by Patrick Appel
A reader writes:
For a few months, I worked at an electronic medical billing company. I was astounded at how complicated and convoluted medical billing is, and this is ultimately why we need to have significant health insurance reform. What happens is a doctor's office will decide on a price for a procedure – for instance, a checkup typically costs around $180. Say I have Tufts. They might pay out $100 for a checkup – the rest the doctor writes off. Why not just charge $100 and not have to write off $80? Well, that's because other insurance companies – say Blue Cross and AETNA – might pay $120 and $150 respectively. So it make sense for doctors to charge significantly more than they would expect from most insurance companies. However, if somebody doesn't have good insurance or has no insurance, they are billed for the full amount -$180, even though the doctors office might expect to write off up to $80 dollars of that charge from somebody with good insurance. Given that the majority of the people without health insurance are lower income, this can cause crippling financial problems, or result in a denial of service. And why? Is someone with insurance "better" than somebody without? Are they more deserving of good health because they happened to not get laid off during a particular bad recession?
The problem with predicting medical expenses is that, even though you can find the codes (they're called CPT codes and you can find them here) you would have to get the price from the doctors' billing coders, which they would probably be loathe to give out- how can we expect the market to work when the consumers don't get to know the price BEFORE consuming? And the reader didn't include that if you get an ultrasound, you're billed for the ultrasound and the use of the ultrasound machine. If you have the time to sit down and do the research, it would be nearly impossible for the average person to make an accurate decision about the most cost effective doctor to have. Imagine trying to make that decision in a panic.