THCB

The Cost of Apples

Up until last May, my experience of medical costs was limited to the $100 per month premium I contributed towards my employer-sponsored insurance and the nominal co-pays associated with well-child checkups and generic prescriptions. There was never any hesitation in seeing a doctor or filling a prescription. That all changed when went I back to school.

I blindly signed up for the school-recommended family insurance and naïvely assumed myself, my wife, and my two young children would receive whatever health care we needed at a relatively small co-pay. The upfront premium of $10,000 was high, but I believed that this would cover whatever life threw at us. However, two experiences woke me up from my ignorance: my wife’s endoscopy and a visit to the pediatrician.

In July, my wife was sent by her doctor to get an endoscopy to determine the cause of her stomach pain. In the weeks following her procedure, we started receiving statements from our insurance company.

The statements declared that we were responsible for the full amount. We received the following explanation from our insurance company, “We don’t cover preexisting conditions.”

As we argued with the insurance company, the hospital bills started trickling in: $1200 from the outpatient center, $200 from our family physician, $400 for the anesthesiologist and $200 from the lab. We received six bills demanding $2600 for one procedure. As I examined the bills I was shocked by the redundancy—why is the cost for the anesthesiologist not included in the outpatient center bill? Why do I need to pay my family physician twice (the initial visit and the follow-up) for a procedure she ordered us to do? Besides feeling hung-out-to-dry by my insurance company, I felt taken advantage of by the medical system. It seemed as if everyone in that hospital wanted to include something for our visit.

After fighting tooth and nail to get our insurance to cover my wife’s endoscopy, they finally relented. Still, we were left with $700 to pay. For an unemployed student, $700 is not a small co-pay.

I studied the coverage booklet put out by my insurance, and I still do not understand what is covered and what is not. What I found was something similar to how we were billed for my wife’s endoscopy: the procedure itself is covered one way, labs are handled another way, and prescriptions are an entirely different matter. How am I supposed to know what labs or prescriptions are associated with an endoscopy?

Compared to my wife’s endoscopy, my daughter’s first visit to the pediatrician should have been straightforward. A fever that lasted three days followed by a rash was a simple diagnosis for her experienced pediatrician. What is not simple is the billing and insurance struggles we are facing. Our insurance company decided that my daughter’s fever was a preexisting condition, and as we fought with them to fulfill their responsibility, the pediatrician’s office contacted us that the $115 fee is actually $321. Again, the feeling of being taken advantage of is overwhelming. It could be that our doctor’s office is honest in their error, but I have never received services or products charged to me like this. In other words, when I go to the store, I know exactly how much a pound of apples will be long before I get to the cashier—and there are no “preexisting” conditions that add hidden costs at the register.

I’ve learned a lot about medical cost of care; that is, care costs a lot and it’s not straightforward what the cost is. I know that we have paid $11,021 for an endoscopy, a visit to the pediatrician and spotty coverage for the rest of the year. It’s not merely that medical care is expensive, it’s also that I have no estimate of what my costs will be. Getting new brakes on my car is expensive, but the mechanic is very careful to give me an itemized estimate before the repair is made. Recently, my wife, after a particularly exhausting week, started experiencing pain in her chest and a tingling sensation in her arm. Being a nurse, she knew exactly the tests that would be ordered if she went into the hospital.

Despite my attempts, she refused to go to urgent care knowing that the cost of the visit, even if our insurance company cooperated, would be enormous. There’s now a hesitation to use our medical resources that was never there before.

Samuel Yang is a patient from Maryland.

Costs of Care:
Costs of Care (Twitter: @CostsOfCare), where this post was originally published, is a Boston-based nonprofit organization that collects anecdotes from doctors and patients. We feel these stories are poignant because they put a face on some of the known shortcomings of our system, and also because they unveil how commonplace and pervasive these types of stories happen.

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Nurs6022PeterKG14Barry Carolnate ogden Recent comment authors
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Peter
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Peter

“they (lab) signed a contract with the insurance company to be a preferred provider which significantly undercuts reimbursements.”

Not sure I understand this. Do you mean the lab was forced to sign a contract that it will loose money on? Is the lab’s method of profit creation to gouge under/un insured?

