The Great Healthcare Scam, Ctd

Mar 3 2013 @ 7:54pm

ER Visits

A recent study in PLOS ONE supports Steve Brill’s alarming conclusions about healthcare prices. Lindsay Abrams summarizes:

 The median ER visit costs 40 percent more than what the average American pays in monthly rent. But the discrepancy in ER charges is so great, according to the study’s authors, that patients have no way of knowing how much they can expect to be billed. The average cost of a visit to the ER for over 8,000 patients across the U.S. was $2,168. But the interquartile range (IQR), which represents the difference between the 25th and 75th percentile of charges, was $1,957 — meaning many patients were paying a lot more or a lot less than that.

An ER doc in the comments section objects:

These prices sound so arbitrary, like it’s just some crap shoot of what you’ll get depending on what the doc feels like billing that day, but there is a lot more to the system than the article would lead one to believe. Kidney stones are a prefect example. The diagnosis “kidney stone”, covers a wide spectrum of patients. The work up for a 20 year old that has a known history of stones, who comes complaining of his typical pain, and is there simply for pain relief is worlds different than a 60 yr old that has totally new onset of symptoms, yet they’d both be lumped together in this study. The 1st may get out of the ED with nothing more than a simple urine dip for blood and some pain meds, while for the later, anything less than a contrasted CT for a possible leaking abdominal aneurysm would be malpractice.

Meanwhile, Uwe E. Reinhardt proposes one way to limit healthcare pricing unfairness:

Mr. Brill once again illustrates why dubious policies such as he describes can persist. He offers a bewildering potpourri of little tweaks here and there, including huge taxes on the salaries of hospital executives and hospital profits, capping profits on lab services, changes in patent laws and, of course, the eternal stalwart, malpractice reforms. That is a scattershot response to the central problem he lays bare: the pricing of hospital services in general and to uninsured middle-class people in particular.

Here is a simpler approach. Why not make it illegal for hospitals to charge uninsured people more than X percent of what Medicare pays for a procedure? That maximum price would certainly cover the true incremental cost of serving uninsured middle-class people, with handsome contribution margins to overhead and, most probably, to profits as well.