Bitter Pill: Why Medical Bills Are Killing Us

[myreality]

Found this to be a great read about the current problem with the healthcare industry. It is getting a lot of positive feedback. This is just the 1st page out of 7.

I put it in the poopdeck because i am certain where it will eventually lead into.



http://healthland.time.com/2013/02/2...re-killing-us/

1. Routine Care, Unforgettable Bills
When Sean Recchi, a 42-year-old from Lancaster, Ohio, was told last March that he had non-Hodgkin’s lymphoma, his wife Stephanie knew she had to get him to MD Anderson Cancer Center in Houston. Stephanie’s father had been treated there 10 years earlier, and she and her family credited the doctors and nurses at MD Anderson with extending his life by at least eight years.

Because Stephanie and her husband had recently started their own small technology business, they were unable to buy comprehensive health insurance. For $469 a month, or about 20% of their income, they had been able to get only a policy that covered just $2,000 per day of any hospital costs. “We don’t take that kind of discount insurance,” said the woman at MD Anderson when Stephanie called to make an appointment for Sean.

Stephanie was then told by a billing clerk that the estimated cost of Sean’s visit — just to be examined for six days so a treatment plan could be devised — would be $48,900, due in advance. Stephanie got her mother to write her a check. “You do anything you can in a situation like that,” she says. The Recchis flew to Houston, leaving Stephanie’s mother to care for their two teenage children.

About a week later, Stephanie had to ask her mother for $35,000 more so Sean could begin the treatment the doctors had decided was urgent. His condition had worsened rapidly since he had arrived in Houston. He was “sweating and shaking with chills and pains,” Stephanie recalls. “He had a large mass in his chest that was … growing. He was panicked.”

Nonetheless, Sean was held for about 90 minutes in a reception area, she says, because the hospital could not confirm that the check had cleared. Sean was allowed to see the doctor only after he advanced MD Anderson $7,500 from his credit card. The hospital says there was nothing unusual about how Sean was kept waiting. According to MD Anderson communications manager Julie Penne, “Asking for advance payment for services is a common, if unfortunate, situation that confronts hospitals all over the United States.”


The total cost, in advance, for Sean to get his treatment plan and initial doses of chemotherapy was $83,900.

Why?

The first of the 344 lines printed out across eight pages of his hospital bill — filled with indecipherable numerical codes and acronyms — seemed innocuous. But it set the tone for all that followed. It read, “1 ACETAMINOPHE TABS 325 MG.” The charge was only $1.50, but it was for a generic version of a Tylenol pill. You can buy 100 of them on Amazon for $1.49 even without a hospital’s purchasing power.


Dozens of midpriced items were embedded with similarly aggressive markups, like $283.00 for a “CHEST, PA AND LAT 71020.” That’s a simple chest X-ray, for which MD Anderson is routinely paid $20.44 when it treats a patient on Medicare, the government health care program for the elderly.

Every time a nurse drew blood, a “ROUTINE VENIPUNCTURE” charge of $36.00 appeared, accompanied by charges of $23 to $78 for each of a dozen or more lab analyses performed on the blood sample. In all, the charges for blood and other lab tests done on Recchi amounted to more than $15,000. Had Recchi been old enough for Medicare, MD Anderson would have been paid a few hundred dollars for all those tests. By law, Medicare’s payments approximate a hospital’s cost of providing a service, including overhead, equipment and salaries.

On the second page of the bill, the markups got bolder. Recchi was charged $13,702 for “1 RITUXIMAB INJ 660 MG.” That’s an injection of 660 mg of a cancer wonder drug called Rituxan. The average price paid by all hospitals for this dose is about $4,000, but MD Anderson probably gets a volume discount that would make its cost $3,000 to $3,500. That means the nonprofit cancer center’s paid-in-advance markup on Recchi’s lifesaving shot would be about 400%.

When I asked MD Anderson to comment on the charges on Recchi’s bill, the cancer center released a written statement that said in part, “The issues related to health care finance are complex for patients, health care providers, payers and government entities alike … MD Anderson’s clinical billing and collection practices are similar to those of other major hospitals and academic medical centers.”

The hospital’s hard-nosed approach pays off. Although it is officially a nonprofit unit of the University of Texas, MD Anderson has revenue that exceeds the cost of the world-class care it provides by so much that its operating profit for the fiscal year 2010, the most recent annual report it filed with the U.S. Department of Health and Human Services, was $531 million. That’s a profit margin of 26% on revenue of $2.05 billion, an astounding result for such a service-intensive enterprise.1

The president of MD Anderson is paid like someone running a prosperous business. Ronald DePinho’s total compensation last year was $1,845,000. That does not count outside earnings derived from a much publicized waiver he received from the university that, according to the Houston Chronicle, allows him to maintain unspecified “financial ties with his three principal pharmaceutical companies.”

