The cost of American hospital care

Quicksearch

Blog Administration

Open login screen

RSS Readers

Sunday, February 24. 2013

The cost of American hospital care

Walter Mead linked to Brill's article in Time, Bitter Pill: Why Medical Bills Are Killing Us:

A quote:

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...

Tort reform is an easy place to start. I think 90% of CAT scans are defensive, and are billed at anywhere between $600 and $3000.

Second might be an acceptance of the inevitability of death. No, I do not mean death panels. I just mean acceptance. Death is not an enemy.

Posted by Dr. Joy Bliss at 14:50 | Comments (12) | Trackbacks (0)

Trackbacks

Trackback specific URI for this entry

No Trackbacks

Comments

Display comments as (Linear | Threaded)

This is an in-depth article that should be required reading before anyone's allowed to vote. I have sent the link to everyone I know, many of whom are involved in the healthcare industry. Mr. Mead was on that (gag me) ABC Sunday morning talk show along with Steve Rattner. Mr. Rattner, for all his money and fame, made a fool of himself.

The cost of providing medical care is going to kill our country unless we 1) get people accustom to paying for the simple stuff at the lowest cost point-of-delivery (NOT the emergency room); 2) treat medical insurance like we treat automobile insurance; no money for windshield wiper replacements and oil changes, but appropriate coverage for major damage; 3) confront and pass major tort reform; 4) publish costs of care so people can make intelligent decisions and providers are forced to be competitive. Somewhere else there is a list of tests and treatments a medical group suggested were unnecessary; i.e. mammograms for 90-year old women. The docs tend to order them because they don't want a lawsuit.

We should also consider serious reform of tax codes that allow deductible medical savings accounts so people can accumulate an emergency fund for having children, accidents and longterm care. Most will make better use of those dollars than a government employee in D.C.

#1 jma on 2013-02-24 15:58 (Reply)

Of course the most comprehensive tort reform would be a single-payer system. Good luck suing the Government!!

Actually, I have no idea how medical malpractice is handled in, say, Britain. Badly, I would guess, to the benefit of the bureaucrats, detriment of the citizens, and confusion to any legislators that seek oversight.

For that matter I don't know anything about how malpractice by doctors or nurses under government employ in the U.S. is handled. What happens if say you're a Sailor and you're malpractice'd upon?

#1.1 T.K. Tortch on 2013-02-24 21:33 (Reply)

I know how it's handled in the Netherlands:
- strict limits on compensation (think a few thousand tens of thousands of Euros for permanent disability or death at most)
- doctor may lose his license if found guilty, but that's rare
- cases are handled behind closed doors by a panel of other doctors, not by regular courts. Convictions are extremely rare.

IOW the cost of medical malpractice suits is negligible, a doctor may be hit by one that goes to court maybe once or twice in his career, as lawyers tend to dissuade clients from going through with the procedures seeing as they take long and tend to not be successful. Most hospitals will give an apology and cancel bills as settlement, which is more than a "court" would grant and far faster and more certain so most victims settle for that.

#1.1.1 J.T. Wenting on 2013-02-25 12:02 (Reply)

Anybody who things our health care system is based on free market principles is nuts.

I agree with Dr. Joy about tort reform. That should be the minimum that is done, but there is a hospital in Oklahoma that could revolutionize the way hospitals bill patients and insurance companies (see here: http://reason.com/reasontv/2012/11/15/the-obamacare-revolt-oklahoma-doctors-fi). Let's hope their idea snowballs.

#2 mudbug on 2013-02-24 20:54 (Reply)

$3000? I wish! The last time I set foot in a hospital, I got billed $30k for a CAT scan. Fortunately I qualified for my county's indigent program and after almost a year, they paid it.

I agree that tort claims (mainly malpractice), and the resulting huge cost of insurance against them, have driven the price of health care through the roof, but they're not the only cause. I see two others.

One is cronyism. It's supposedly against federal law for any health provider to charge different prices to the uninsured than what insurance companies pay, but I have yet to see or hear of a hospital where it doesn't happen all the time.

The other is the basic fact that the law requires hospitals to provide emergency-room care to people who can't pay, but (mostly) doesn't fund that care, thus compelling the hospital to charge its paying patients more. One could argue (though I don't go that far) that this form of "welfare subsidy" ought not happen -- but certainly if it does, it ought to be paid for by a (state) general tax, rather than by soaking other hospital clients.

