How the C Gets More F-d

Great article in the New York Times about how medical billing varies from how much Medicare pays for procedures and how private insurance handles some outlandish cases:

High Fees Common in Medical Care, Survey Finds

Eye opener:

“But Dr. Robert M. Wah, a spokesman for the American Medical Association, says there is another side to the story — insurers’ low payments to doctors who enter into contracts with them and the doctors’ difficulties, in many cases, in getting paid at all. That is why, he said, doctors may simply abandon insurance plans. Then patients end up with extra fees because they have to go outside their networks to get the care they want.”

You would think doctors would be more vocal about billing and admin costs in dealing with private insurance companies as well as insurance companies dealing with what “out of network” means. Looks like another layer of gaming and private industry (both on the physicians side and the insurance companies side) run amok.

  • http://www.meowsk.com meowsk

    Having worked in a medical clinic for several years I think it is safe to say that doctors (in some cases) are weird, greedy, cheap-ass, little bitches.

    • mumoogaipan

      I do not think this comment adds to the conversation. I am not a regulator of this website, but ad-hominem attacks on doctors do not inform anyone nor broaden the scope of understanding concerning the conversation.

    • http://blurbomat.com blurb

      Maybe the more correct thing to say here might be “doctors I know” or “some doctors I know”…

      • http://www.meowsk.com meowsk

        Probably.

        I think I just have a lot of left over bitterness towards the medical industry. And all this healthcare reform talk just fuels the fire. I think in theory it could make things better but the reality is that I think it will just make the medical industry even more corrupt.

  • carpediem

    Hi Jon-

    I recently discovered Dooce, I’ve have been enjoying catching up on YEARS of posts and photos, and found your blog by proxy. You two are like frosted mini wheats, “the kid in me likes the frosted side…”, or maybe it’s more of a yin-yang thing. Either way, now that I have discovered blurbomat I can satisfy the politically-aware geek in me as well.

    I think it’s great that you give space to the important political topics of the day for which our right-wing, and unfortunately some democrats, are trying to distort the message; on today’s menu, healthcare. Bastards! I’m outraged, like every other thinking person regarding the topic of the health care legislation and their inability to get on board.

    Re: today’s post, my two cents. A job I held last year at a start up here in the Silicon Valley was for a private email company. They were trying to market their product in part to the medical industry, which loves to send private patient information around the open internet with GMail and the like, not so much a secure way to do things, but they do it. I learned a lot about the practices and costs of the VERY antiquated medical billing system, there is so much waste. The computer systems are at best circa 1990, and they rely very heavily on faxing things around, the cost is literally in the transport and processing of paper. It’s shocking how little is taken care of electronically. Anyhow, private insurance companies and the medical companies need a swift kick into the 21st century, and I’m really hoping that we end up with a public option that challenges these outdated institutions and practices.

    Blurb on, dude!

  • nobody

    You’re focusing on the insurers, Jon, but the article details some of the remarkable bills submitted to insurers by _doctors_.

    If I recall my analysis of health care billing from 20 years ago, these bills often reflect a number of add-ons to meet regulatory and legal obligations. For example, I think hospitals often have to tack on a set percentage to any bill to fund “uncompensated care”, which they are required by law to provide. They also allocate a portion of their administrative and staffing costs to a doctor performing services. The state often adds further taxes to fund more care for the needy. And the doctors also have to factor in items like malpractice insurance.

    These rates are further detached from reality by the fact that no one actually pays them. They are essentially a starting point for negotiation between the provider and the insurer, rather than any real reflection of the cost or value of the service provided.

    This sort of thing is exactly why consumer insulation from costs by the current, employer-based insurance model is so bad for cost controls. People don’t ever think about these costs, and rarely even see them, when making health care decisions, so no one scrutinizes thems, and providers have no incentive to make them reasonable.

    If consumers had a stake in these rates — set percentages, copays, deductibles — cost would become a more usual part of the service discussion. And that would pressure those costs to move to more intelligible levels.

    • mumoogaipan

      I think your analysis here is correct, the cost system for patients needs to be transparent. I hope that the healthcare legislation that passes will make this process a little bit more clear for consumers who have to purchase healthcare insurance.

      One of the biggest problems I have with the current healthcare system is that I can’t compare all the aspects of a healthcare provider against another healthcare provider. I can compare simple things like deductibles, co-pays, and monthly cost; however, unlike most products consumers can buy, important information such as what medical procedures are “experimental” or what costs will be accepted by the insurance company is not available unless I have an understanding of contract law.

      Here’s hoping that reform will allow us to make more informed decisions.