DePinho’s salary is nearly triple the $674,350 paid to William Powers Jr., the president of the entire University of Texas system, of which MD Anderson is a part. This pay structure is emblematic of American medical economics and is reflected on campuses across the U.S., where the president of a hospital or hospital system associated with a university — whether it’s Texas, Stanford, Duke or Yale — is invariably paid much more than the person in charge of the university.

I got the idea for this article when I was visiting Rice University last year. As I was leaving the campus, which is just outside the central business district of Houston, I noticed a group of glass skyscrapers about a mile away lighting up the evening sky. The scene looked like Dubai. I was looking at the Texas Medical Center, a nearly 1,300-acre, 280-building complex of hospitals and related medical facilities, of which MD Anderson is the lead brand name. Medicine had obviously become a huge business. In fact, of Houston’s top 10 employers, five are hospitals, including MD Anderson with 19,000 employees; three, led by ExxonMobil with 14,000 employees, are energy companies. How did that happen, I wondered. Where’s all that money coming from? And where is it going? I have spent the past seven months trying to find out by analyzing a variety of bills from hospitals like MD Anderson, doctors, drug companies and every other player in the American health care ecosystem.

When you look behind the bills that Sean Recchi and other patients receive, you see nothing rational — no rhyme or reason — about the costs they faced in a marketplace they enter through no choice of their own. The only constant is the sticker shock for the patients who are asked to pay.


Yet those who work in the health care industry and those who argue over health care policy seem inured to the shock. When we debate health care policy, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

What are the reasons, good or bad, that cancer means a half-million- or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?

Recchi’s bill and six others examined line by line for this article offer a closeup window into what happens when powerless buyers — whether they are people like Recchi or big health-insurance companies — meet sellers in what is the ultimate seller’s market.

The result is a uniquely American gold rush for those who provide everything from wonder drugs to canes to high-tech implants to CT scans to hospital bill-coding and collection services. In hundreds of small and midsize cities across the country — from Stamford, Conn., to Marlton, N.J., to Oklahoma City — the American health care market has transformed tax-exempt “nonprofit” hospitals into the towns’ most profitable businesses and largest employers, often presided over by the regions’ most richly compensated executives. And in our largest cities, the system offers lavish paychecks even to midlevel hospital managers, like the 14 administrators at New York City’s Memorial Sloan-Kettering Cancer Center who are paid over $500,000 a year, including six who make over $1 million.

Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.

According to one of a series of exhaustive studies done by the McKinsey & Co. consulting firm, we spend more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia. We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy. We spent almost that much last week on health care. We spend more every year on artificial knees and hips than what Hollywood collects at the box office. We spend two or three times that much on durable medical devices like canes and wheelchairs, in part because a heavily lobbied Congress forces Medicare to pay 25% to 75% more for this equipment than it would cost at Walmart.

The Bureau of Labor Statistics projects that 10 of the 20 occupations that will grow the fastest in the U.S. by 2020 are related to health care. America’s largest city may be commonly thought of as the world’s financial-services capital, but of New York’s 18 largest private employers, eight are hospitals and four are banks. Employing all those people in the cause of curing the sick is, of course, not anything to be ashamed of. But the drag on our overall economy that comes with taxpayers, employers and consumers spending so much more than is spent in any other country for the same product is unsustainable. Health care is eating away at our economy and our treasury.

The health care industry seems to have the will and the means to keep it that way. According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.

When you crunch data compiled by McKinsey and other researchers, the big picture looks like this: We’re likely to spend $2.8 trillion this year on health care. That $2.8 trillion is likely to be $750 billion, or 27%, more than we would spend if we spent the same per capita as other developed countries, even after adjusting for the relatively high per capita income in the U.S. vs. those other countries. Of the total $2.8 trillion that will be spent on health care, about $800 billion will be paid by the federal government through the Medicare insurance program for the disabled and those 65 and older and the Medicaid program, which provides care for the poor. That $800 billion, which keeps rising far faster than inflation and the gross domestic product, is what’s driving the federal deficit. The other $2 trillion will be paid mostly by private health-insurance companies and individuals who have no insurance or who will pay some portion of the bills covered by their insurance. This is what’s increasingly burdening businesses that pay for their employees’ health insurance and forcing individuals to pay so much in out-of-pocket expenses.

