information any doctor can give you in case of first 2-3 visits is what you would get by doing simple google search or reading WebMD or even looking up the Merck's manual.

Unless you have serious problem, automation can solve most of the problems people have.

>> If he had told us ahead of time that his unnecessary analysis was going to cost $1000 (even if it was paid by insurance) I would have thrown a shoe at him and told him to get lost. Healthcare is not a marketplace.

Exactly why we need automation. A while back CA's were considered accounting and auditing geniuses. Most of them are out of job today as accounting software got more automation and intelligence.

Wait till the time when most doctors go out of job as software automation sweeps health care industry.

[roc]

The sad part is that they usually truly don't.

Because not only do hospitals have largely-fictional rates they try to pass to insurers, there are also the medicare rates, the medicaid rates, the rates they pass to those trying to pay out-of-pocket, the rates for the generic equivalent they'll switch to after you agree to a drug/procedure due to your coverage, the discounted rates they pass to people who will almost certainly let the bill go to collections if it isn't heavily discounted, etc.

[kamaal]

What's surprising in all this is, do they actually keep track if a doctor passing by had a quick 2 minute chat?

How do you go about it? You go and tell the billing department- "I talked with patient X for 2 minutes" and then Y, Z , A, B so bill it? If you talked to something like 100 people how do you keep track of it?

Sounds like an extremely cheap way of ripping off people.

If only I could bill my company that way every time some comes to ask me a question or needs my help or a code review or whatever!!!

[rdl]

That's what the EHR is for.

[gbhn]

Hospital billing is an outrage, just like the article claims. This corresponds to what the NPR report on the topic concluded: chargemaster rates are absolute fiction, invented to offer insurance company negotiators good deals, and utterly unrelated to costs.

Unfortunately, they do relate to actual costs for those most unable to bear them -- primarily uninsured middle and lower middle class people who face these ludicrous bills at face value and too often have their financial lives severely encumbered by them. The article does a great job of illustrating this.

[wybo]

I think this whole system of differentiated / > 150% profit margin billing - when people are at their weakest, a.k.a. exploitation-based healthcare - is utterly unethical.

I honestly don't see how anyone, and American public opinion in particular, can accept that such things are happening in their country.

In any other setting such billing practices would clearly be considered criminal / outrageous. Say if a surf-instructor at the end of the day charged you $80 for his sun lotion, or if lawyers you had not signed up with started offering you advice, and charged for it at a rate only known to you after the fact. And they would be swindling you when you would not be in dire need...

How can parents still be proud when their children become medical professionals in the US? Why do people still donate money to 'non-profit' hospitals?

Healthcare, the market, and decency don't mix. At least I'm happy to live in the UK where healthcare works (a lot better). The market is great, but one has to pick the right tool for each job, and the market not always is.

[anigbrowl]

Not only are the prices outrageous and the process confusing even if you do have insurance, but patients are burdened with an absurd amount of unfriendly administration, in which all expenses are coded and the people you call up on the phone are little better at understanding these codes [1]. Now, those codes have some utility to medical bureaucrats, but because the healthcare system in the US is so unresponsive to people's needs the billing may as well be in a foreign language.

I used to live in the UK, and I really, really miss being able to go to the doctor and only having to worry about the medical advice you got, instead of trying to decipher pages of obscurantist documentation for your visit.

1. An example of (part of) the new system: http://en.wikipedia.org/wiki/ICD-10_Procedure_Coding_System The full ICD includes specific codes for things like being bitten by a turtle, sustaining a fall in an opera house, or 3 different situtions involving collisions with a lamppost.

[wwosik]

$21k for 2 days in the hospital? Are the beds made of gold? To me it sound totally outrageous. I'm going to have an ACL operation in a very good European hospital, paying out of my pocket and the estimate is running at 4k EUR (say $5.5k) for the operation and one day in the hospital. I understand health costs can be unbounded, but it exceeds all reason.

[DenisM]

The beds may not be gold, but the hearts are made of stone.

[barking]

It's worth noting that there is no relationship between a U.S. hospital bill and the actual cost of the service

If this is true (and I don't know that it is) then it sounds to me that the free market is not working in this area in the USA.

If it's not working then that may be because of supply restrictions because of limited numbers of places and/or high costs at medical schools and excessive restrictions on foreign trained medical professionals entering the US.

On the other hand becoming a doctor requires a high degreee of intelligence, high tuition fees and years of long hours as a junior at low pay while you continue to study and do further exams. When you finally get to the promised land you have large debts and a relatively short career ahead of you. You also have rare skills and are a person who has delayed gratification to an extent that few others would be prepared to. You are also in a highly responsible job and are likely to be subjected several stressful lawsuits during your career.

In a society where no limit seems to be placed on the earnings of sports stars and others in their early twenties, why should doctors be expected to restrict themselves to less than their market can bear?

[dietrichepp]

I don't see how a correctly-working free market would lead to a different situation here. The market is necessarily inefficient:

1. Consumers don't have the skills required to estimate the value of medical care.

2. Consumers don't have the time to negotiate prices: if you're dying, you can't wait.

The question here is not doctor's salaries, that's a red herring. The question is why someone without insurance pays so much more than someone with insurance, if the care received is the same. It's because the insurance companies have the time and skills to negotiate prices, and individual consumers are under duress. It's the same reason that workers in unions earn better wages -- although the numbers are different: Wikipedia puts the gap between union and non-union wages at 21-32% in the US, and the gap between the cost of insured and non-insured care is much higher.

I say we have a moral duty to replace the current, broken, free-market system. Evidence from countries other than the US supports the theory that socialized health-care can be more efficient.

[droidist2]

It's true the free market isn't functioning in healthcare. You mentioned doctor supply. During the late 1990s the American Medical Association convinced the government there was going to be a "doctor glut" so the American taxpayer subsidized medical schools in exchange for not graduating doctors, $100,000 for each doctor not trained.

[NoPiece]

You give a good example but it is worth clarifying that more than it being a non-functioning free market, it is absolutely not even close to being a free market. The Federal government is the biggest spender in the market, and with that comes a mountain of regulation and price controls. The states are probably the second biggest players in the market. Even things that almost everyone would agree with make it a less free market, like licensing doctors, certifying medical schools, and approving drugs. I think you could make the case that either a much freer market, or a completely state controlled system would lead to lower costs. The current situation reminds me of the pseudo deregulation of power in California that ended in catastrophe.

[plaguuuuuu]

>In a society where no limit seems to be placed on the earnings of sports stars and others in their early twenties, why should doctors be expected to restrict themselves to less than their market can bear?

Because setting a price for maximum profitability means that whoever can't afford medical treatment dies

People not dying is probably more important than profit/free market/ensuring people can buy mercs or giant yachts or whatever, socially/politically/morally speaking. though if your opinion differs and you have a good argument for it, I'm happy to hear it.

[coldtea]

>If this is true (and I don't know that it is) then it sounds to me that the free market is not working in this area in the USA.

There is no "free market". That's a 19th century superstition. For example, if something as basic as the price you pay for oil is determined by the wars your country fights then there's no free market. If your government prints inflated money at will. No free market. If the banking sector gets a 1 trillion dollar bailout. No free market. If a company or a lobby can buy several senators. No free market. If there is copyright and intellectual property rights. No free market. If your country can force others via military and diplomatic might to enforce favorable trade agreements. No free market. Heck, even if recreational drugs are illegal: no free market.

And even if it was, it wouldn't be working in this area. When you're dying you don't negotiate prices.