A reader writes:
Josh Barro is exactly right. Take electrophysiology, for example. When you get a pacemaker put in, you never learn the price of the device itself, or the other itemized costs of the procedure. You just get a bill (or your insurer gets a bill) for the total cost.
Several years ago, I was among a team of big-firm lawyers representing a healthcare consulting company that worked with hospitals on their negotiations with medical device manufacturers. The manufacturers all require their hospital customers to sign confidentiality agreements in order to keep the pricing of the devices secret. One of the bigger device makers at the time sued my client for allegedly taking the pricing it learned from one hospital client to others so they could adequately negotiate with the manufacturer. It was a slam-dunk win for the device manufacturer, and my former client is no longer in business.
Hate to say it (as a liberal Democrat), but Newt Gingrich of all people has been out in front trying to prevent this lack of transparency since at least 2006.
Another writes:
I'm thrilled to see you linking to the NRO post on this issue.
My employer went to a "high-deductible" plan a few years ago and I've hated it for this very reason. First of all, there's very little "portability" in medical treatment – who wants to go to one doctor for a knee injury, then go to another for strep throat, and yet another for chronic headaches? Secondly, just as Barro notes, you have no idea what any treatment is going to cost you until you leave the office. The same goes for any prescriptions you may get. There may be five different medications that treat whatever ails you – not counting any generic versions of each – and the doctor's not going to give you a menu to choose your medication from.
These high-deductible plans exist for one reason – someone calculated that an average employee spends $2300 a year on medical treatment, and based on that, they set a deductible of $2500. I hate it, but I have to be OK with the system because that's all that's available to me. I'd rather my employer add the money they're paying in premiums for me back to my paycheck and be "taxed" $5000 a year for single-payer plan coverage.
Also, I had to laugh at Barro saying that "we could legally obligate hospitals and medical practices to disclose their full price lists." Imposing harsh new regulations on the medical industry? Is this the same National Review than the one I'm familiar with??
Another:
Boy oh boy do I have an example for you. Last December I woke up with chest pains. I am almost 50 and have had two brothers die before the age of 50 due to heart-related issues (high blood pressure and a botched bypass operation), so I drove myself to the emergency room. It was around 3:00 AM when I walked into the Emergency entrance, checked in to Emergency, and was taken away by Emergency personnel. After a couple of tests I was taken to a curtained-off bed in Emergency. I stayed there in that bed for the next 12 hours, leaving only to be wheeled away for additional tests. Fortunately, it was not heart related. I checked out of Emergency and paid the clerk at the Emergency checkout the $150 co-pay the clerk stated my insurance required for Emergency care. (Please note the excessive references to Emergency – it comes into play … or at least I believe it should.)
Two weeks later, I get a bill for $1,300+ from the hospital for my "Emergency" care. Even though I checked into Emergency, remained in Emergency unless wheeled away for testing, checked out of Emergency while paying the $150 co-pay the Emergency checkout desk requested, I was billed for outpatient services. At no time during my stay did any doctor or nurse ever tell me that I was being treated as an outpatient. In fact, the doctor that spent the most time with me stated explicitly "we won't need to keep you for observation." (By the way, my insurance has a $1,500 deductible on outpatient services …)
I've gone back and forth with their billing office numerous times in the past year, trying to get them to code the services appropriately as Emergency care. My insurance company has told me that they will pay the amount owed if it is billed as Emergency services. However, the hospital simply replies that it was outpatient service.
Since then, I have visited an Emergency room at a different hospital due to a late-night attack by a kidney stone. I checked into Emergency, was treated by Emergency for almost six hours, and left the Emergency room paying my $150 Emergency co-pay. The amazing thing is, the second hospital seems to actually believe I had Emergency services, and has been content with my payment. Imagine.
One more:
I am a pediatric subspecialist at a major academic medical center in New York City. Many times, patients call to find out the costs of procedures if we are outside of their network. As ridiculous as it sounds, we are universally unable to tell them. The prices are so opaque that no one at my institution will admit to being able to produce them.
For example, a pulmonary function test (really a group of tests) will involve a physician's fee and a technical fee. The MD fee is generated from my practice and I have a list of fees that most patients are charged (though their insurances all pay different rates if they have insurance). The hospital owns the technical fee. A colleague of mine once spent three months trying to get an answer to the question of what the price is for a group of tests for a research grant she was planning. No one could or would tell her. Our practice manager acknowledges that this is a problem but can't access it. Apparently many patients are charged different fees but no one seems to be able to know what they are.
The patient's don't believe it when we tell them we don't know. Certainly any other business or service can tell you their fees. With us you have to be billed to find out how much it will cost you.
The Dish 