1. Here and elsewhere I define operating profit as the hospital’s excess of revenue over expenses, plus the amount it lists on its tax return for depreciation of assets—because depreciation is an accounting expense, not a cash expense. John Gunn, chief operating officer of Memorial Sloan-Kettering Cancer Center, calls this the “fairest way” of judging a hospital’s financial performance

The health care industry seems to have the will and the means to keep it that way. According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.

[BaneTheBrawler]

Mom fronted $85000 on short notice. Guy still got treated. Not saying there's not a problem, but this seems like maybe not the best example, since, yknow, that's more than most people make in a year and they paid it up front.

[archibaldcrane]

Well, that, and they had insurance but they didn't want to go to one of those dirty hospitals that actually took it, no, they needed to hit mom up for the cadillac care.

[archibaldcrane]

That being said, I used my old shit insurance when I had food poisoning so bad that I had to get an IV, and urgent care didn't do IVs so I had to go to the ER, and I got hit with a $5300 medical bill for 3 bags of saltwater and an anti-nausea medication and 3 hours in an ER bed AFTER INSURANCE.

So yeah shit is fucked up.

[Ksandra]

Well, that, and they had insurance but they didn't want to go to one of those dirty hospitals that actually took it, no, they needed to hit mom up for the cadillac care.

To be fair, is what he had life-threatening? Wouldn't you if you could find a way?

Some of the stuff they talk about with the waiting and approval hits me. When I was pregnant I couldn't go to the doctors for three months even though I had insurance. It was all because of transferring and paperwork bs. Couldn't just go see an OB, had to see the regular doctor first so he could refer me over. Oh, but couldn't see the doctor until the other clinic sent over my paperwork and the new doctor saw it to approve it. etc. etc.

Took three months, THREE, to get all that shit straightened out. Insanely frustrating.

[myreality]

Mom fronted $85000 on short notice. Guy still got treated. Not saying there's not a problem, but this seems like maybe not the best example, since, yknow, that's more than most people make in a year and they paid it up front.

Nonetheless, Sean was held for about 90 minutes in a reception area, she says, because the hospital could not confirm that the check had cleared. Sean was allowed to see the doctor only after he advanced MD Anderson $7,500 from his credit card.

I pretty much read the rest of the article and it gets worse and worse, so bad that i honestly feel like punching a doctor for being part of the system.

Reminds me of that one article where a women is stung by a scorpion and the hospital charged her $43000 for two vaccine shots. Same vaccines cost $100 in mexico where they got it from.

[Apelila]

People blaming the patient for going to the quality hospital when they can afford it are missing the point.

The best doctors and medical facilities have out priced themselves from the majority of Americans simply because they can.
They've spent more in congress making sure we can't get medicine cheaply from other companies than any other lobbying industry.
For them the Hippocratic oath includes the clause: "So long as they can afford the amount that I want to charge".

But yes, lets blame the person who's afraid of dying for wanting the best care possible and being willing to pay that much. That makes sense.

[Komm Suesser Tod]

People blaming the patient for going to the quality hospital when they can afford it are missing the point.

The best doctors and medical facilities have out priced themselves from the majority of Americans simply because they can.
They've spent more in congress making sure we can't get medicine cheaply from other companies than any other lobbying industry.
For them the Hippocratic oath includes the clause: "So long as they can afford the amount that I want to charge".

But yes, lets blame the person who's afraid of dying for wanting the best care possible and being willing to pay that much. That makes sense.

I think part of it is that while when you're in that situation, you want the best care, you do whatever you have to, but when you are sitting there reading it, and you don't have those options, you just get mad. It's like everybody is climbing up a ladder, and every person is crapping on the person below them, and all you can think is "wow, it must me nice to be the guy ahead of me."

[Kalmado]

Crazy story. I'm sure there are many similar stories out there. I detest going to doctors anymore and avoid it at all costs. For the most part, I'm pretty healthy so it's ok for now. I only take Prozac for anxiety on a regular basis which I get that prescribed from a doctor at the local "poor people care facility". I don't mind going there because they don't mess around. One visit, they take their time, and I got something that helped me.

As Ksandra said regarding referrals, it's all BS. My wife had a lot of problems getting the proper care for her daily migraine attacks. Every doctor wanted a referral and would tell us which family doctor to see first. It was always something like, "you gotta do xyz and maybe we'll find the problem" essentially forcing us to make numerous appointments with numerous doctors. When she still worked a retail job she had an attack on a Sunday so bad her manager called me to come pick her up. I get there and had to carry her to the car. We went to the ER (no urgent care places open) and the receptionist was so annoyed at the fact people were there. My wife is sitting there trembling, sweating, moaning from the pain and we get told they don't know when we'll be seen.