    • http://blurbomat.com blurb

      That was my point in linking; that the system is jacked across the board. You have patients who have no concept of what things cost, doctors and insurance companies playing expensive negotiating games and no true free market.

      I feel like the country is waking up from a bad dream and some of us have been awake longer than others. We’re past the scared and angry stage and want to fix it. Some are still waking up and as they wake up they shout things that don’t make a great deal of sense, but if they just waited a minute or two, took a deep breath and did a little research, the conversation might be more productive and we’d see a true reform.

      • nobody

        I guess we agree on something.

        But if more patient awareness of cost and billings would help, the Administration and Congressional proposals take us in the wrong direction. The “public option” isn’t going to have significant cost contributions or deductibles. The proposed regulations would limit patient contributions and deductibles. Billings would continue to reflect negotiating strategies among large institutions, rather than providers’ incentive to attractive users to valuable services.

        In a more transparent system, billing information would help drive out inefficient and low-quality providers — price-sensitive consumers would avoid them. And it would help reduce the duplicative tests and redundant care that the President talks about, as consumers would seek out providers who held down that sort of thing. Consumers would migrate to higher quality, more efficient providers, and investment capital would follow them. There would be a general effort to focus treatment on what’s necessary. And these benefits would occur with more more flexibility and accuracy than we’d get from some centrally controlled allocation bureau.

        The improvements woud take time, and they wouldn’t solve all the problem. We’d still need subsidies for the destitute. And we would still have problems of pre-existing conditions and the moral hazard of insurance. But if we had a more efficient and accurate costing system, we’d have a better starting point for addressing those problems.

  • Coyote

    Finding a physician who accepts Medicare is not an easy task, either. I’m eligible for Medicare, but can’t afford the premiums. And, in my state, if you’re eligible for Medicare, you can’t apply for the less expensive state insurance, which actually covers WAY more than Medicare. So, I’m another poor sap who’s uninsured, can’t afford the medical care I need, and living in fear of a major catastrophe. Everyone keeps saying, “You can just go to the emergency room,” as if it’s free to do so. Wake up, people! The hospital sends you a bill for ER services. A very BIG bill.

    I’m wondering what will happen to me when the new plan is implemented. Will I be screwed over again somehow because I’m eligible for Medicare? Or will I be allowed to choose something different? What if I can’t afford the new plan, either? Gah :-(

    • TheNephew

      Coyote I know how you feel. What is good to hear, and I imagine you are representative of other uninsured payers, is that you are conscientious of the burden you place on the system and yourself when you only visit the ER. Right now, the status quo healthcare plans have failed you. That is the result of privatized insurance, government failings, and everything else. I would encourage you, since you are already at the lowest of the low when it comes to coverage, to at least see what the Democrat’s healthcare proposal is like. If it stinks and is just another bureaucratic boondoggle, I’ll be the first to vote against the Democrats. But right now, your health, and millions of others in your exact situation, is too important. You can’t just stand by and do nothing, talk to your congressional representative, your senators, anyone and see if they can provide you with answers.

      I say its too early right now to say what is and isn’t going to be in the bill. However, there is a lot from the Democrats detailing what they want, and I think their goals are to essentially cover you.

      @nobody: I think the gist of what you are saying is right. Healthcare users are very insulated from the costs, and do not see how their decisions affect everyone else. Thus, there are many individuals who will wait to see a doctor, myself included, letting small problems denigrate into catastrophic problems. This exists for those who are not ensured (because they are in the same boat as people like Coyote) and for people who are afraid to see doctors (me, even though my dad is in fact a doctor).

      People do need to be aware of their strain on the overall healthcare net, and I think government care might help make that clear. (if there is one thing, Government likes lots of records about where its money is going).

  • frogburger

    I’m laughing hard

    “if there is one thing, Government likes lots of records about where its money is going”

    Like the bailout money from Bush that went overseas and nobody knows where.

    Again you’re really in la-la-land.

    • TheNephew

      Well you can laugh all you want, I have no idea what you are referencing. But you yourself say that bureaucracy is a huge part of this bill, I imagine some of that goes towards tracking where money is going.

      And, pointing out a critical flaw of the Bush administration doesn’t really strengthen any argument made here, we are talking about healthcare, not Bush’s bailout, so you’re point about misappropriation is non sequitor.

  • http://www.flickr.com/photos/minxlj minxlj

    I found this interesting (although let it be known, we are far from idolising the NHS here in Britain, it has its problems and flaws but by and large we feel lucky that we have a system benefitting the needy that we can access whenever we require it)

    “Web users have rushed to defend the NHS after critics of Barack Obama’s health reforms branded British hospitals ‘evil’” – http://tiny.cc/UK_NHs