Checking out my United Healthcare paperwork, here are some of the latest scams from the American health care system.
The eye doctor billed $1,500, which the uninsured (sucker) would have had to pay. United Healthcare cut them back to $179, apparently the fair price. The eye doctor’s technician messed up the prescription by not using the automatic refractometer to get a basic sanity check before asking me all of the “1 versus 2” questions. I went back and United Healthcare was billed another $112, which they decided should have been $34. (Shout-out to Costco, which remade two pairs of glasses with the corrected prescription at no charge.)
I went to see a different specialist. The bill was $900 for what United Healthcare said should have been $219 worth of services.
I went to a physical therapist for a $934 look at my neck (tip: don’t sit at a computer for decades!) that was worth only $130.
How did we get to the point where stuff like this doesn’t faze Americans? We’ve become accustomed to the idea that health care providers try to rip off the uninsured, that absurd prices fly around in the system until they’re negotiated down by a computer or a person at a health insurance company (and, of course, we have to pay for that negotiation since the health insurer has no source of revenue other than us), but how did that happen?
Related:
- Gender Studies class goes to the eye doctor
- The $27,321 MRI (the fair price was $1,287 and the value was $0)
- “Some Hospitals Marking Up Treatments By as Much as 1,000 Percent: Study” (NBC 2015): “The hospital with the highest charges? North Okaloosa Medical Center, about an hour outside Pensacola, Florida. It charges uninsured and out-of-network patients 12.6 times what Medicare allows.” (the justification for this is that the hospitals also provide “uncompensated care”, e.g., for migrants who don’t qualify for Medicaid, and the best way to make up for these losses is to cheat the uninsured)
- CNN story about a hero to progressives (I personally see the providers and the government regulators as the villains; in my view insurers are doing the best they can inside a completely broken system):
“We’ve become accustomed to the idea that health care providers try to rip off the uninsured”
But with Medicare, expanded Medicaid, CHIP, and heavily-subsidized ACA, isn’t there nearly zero uninsured?
Mr. Google says 8 – 9 % of Americans are uninsured in 2024.
TL;DR: Buy low, sell high, and avoid going through middlemen. Stay well.
> But with Medicare, expanded Medicaid, CHIP, and heavily-subsidized ACA, isn’t there nearly zero uninsured?
Privileged insured people, please, we prefer to be called “self-payers” or “insurance deadbeats”, rather than “uninsured”–less of a stigma. 😉 Also, “aren’t”.
My wife and I are well into a comfortable “upper middle class” existence in the U.S. As a small business owner in my 50s, I’m priced out of medical insurance, however. I used to be insured under my wife’s plan at her “normal” job, first in a traditional plan, then catastrophic high-deductible only. Once that catastrophic option was gone (too old, they only consider young people dying as a catastrophe–fair enough), I was looking at the Royal^H^H^H^H^H^H national Obamacare marketplace at $800/month to buy a plan that didn’t pay for anything, so I just decided to pocket the money and become a deadbeat–a massive heart attack would be my retirement plan! I’m thinking about getting a tat on my shoulder that says “DNR — This means you, Dr. Jekyll!” in Comic Sans. Maybe take up rope-less rock climbing, skydiving, sport pilot flying, or driving an EV.
Fortunately, I found a medical group that heavily discounts (80% for most services) for “self-payers”. They make uninsured pariahs like me pay up front: they always seem to be apologetic about that and ashamed for me. But sometimes I even get refund checks! Even my wife, who does have coverage, goes to a medical practice that doesn’t file for insurance, which saves us a fortune. All of which is direct evidence that most of what we pay goes to some middle-man bean counter, playing doctor. As for why the doctor bills you $1000 for a $50 net-to-them procedure, that is just good old fashioned marketplace bartering–start with an outrageous “ask”, like any carpet merchant in Morocco.
Doctors increasingly work for others, rather than owning their own practice. More middle-men, er middle-persons. My doctor said she didn’t mind me being a deadbeat, she would get paid through the medical group regardless. Drs., of course, also have unaffordable premiums for malpractice insurance, and the encumbrance of med school debt.
I don’t recommend the deadbeat life to just anyone, it’s downright sacrilegious and subversive in the U.$. (my credit card company hates me, I always pay the balance on the day I get the bill; my bank and doctor hate me because I’ve never had a mortgage). For example, if I were to need rabies shots, that would be $10,000 each. But from the amount I have saved in premiums (pushing $100K), I could pay that in cash. I’m thinking about moving to a recreational MMJ state to eliminate the need for prescription drugs.