My wife held it together for about 45 minutes before throwing up. The receptionist knew it when she was looking at the bathroom where you could here my wife vomitting. I asked if there was anyone available and she quickly said no we had to wait. After awhile longer we get seen by a nurse who takes her temp, blood pressure, etc. We think we're getting seen, but he tells us to sit back down. We wait for one hour more before my wife throws up again and passes out in the waiting room. We end up leaving and I take care of her at home. Next week the ER has the nerve to send us a bill.

When I pursued Accutane, it was hell trying to find a dermatologist that 1)would be seen before a referral 2)accepted my insurance 3)wanted at least 3 regular appointments before prescribing Accutane. I called around until I found a doctor that didn't require a referral and had glowing reviews. First visit he spends over an hour with me talking about the drug and everything that it does both good and bad. He tells me to think it over if it's what I really want and if I want it, to just call the office and tell them I want the RX. After that I had follow up appointments once every 2 months as it was required for that drug. Overall a great experience with that doctor, but it took a lot of time, effort, and luck.

[kuronosan]

With my insurance plan my wife and I can go see any specialist we want without a referral. In my opinion, needing a referral is necessary in some cases but in most cases it's not. Seriously. Why go see a family practitioner if you have gastritis symptoms when a specialist can just get it out of the way right then and there? More often than not you're going to get referred by lazy doctors anyway.

Those bills don't surprise me in the slightest and as dumb as they are I do have to defend the lab testing. Making a lab test into "$25 for a simple blood draw" makes lab testing sound so trivial. Fuck that. Have these people ever drawn blood? $25 is generous, especially considering the amount of work and quality control that goes into the tests that follow.

If you want to attack billing, attack the ridiculous pricing of medication.

edit:

To elaborate on lab testing:

The average cost for the reagents needed to stain a slide to determine whether a person has leukemia or not cost anywhere from $200-500. They get replaced every night. On top of that, the instrument has to sample the blood (assuming it's drawn and labeled correctly) and the reagents for that instrument cost about $100 per test. You also have the tech reading the slide, the pathologist confirming it, and the flow cytometer to read the cell markers to confirm it's leukemia.

[Kalmado]

I kinda went on a rant there. Sorry! But yeah kuro you bring up some great points. My Accutane medication for generic was $775 per month. I found out when on my 4th month (6m program) I picked up my RX from Walgreens and the girl asked for $750. Said my insurance only covered like, $25 of it. I called my HR at work (worked at a hospital at the time) and they told me I had a cap on my RX coverage of $1500 per year. I had the "above average" insurance too. Point being, I was never told anything about a cap. Not surprising when you have a team leader of your department trying to explain a 300 page health coverage plan and they don't have a clue as to what they're talking about either.

[Tyche]

With my insurance plan my wife and I can go see any specialist we want without a referral. In my opinion, needing a referral is necessary in some cases but in most cases it's not. Seriously. Why go see a family practitioner if you have gastritis symptoms when a specialist can just get it out of the way right then and there? More often than not you're going to get referred by lazy doctors anyway.

Those bills don't surprise me in the slightest and as dumb as they are I do have to defend the lab testing. Making a lab test into "$25 for a simple blood draw" makes lab testing sound so trivial. Fuck that. Have these people ever drawn blood? $25 is generous, especially considering the amount of work and quality control that goes into the tests that follow.

If you want to attack billing, attack the ridiculous pricing of medication.

edit:

To elaborate on lab testing:

The average cost for the reagents needed to stain a slide to determine whether a person as leukemia or not cost anywhere from $200-500. They get replaced every night. On top of that, the instrument has to sample the blood (assuming it's drawn and labeled correctly) and the reagents for that instrument cost about $100 per test. You also have the tech reading the slide, the pathologist confirming it, and the flow cytometer to read the cell markers to confirm it's leukemia.

Do you not have family members that call you for medical advice? I don't mind the referrals because, quite honestly, people are generally too ignorant to know which specialist they need. They think they need a gastroenterologist when they need an EENT or vice versa. I have had family members call and say "my baby woke up with a dry diaper and she's been throwing up all night, what do I do...". Those aren't the people I want skipping referrals. It'd be far too inefficient.

[Kalmado]

Do you not have family members that call you for medical advice? I don't mind the referrals because, quite honestly, people are generally too ignorant to know which specialist they need. They think they need a gastroenterologist when they need an EENT or vice versa. I have had family members call and say "my baby woke up with a dry diaper and she's been throwing up all night, what do I do...". Those aren't the people I want skipping referrals. It'd be far too inefficient.

Absolutely! My reference is when you have bad skin, but a Derm tells you to see your family doc first. Just a money grab!

