Six months after trying to schedule a checkup (what they used to call an “annual physical”) with my primary care doctor, it finally happened at the end of March. Today’s mail brought a bill from the doctor’s office. I don’t think that this includes the lab tests that were done; these were handled at a separate facility where I filled out about 5 pages of forms, including insurance information.
The original bill was $510 and that’s what I would have had to pay without insurance. The $510 bill was submitted to the insurer/HMO on 4/1/2010. On 4/27/2010, there was a “disallowed adjustment” from the insurer/HMO of $416.97 and a “risk WH adjustment” of $9.75. The insurer/HMO actually paid $68.28 of the $510. My copayment somehow worked out to $15 and I was sent a paper bill for this amount, about a month after the visit.
So… in terms of the real economy, this was an $83 transaction, equivalent to what you might spend on dinner for two. But instead of being paid with a credit card swipe, there were apparently multiple clerks involved at the doctor’s office and the insurer. Negotiations happened behind the scenes. A paper invoice was printed and put into an envelope by hand. A check was mailed through the U.S. mail (perhaps it is our health care system that is keeping the Post Office alive).
I have a similar deal with allergy injections: takes less than a minute with a nurse, “sticker price” is $32.00, negotiated rate is about $18, all of which I now pay out of pocket since my copay is $20. So the insurance company doesn’t pay a dime, but I really need the cartel membership for the discount.
Especially given that health insurance is almost a monopoly in most states, can anyone make a case that your 600% markup for not belonging to the insurance cartel is ethical? I mean, I have a tiny bit of sympathy for the libertarian view that not everybody gets what they want and sometimes people have to die, but even if healthcare is more like any other consumer good rather than a human right, I can think of few other examples of such egregious cartel-based price discrimination. My supermarket loyalty card is a) free and b) results in much smaller discounts (i.e., the nondiscounted prices are affordable).
This sort of thing prevents people with preexisting conditions from starting or joining small businesses.
Ha. I had a similar experience a few weeks ago, which prompted me to do a bunch of research and thinking on this. I’m writing a series of articles on healthcare on my blog now. Perhaps you or some of your readers will find it interesting.
So glad we don’t have to worry about this kind of thing in Australia. The system here has recently been modernised so you can have your insurance (Government and/or Private) payment paid directly into your bank account when you pay the Practitioner using a special credit card terminal in their practice. This whole process takes around 30 seconds. Payment reaches the patient’s account electronically within two to three working days. The Doctor also benefits as they receive their payment from the Government in a similar timeframe, with no paperwork involved. Although if you go to a Doctor who only charges what the Government will pay them for a consultation (quite a few do, especially those who treat the elderly and students, but less than in times gone by), then there is no charge to the patient at all.
Every time this comes up, I feel it’s necessary to mention why this happens.
If the doctor had asked for $83 for the visit, the insurance company would have paid much less. As a huge bureaucracy, it’s impossible to calculate the actual value of a service, but they can always make sure to negotiate their pound of flesh off list price.
And further, the doctor cannot bill the insurance company for $510 (so that they actually get paid $83) while billing uninsured customers $83. Governments call that “insurance fraud.”
This is the natural consequence of a system where large bureaucracies pay for millions of routine transactions. If we asked insurance companies to pay for our groceries, we would see the same sort of madness.
My employer recently switched from a very traditional PPO plan that required lots of back-and-forth claims/bills paperwork, to a plan where we carry around the equivalent of a debit card (Choice Care Card) that has been tied to a funded HRA by our employer. Though we don’t start on the plan until next month, I can tell you that this plan allows our employer to reduce our monthly premiums while fully funding our @2K deductible in the HRA. I can’t say yet why the plan is so much cheaper, but the overall workflow of payment and reimbursement seems much simpler and more modern.
You should see the bureaucracy involved in getting the free government sponsored flu shots for kids. First we got paperwork at home from the school. We filled name, address, age, allergies, requested time, etc. We got sent back a confirmation when to go. Then a reminder. Once there we had to wait on 4 separate lines and fill more paperwork all in all taking over an hour for simple .5 second nose spray that could be administered by anyone. The dosage was preset, the syringes disposable – once person should be able to do the whole school in less than a day. Instead we got to drive there, fill multiple papers and so it takes 6 people to do it full time. And that is not counting school administrators, teachers, parents and all who are all involved in the paperwork distribution.
As we can see, this is a common experience. Anyone who has had an encounter with our health system has similar stories.
The question is “why?”
I think the answer is that there is so much money in the system that no one who lives off the system has an incentive to change.
Not only are users of the system wed to third party payments, but so are the providers. I asked an office manager if I could pay cash, and she looked at me like I was from Mars. She proceeded to tell me that if they allowed that, a federal law would be broken. There was no need to go further.
I have a “gold-plated” health care account where everything is paid by my large employer, including experimental treatments and all prescriptions.
It’s very interesting going in for routine medical visits and dental appointments: as an employee of this company, I receive services that aren’t typically offered to other insured patients.
For instance, my dental check-up as an adult includes a fluoride treatment… something that is not useful for adults. My company pays the $34 negotiated fee for this.
When asking why it is necessary, I was told bluntly “adults do not require the treatment, but your company / insurance pays for this so we always require it unless you have a specific reason not to receive the service.”
Wild, makes no sense.
I especially like the exotic vaccines and shots required for travel to some third world countries… billing price over $300, actual price of $3.
What this demonstrates, besides how messed up the billing system is, is how the uninsured are screwed. A person without an insurance company to fight for them would be expected to pay the full $510, have a blemish on their credit rating, or most commonly, forgo a physical and wait until something lands them in the emergency room or morgue.
I don’t know how people on here feel about NPR, but This American Life produced a very enlightening two hours that touch on the complex relationships between patients, doctors, insurance companies, hospitals and pharmaceutical manufacturers. Going into listening to these on a road trip, I thought it was all those lousy, greedy insurance companies that drove most of the problems. Turns out, I was way wrong. WELL worth the listen if you can (two episodes, “More is Less” being the first):
http://www.thisamericanlife.org/radio-archives/episode/391/More-Is-Less
http://www.thisamericanlife.org/radio-archives/episode/392/Someone-Elses-Money
I don’t get it, this sounds like the British NHS – long wait times for non-emergencies, byzantine bureaucracy, incomprehensible price scheme. Plus, we get the privilege of paying thousands in premiums. What a deal!
Philip-
The $510 is not what it would have cost, that is what we as doctors charge so that we can hope to get a small percentage of that. It’s a game with the insurance companies.
If we charge $83.00, then they will only pay a percentage of it, so the typical “charges” are 3 times what medicare pays (which are set rates). It doesn’t mean that you would get this without insurance.
It’s ridiculous that for a total physical that the physician only gets that amount. It barely covers the support staff and doesn’t allow for any salary for the physician.
It’s a crazy system that is not going to get any better with the new healthcare reform!
Private Practice Doc Helen
Helen,
What you are saying is clearly BS. I have had bills for my uninsured mother (she’s over 60 and not a citizen) that go into thousands for trivial treatments. Yes, the doctors and hospitals DO charge the uninsured patients the full sticker price, without any shame.