“I always pay the balance on the day I get the bill” Nobody hates you for this. This increases credit card reserves, there are enough people who pay interest. Also, if you are paying before due date, it is as if you giving your credit card company short term loan. Instead of paying on the day you get the bill, schedule full payment to be pain on the due date. Enjoy .some extra cash.
I recently had successful cataract removal surgery in one eye. I had to pay the full cost at $1500, since I hadn’t met my annual $3000 deductible.
For comparison, a contractor is installing a new 9×7 garage door at my home on Friday for $2100.
I recently received a bill for $3000 for a five minute out-of-town ambulance ride necessitated by a nosebleed caused by primary aldosteronism.
There are several noteworthy observations:
1- The medical system really really really does not want to treat primary aldosteronism properly. It could be all the diabetes doctors named Mohammed. It also could be the medical trials like ALLHAT that created standards of care based on a cohort of sedentary obese 70 years olds with high sodium diets (ace/arb+hctz recommended).
2- I was never actually billed $3000. Instead my bank notified me of a collection that had been filed on my credit report. This may be my get out of jail free card as it is patently illegal under state and federal law to bill directly to collections. It is also par for the course for medicine and may require lawyers to resolve either way.
3- To answer the question proposed “how did that happen?” It is impossible to fund an egalitarian sector like health care at 20-25% of gdp, without some degree of socialist thuggery. Tax receipts typically start to struggle above the 20-25% range, and the government has many additional priorities. The web of mandates, insurance scams, and thuggish billing practices is how we get socialism while maintaining the illusion of free markets.
The short answer for why the system is screwed up is that people generally aren’t good stewards of other people’s money.
Related, I’ve noticed a sharp decrease in “we don’t want to pay you for the service you billed” letters from United/subcontractors working for United over the past 3-4 months. I wonder if it’s related to new leadership there
https://pmc.ncbi.nlm.nih.gov/articles/PMC10810293/
It’s been like this our whole adult life or longer. Glad you noticed finally. 🙂
Let’s blame the usual suspects: accountants, lawyers, lobbyists and legislators.
Doctors just want to pay off med school debts, get a good return on indentured service time invested, and help people?
Do forced price mark downs create losses to offset incomes?
What genius got the (not) great idea of tying health insurance to employment anyway?
Companies contracting with insurance companies to manage “self-insurance” funds is another (not) great game.
Uninsured don’t always have to pay full bills. Making minimal periodic payments until death is apparently a tactic.
What a mess. Follow the money.
Don’t give the lion kingdom jury duty for a healthcare CEO murder case.
Total agreement: “I personally see the providers and the government regulators as the villains; in my view insurers are doing the best they can inside a completely broken system”
American health care is hard to understand, and the typical American consumer lacks the tools to confront the realities and complexities of the system. That makes it easy to shift blame: users and providers blame insurance companies (providers also blame “administrators”) and politicians blame “the system.”
https://www.seattletimes.com/nation-world/nation/every-american-family-basically-pays-an-8000-poll-tax-under-the-u-s-health-system-top-economists-say/
People come up with all sorts of complicated ideas for reforming the US medical care sector. Like nationalizing the entire system. These are politically very difficult to push through, and because they’re some complex, it’s hard to get them right. But there are a few easy things that could be done that would help considerably.
1. Outlaw price discrimination in medical care. Providers should be required to charge everyone the same price for the same procedure. If some particular customer (an insurance company, say) wants to negotiate a lower price for some particular thing, that new price would apply to everyone. In order for this to work prices have to be transparent, of course. Like they are for automotive repair or veterinary care.
2. Make the tax implications of medical insurance premiums and medical expenses uniform regardless of who is paying. Currently if a company pays your medical insurance as a benefit, it is deductible, whereas if you pay it yourself, it is not. This is a relic of WWII-era salary controls, and could be easily abolished: the taxes should be the same regardless of who pays the premium. Similarly, insurance companies can deduct the fees they pay for medical services, whereas consumers cannot. Again, this should be uniform.