#3 jdgalt on 2013-02-24 21:33 (Reply)

Jdgalt; The way they actually do that is slick. Both the uninsured and the well insured get billed the same ridiculous amount. Then the insurance company says by thh contract we negotiated with you, you will write off x% and we will pay the most of the rest and our insured (the patient) will pay Y. But the initial amount billed is the same, which is how they get around the cronyism thing.

Also, I don't think we will get very far in constraining costs until two things take place. The patient has to be paying part of the bill. Otherwise there is no disincentive to using the ER as primary care and demanding every imaginable test. Second, people need to accept that doctors are human an will make mistakes. Currently nobody accepts that any error can ever be made. So I order lots of low yield CT's to prove you don't have something bad. If you'd accept a 10% margin of error I could order a whole lot less testing. But since you aren't paying, your insurance is, you want certainty.

#3.1 PGowing on 2013-02-25 00:21 (Reply)

Let Costco or Walmart in on the action. There's no reason they couldn't offer CAT scans.

I'm serious. Let the MD write the order, and you find the vendor that meets your needs.

#3.2 Estoy Listo on 2013-02-25 10:17 (Reply)

Yeah, there isn't much reasonable thinking in hospital. My brother was in to build his blood up for a simple fluid removal. During the ultrasound the hospitialist found gall stones. Although he was asymptomatic for gall stones, they called in a surgical consult. This was useless because in his condition any surgery beyond emergency life saving surgery was tantamount to murder. The surgeon said "no way" and that'll be $1000 for the 10 seconds of reviewing the chart.

In fact, after they got his blood improved, they drew off fluid and two days later gave him 2 maybe 3 weeks to live and went straight to palliative care.

#4 JKB on 2013-02-24 22:26 (Reply)

Pittsburgh, PA is the same way - the biggest employer is NOT a steel mill or an industrial company, but the UPMC, the medical provider.

Of course, once a society has discretionary income, spending it on health care is usually priority.

The problem is that our methods of allocation of costs and prices is haywire.

#5 Whitehall on 2013-02-25 00:52 (Reply)

Administration is hard work. Money to pay tertiary administrators more than the President has to come from some where.

#6 ErisGuy on 2013-02-25 06:54 (Reply)

Not to be contrary, but MD Anderson basically covers the entire nation. It's not even a regional med center, it's a national or international med center. Some folks that visit there (those from countries with oil based economies?) typically pay large amounts for rooms and other amenities way above what the typical citizen pays. And they like it that way.

Not that I'm against having a LOT FEWER lawyers involved in EVERYTHING!!! Including medicine.

I'm sure the same could be said of certain other regional or national medical centers (Johns Hopkins? Mayo? etc.) YMMV.

#7 Larry Geiger on 2013-02-25 13:46 (Reply)

My doctor didn't accept my insurance so I would pay him (the clinic where he worked) in cash, file my claim with the insurance and the insurance would pay me about 35% of what the doctor charged me. When I needed an operation the surgeon at the clinic scheduled the operation and did the initial prep but then discovered they didn't accept my insurance. They refused to treat me. My surgeon did find me a surgeon who would perform the operation and all went well but the 2nd surgeon was paid $382 by the insurance company and the 1st surgeon who did not perform the surgery was paid $900 by me and nothing by the insurance company. The total billed exceeded $40,000, the total paid exceeded $12,000 of which I paid about $4,000. If the original doctor/clinic had accepted my insurance my share would have been well under $2000. What a mess mostly because my doctor/clinic didn't like my insurance.

#8 GoneWithTheWind on 2013-02-25 15:42 (Reply)

Add Comment

Name
Email	(Your e-mail will not show in your comment)
Homepage
In reply to
Comment	By commenting on this site you agree to the site rules listed here. Email addresses will not be displayed and will only be used for email notifications. Quick reference guide: [i] italics [/i], [b] bold [/b], [u] underline [/u], [url] (web address) [/url]. More tips here. Enclosing asterisks marks text as bold (word), underscore are made via _word_. E-Mail addresses will not be displayed and will only be used for E-Mail notifications. To prevent automated Bots from commentspamming, please enter the string you see in the image below in the appropriate input box. Your comment will only be submitted if the strings match. Please ensure that your browser supports and accepts cookies, or your comment cannot be verified correctly. Enter the string from the spam-prevention image above: BBCode format allowed
	Remember Information? Subscribe to this entry

Maggie's Farm

Our Recent Essays Behind the Front Page

Categories

Quicksearch

Links

Blog Administration

RSS Readers

Sunday, February 24. 2013

The cost of American hospital care