We previously discussed the ridiculous and dishonest health care system with hospitals charge absurd amounts in a system designed for padded and dishonest billing. The latest example comes from a family on vacation to San Francisco who took their two-year-old son into the emergency room of Zuckerberg San Francisco General Hospital after he hit his head. After a brief check up, Jeong-whan was cleared by doctors and, after a brief nap, he was released. The family was hit two years later with an $18,000 bill.
The family said that they simply took the boy into the ER because he was inconsolable. However, doctors found no injury and he fell asleep in the arms of his mother. Two years later, they were charged for a the 3 hour and 22 minute visit, including a charge of $15,666 for something called “trauma activation” or “a trauma response fee.”
Hospitals tack on a trauma fee as payment for assembling a team to deal with a patient.
Vox has an excellent article on this case.
As discussed earlier, my family had a similar experience when my son Benjamin had a concussion from playing college sports. He was asked to fill out a form once every couple days on his condition and drop it off at the doctor’s office. He never saw a doctor, but we received a bill for thousands, including repeated charges $350 for visits with doctors who never met him. He was never hospitalized or taken to the emergency room. He was never given any medication. Yet we were charged many thousands of dollars. It took my wife literally dozens of calls before she was told that the school insurance would cover the costs. Again, the overcharging by the doctor who never met Ben was never addressed.
However, this is nothing new. It is part of a medical system where ridiculously inflated bills are the norm. After all of the promised “reforms,” little has changed in this inherently dishonest system of overcharging and holdouts for consumers. Some, particularly elderly patients, simply pay while the rest of us have to spend hours getting the companies to honor their policies. I have spoken with many doctors who are appalled by the system. Yet, Congress continues to receive millions from health care companies and has repeatedly failed to address this corrupt and abusive system.
My daughter was born in 1978. We( me and my wife) did not have insurance. We were lucky that there were no complications. We got an invoice from the hospital. One baby, $975.00. I wonder what it would be today?
I tend to speak in simple terms. But it looks to me that the insurance companies have possisioned themselves in between the patient and their health care professional.
A fun fact when calculating the reason for medical costs.. A family practitioner pays more for auto insurance than malpractice insurance. Specialists are higher but not crazy high.
Malpractice insurance varies by state, location, and specialty. In some areas the price of insurance went so high that most of the physicians went bare. The hospitals in some of these areas had to drop the bylaws stating that the physicians had to carry malpractice insurance.
https://youtu.be/IahkqlaqyT0?t=47m45s
Michael, I am not sure about today’s malpractice rates in every community but I think this guy is blowing a lot of wind. You can believe him if you wish but if I were you I would check a little further.
A quick search provided http://epmonthly.com/article/the-medical-malpractice-rundown-a-state-by-state-report-card/ Look at #8 “The average malpractice premium in Minnesota is estimated at $8,500 while the average premium in Florida is estimated at $79,000! Why such an astronomical difference? Do Florida doctors make more mistakes than those in Minnesota? Of course not…..”
You have to further break it down by specialty. Family practice is the lowest. OB/GYN is near the top. Rates are going down. I pay a lot less now than 10 years ago
Yes, Michael, I said in my first reply that you had to break it down by “state, location, and specialty”. Different states have different laws regarding malpractice. If the state has caps in the hundreds of thousands of dollars they will have lower premiums than in states where suits are in the millions.
I know about 10 – 20 years ago the crisis became so bad physicians went bare in certain areas of the country. Anecdotally a gyn doc told me in his community the gyn docs went bare and malpractice claims fell. That makes perfect sense since the insurer had bigger pockets than the docs especially when the assets were transferred to their wives.
Managed care has been a big driver in malpractice insurance costs as they require higher coverage from their providers. The Lawyers smelled blood
I don’t know how much of a driver it was but I am sure it caused rates to rise. Managed Care was incentivizing physicians to do things they would never have done outside of Managed Care. Managed Care frequently created terrible incentives and I believe we are facing the results of those incentives and hating it.
This past week I found a hospital bill from when I had open knee surgery back in 1974. I was in the hospital for three days and the total bill was $524. The only other charge was from the surgeon. Those were far simpler times. I had the same knee replaced in 2012 and the bills totaled $75K.
94 Corvette,..
It is interesting and instructive to look back at health care cists when they were a fraction of what they are today.
The explosion in health care inflation started shortly after MediCare and MediCaid began.
While it’s not possible to absolutely prove cause and effect, I don’t think it’s a coincidence.
I remember that same time period you mention on your comment.
At about the same time, I had two major surgeries when I was a in college. Was in the hospital for a total of 38 days, with ICU care, numerous specialists, etc.– probably the best care medicine had to offer at the time.
The total bill was right at $12,000 for everything, hospital and doctor bills.
Overall inflation since that period…c.1973….has gone up about 500%.
So it takes about $6 today to “keep pace” with what a dollar would buy in 1973.
In previous generations, health care costs were more in line with the overall rate of inflation.
Had that pattern continued, that same $12,000 health care cost in 1973 would be c.$72,000 today.
It would be interesting to see what that same hospitalization and surgeries would cost today.
I’ll take a guess and put it at $350,000 to $400,000.
Someone with a recent comparable experience would have a better idea; fortunately, I never had another year like that one, so my number is merely guesswork.