3. Allow interstate commerce for insurance. Currently a patchwork of per-state regulations makes it impractical for a single insurance provider to operate in more than one state. The means there are a small number of providers operating in each state (typically owned by a big multi-state conglomerate, of course), reducing competition. The commerce clause in the US constitution allows congress to abolish these anticompetitive barriers.
4. There are regulations that limit deductibles in insurance policies. Allowing arbitrarily high deductibles (perhaps requiring the consumer to have money set aside in an escrow account to ensure that they can meet the deductible) would help keep costs down by motivating some consumers to pay more attention to costs.
Everyone has magical fixes for the health care system, but most are fraught with problems.
ACA: Get everyone into the system to improve health outcomes, but the reverse happened.
ACA: Subsidize the poor, so paying customers don’t have to cover deadbeats, but the reverse happened.
US Healthcare is the only business in the world were a physician can earn $500k per year, while a large chunk if their work is charity care. Usually charity workers get low salaries…
Some think “moar doctors!” but importing more PCPs and endocrinologist from Dar El Salam university is unlikely to lower costs and certain to lower quality.
In my experience, the pay-per-service model is the biggest problem with the US health system, because it encourages short appointments, missed patient history, lack of accountability for outcomes, and systematic billing fraud.
To wit: go to hospital with nosebleed caused by primary aldosteronism. Ambulance company sends bill directly to collections. Collections is running a “pay extra for credit repair” extortion racket. Hospital orders a chest x-ray and brain CT to evaluate nosebleed. Then notices blood count is borderline low, refers to hematology for bone barrow evaluation. Eventually also referred to nephrology and cardiology, for a kidney ct, renal artery evaluation, and echo. Patient (me!) asks for an adrenal evaluation. Response: You have essential hypertension. Why would we do this? It is medically unnecessary, and insurance wouldn’t pay for it anyway!
@Barak, @Steve, you forgot to mention that:
1) Americans complain about their health far more than people in other countries.
2) Americans, both doctors and patients, over-diagnose and over-analyze every health issue.
3) Americans are among the least healthy populations in the developed world.
Just turn on the TV, there is a flood of ads about health issues and prescriptions that promise to magically improve your life a thousandfold. The ad presents a sick person struggling with a condition, and within 10 seconds, they are as healthy as a horse. Thanks to the miracle drug being advertised!
Of course, in the last two seconds of the ad, a fine print scrolls by listing a dozen side effects, often in a barely readable font and spoken at lightning speed.
A modest proposal to address the many problems plaguing the American health care system: increase the number of physicians. Solve the physician shortage, and the rest will fall into place—as if by gravity.
> increase the number of physicians
Spot on. I didn’t have time to read the 906 page ACA [insert joke about legislators not reading it either], but it doesn’t appear that there was much thought about what would happen when the health care system was flooded with non-participants. Supply and demand, like they taught us in Microecon 101 at Barnard College:
https://en.wikipedia.org/wiki/Supply_and_demand
[ChatGPT criticized my post here yesterday as slightly humorous, even snarky, but not offering any solutions myself, so…] “Solve the physician (and healthcare workers in general) shortage” probably should have been done *before* radically changing the system. How do you convince young people to go to school for (what?) 8+ years and take on $500K+ debt, just to go work for someone else in the modern healthcare stress-factory. COVID did not help the perception of the desirability of being a doctor. My kids want to be influencers or on the dole.
Phil’s quote: > I personally see the providers and the government regulators as the villains;
“Don’t ascribe to villainy that which can be explained by mere stupidity and greed.” — Me
I’m not a commie or anything but I think the privatization and conglomeration of health-care providers (not the individual doctors, generally) are also part of the problem. Microeconomics aside, people can’t really be considered fungible, “spherical cows”:
https://en.wikipedia.org/wiki/Spherical_cow
in the healthcare system.
On the demand side, we need to stay well ourselves and have policy that supports wellness, rather than more efficiently fixing illness. I change the oil in my car every 5000 miles and they last decades, as a proof by anecdote.
% sed ‘s/privatization/for-profitization/’ comment.txt
Isn’t this a common problem with anything our government gets involved in?
The issue of inflated pricing followed by deep discounts already exists, just in reverse. Consider any government project: it often starts with a quote of $N, but within a few months or years, the cost balloons to 100 times that amount.
In summary, because the government is heavily involved in healthcare, the cost becomes “not my problem” and as a result, individual consumers get screwed.