[Byrthnoth]

Sometimes you need to look at other options when you're getting medicine. A few times it has been cheaper to buy on-brand for me rather than generic because the insurance company has some specific deal with that medicine manufacturer. I just ask by default now because it has happened so much.
- "You can get brand or off-brand. Generally offbrand is cheaper, so I'll give you that."
- "Um, could you check the price with my insurance please?"
- "Weird, generic would be $50 and brand is free. Okay, I'll put you down for brand then."

Specifically it has happened with Accutane and Z-pacs so far.

[Kalmado]

Wow Byrth thanks for the tip! When I had that issue, my work granted me another $1k in RX coverage and I picked up Walgreens in house RX plan. It ended up saving me a lot of money, but going from paying your $10 copay to like, $200 still sucks!

[Raldo]

Worst story I have is a $10,000 ambulance ride to take my wife from one hospital to another a half-hour away. They didn't hook her up to anything, they just put her on a stretcher and shipped her off. There were two EMTs in the ambulance with her. Shit, I could've provided that service in my own damn car for $2.

I can't complain, since insurance ate the whole bill (though they obviously knocked the price down to whatever the insurance is willing to pay first, which is the part that's unfair about medical billing IMO).

[Ragnus]

Sounds kinda like my attempts to get on cholesterol meds. Background: I have bad cholesterol on both sides of my family. On a GOOD day I'm around 275 and sometimes spike over 300.

Over the course of 5-8 years I've seen three nutritionists, two gastroenterologists who sent me in for liver ultrasounds and another liver scan, and had my doctor who knows my family history just prescribe diet and exercise. Fast forward to about 3 months ago. I've been mostly vegetarian for about a year and a half, cut down how much I eat in general, and started walking the dog consistently for exercise. I go in for bloodwork and my cholesterol levels were still 275. I pretty much had to make another appointment just to say "Give me the damn pills already."

[kuronosan]

Do you not have family members that call you for medical advice? I don't mind the referrals because, quite honestly, people are generally too ignorant to know which specialist they need. They think they need a gastroenterologist when they need an EENT or vice versa. I have had family members call and say "my baby woke up with a dry diaper and she's been throwing up all night, what do I do...". Those aren't the people I want skipping referrals. It'd be far too inefficient.

I know, I agree completely. That was really what I was getting it. There are many people who want a specialist for things that can honestly be taken care of by a IM/GP. There are some things (in my case, I suffered from a case of acute CNV) that really require a specialist to look at. I went to a GP Ophthalmologist who referred me to a specialist surgeon to take care of it. When all is said and done you're suddenly being billed by 2-3 people for the same thing just because they said "hello" and signed a piece of paper sending you to the next guy.

The core of billing errors really stems not from the lab testing or the waiting, it really comes from being billed by 20 doctors who do no more than send you to the next but still want to be paid like they spent the whole day with you. On top of that, you have the outrageously high prices for medications that are relatively common but because the ICD-9 says you're "super sick" the price suddenly shoots up.

Medical billing is really all about looking at ways to penny pinch reimbursement and it makes me sick because the patient is the one who suffers.

edit:

I go in for bloodwork and my cholesterol levels were still 275. I pretty much had to make another appointment just to say "Give me the damn pills already."

Good God man, are you on statins? What's your HDL like?

[Talus]

I know, I agree completely. That was really what I was getting it. There are many people who want a specialist for things that can honestly be taken care of by a IM/GP. There are some things (in my case, I suffered from a case of acute CNV) that really require a specialist to look at. I went to a GP Ophthalmologist who referred me to a specialist surgeon to take care of it. When all is said and done you're suddenly being billed by 2-3 people for the same thing just because they said "hello" and signed a piece of paper sending you to the next guy.

The core of billing errors really stems not from the lab testing or the waiting, it really comes from being billed by 20 doctors who do no more than send you to the next but still want to be paid like they spent the whole day with you. On top of that, you have the outrageously high prices for medications that are relatively common but because the ICD-9 says you're "super sick" the price suddenly shoots up.

Medical billing is really all about looking at ways to penny pinch reimbursement and it makes me sick because the patient is the one who suffers.

edit:


Good God man, are you on statins? What's your HDL like?

CNV or CSR? You had to see retina guys, huh? They have a pretty cush lifestyle...

[Ragnus]

Good God man, are you on statins? What's your HDL like?

Those were the pills I was talking about. I just got onto 10mg atorvastatin just over a month ago. And to answer your second question, way too high despite my trying to change that. My sister was the only one in my family with good cholesterol levels and that's only because she was on her high school / college swim teams.

I'm in the gym 3-5 times a week now on top of that so I'll see what I look like come my next check up in June.