There are so many “moving parts/ causes” to the explosion in health care costs in the past 45-50 years that there is no “easy fix”.
There’s not a single culprit/ factor that caused this situation, and a lot of different opinions as to how much each factor contributed to the situation today.
It looks to me like it’ll be “more of the same” down the rode, but the rate of health care cost inflation seems to have slowed down some over the past few years.
Not matching the overall CPI, but closer to the overall inflation rate.
Hospitals have codes for everything. If the wrong code is entered it could cost you thousands. If you are on Medicare you may never see an itemized bill, unless you ask. We’ve become lazy about verifying what Medicare actually pays. And Medicare is lazy. I called to say my mother had received a check from Medicare for services of a doctor in a different state. She had never seen this doctor. They told me to tear up the check. What about the doctor’s check? They didn’t seem to care. I tore up her check. I don’t think the doctor was even notified. Prior to Medicare I was covered by my company’s insurance and had to verify the hospital’s charges. There were billing codes that had nothing to do with me. When I requested more info about a charge and questioned ever having that service they credited my insurance company. Now you have to pay a fee to get an itemized bill. The fee for that goes up every year.
Wow, dishonest? ridiculous? absurd? how’s THAT for objective discourse…..
In response I can only say, HOLY PHUCK BATMAN!!!!!!!! You should see my lawyers bill…it makes my medical bills look like twinkie time. The entire fiscal system in the USA is broken. We can thank LAWYERS. They have written the laws, made the cases, sat behind every desk that grew this parasitic “Capitalistic” system to fruition. The problem is it isn’t capitalism. It isn’t even legal or ethical, it isn’t anything other than a gang of finger pointing Trumpists wanting to control the money flow right into thier own pockets and blaming someone else for the reality of the damage that it has done to the infrastructure and citizenry of this Country. Shakespeare had it right.
To most people insurance is a complex issue and they don’t really feel comfortable reading the fine print. The market for health insurance should be made more competitive. And when any healthcare legislation is being considered the insurance companies should not be sitting at the table with the legislators that are making our laws.
“when any healthcare legislation is being considered the insurance companies should not be sitting at the table with the legislators that are making our laws.”
Not only are they making the laws and rules but they are removing our rights to contract individually so that we have little say and are forced to take what is given.
Allan,…
Your 20% number for the doctor portion of overall health care spending is correct.
I thought it was over 30%, nearer to the same range as the hospitalization portion of the c.$3.5 Trillion in annual health care spending.
Thanks for the correction.
I Bob,
I was hospitalized for a couple of days about 15 years ago.
Extra cortizone and knowledgeable doctors pulled me out of a pretty serious situation.
I had decent insurance, and tried to piece together the overall picture of what the charges were, what the “allowed charges” were under my insurance, what remainder I actually owed.
(Over the years, it has become common for different entities to sent seperate bills.
Instead of getting a bill from the hospital and a physician’s group, you might have billing from 5-10 different sources).
I was almost expecting a seperate set of bills from the janitor, one from building maintainance, etc.😯.
The hospital itself was the major souce/ amount in the billing….I think I got 3-4 from them, counting ER, Intensive Care, a ride in an elevator😊, etc.
I’m not a rookie when it comes to figuring out billing, with medical bills or other billing.
But I had a Byzantine maze to navigate, involving in-person visits to the billing department at the hospital, and elsewhere.
I thought everything was resolved (paid).
But I got a call from the hospital 3-4 months after I thought all the bases had been covered.
I was told that I still owed x-amount…I think it was $300-400…and that to avoid it going to a collection agency, I needed to pay it.
I asked her what it for for…she didn’t have that information.
I asked her to fax me the total amount billed, the amount the insurer paid, and the amount I paid, and how we ended up with a further amount owed.
She wasn’t sure if she could get all of that information.
Given that she was in the billing dept., I guess I had an expectation that she had, or could get, that info.
I think I finally got ahold of someone who more or less figured out the “formula” , or the “encryption”, in the billing mess.
It looked like it was probably legit, so I paid it.
There is no way that “stragglers”, like this particular billing should pop out of the blue 8-10 months after treatment.
And sometimes the people in billing are as confused as the one getting the bill.
That situation seems to have gotten progressively worse over the years.
Medical Monopoly Capitalism.
A friend of mine is an optician. He sells Rx eyeglasses. There are a lot of insurances involved in Rx eyeglasses now. One day a customer came into the store where my friend worked. The customer told him that he had a certain eyeglass insurance plan. So my friend asked him how much he paid for this plan. The customer said $6.00 a week( out of paycheck). Then added that he only got one set every 2 years. $6.00 x 104 weeks equals $624.00. On top of that there is a copay when the eyewear is purchased. My friend proceeded to tell the customer that if he just wanted to walk in and pay for the set he wanted they would have just cost him $325.00 out of pocket. Most of us are not very savy when it comes to insurance. I do believe that the insurance industry does take advantage of us.
Eyeglasses are not the sort of expenditure for which risk-pooling services are a solution.
Risk pooling does not save money. In fact, it costs a lot of money so risk pooling should be used only for unexpected and unpredictable events that might be difficult to pay for.
Sounds like a racket, Bob.