Nurs6022
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Nurs6022

I sympathize with the Mr. Yang. I deal with under-insured people daily. My husband recently received a statement from a lab after a blood draw. Over $200. was written off by our insurance company. What was paid by the insurance company would not have paid for the supplies or the professional responsible for caring for the sample and recording the results. The uninsured or under-insured ultimately picks up the tab for our insurance coverage. I am thankful we have this coverage, however, I am concerned about the “hidden costs” to other consumers. In this case the lab company has to… Read more »

Peter
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Peter

“87% of all healthcare is paid by insurance.”

No, 100% of healthcare/profits/bonus/admin is paid by premium payers. I suspect Mr. Yang’s initial pre-exist ruling was due to his short time between signing up for insurance and using it. Not sure how you prove a non-preexisting condition?

“Besides feeling hung-out-to-dry by my insurance company, I felt taken advantage of by the medical system.”

Welcome to healthcare in America.

Barry Carol
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Barry Carol

There are a number of issues here. First, it’s interesting that one can easily get a package price for Lasik surgery or cosmetic surgery that’s not covered by insurance. For surgeries that are covered by insurance, you might be able to learn the hospital and the surgeon’s list price but not what they will actually accept as full payment. It is possible to find out what Medicare pays if you know the DRG or CPT-4 code(s), so at least that can be used as a benchmark. Second, when people present at a hospital ER with vague complaints like stomach pain… Read more »

steve
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steve

In 1965 there was not much medical care to buy. There were no CT scanners or MRIs. No CABG surgery, angioplasties or stents. Chemo was in its infancy. Labor epidurals were rare. Did we have antibiotics other than sulfur drugs and PCN?

Steve

Mark Spohr
Guest

Hi Nate, It’s impossible to find out how much medical care costs whether you have insurance or not. Over the past 10 months, we have been uninsured due to “preexisting conditions” and I have tried to shop for medical care. Of a total of about 8 episodes of care, I was given correct information on the cost in only one case (and that case was in Thailand where a complex surgery was exactly as quoted). Everyone else either said “I won’t/can’t give you that info” or gave me “estimates” which were usually far too low (this is known as “bait… Read more »

nate ogden
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nate ogden

“when I go to the store, I know exactly how much a pound of apples will be long before I get to the cashier” ” Getting new brakes on my car is expensive, but the mechanic is very careful to give me an itemized estimate before the repair is made.” The main difference between these two scenerios and insurance is in both of these your not asking someone else to pay the bill. Remove insurance from these basic healthcare needs and you wont have these issues. If you expect someone else to pick up the bill you need to expect… Read more »

KG14
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KG14

Yes, but what is that relative to their income? What is actual dollar amount (adjusted for inflation) spent, comparing the 50% of health care expenses in 1965 and 13% in 2011? I am truly curious.

Mark Spohr
Guest

Bobby,
I agree that we should stop fraud, abuse, overcharging and unnecessary health services.
I don’t think we should stop necessary health care which is what this article is about.
What is your definition of “misspent” ?

BobbyG
Guest

See http://4.bp.blogspot.com/_gdUOaDXBVdY/TNjUdm7j0uI/AAAAAAAAYRg/WRMS8FNpp6o/s1600/CADcost_x_Quality.png

From the 2010 HEDIS report. Virtually ALL of their major chronic measures show the same random buckshot pattern. I would argue that everything from 3 o’clock to 9 o’clock might be misspent (particularly 3 – 6; higher costs w/lower quality).

Mark Spohr
Guest

Interesting graph. A lot of medical care is like this. There is too little concern for cost or quality in medicine. I would like to first eliminate all of the low quality care (bottom half of the graph) and then look at the high cost care to get some measure of cost-effectiveness.
It should also be pointed out that virtually all medical care is driven by provider decisions so the place to start with this is the doctors who are ordering and performing the low quality and high cost care.

BobbyG
Guest

Yes, Mark, (to your first point) which is why I highlighted the upper left quadrant. with the red rectangle. I want to know what they’re “doing right”.

THe 2010 HEDIS plots for HTN, DM, and COPD look just like this, btw.

Mark Spohr
Guest

Most people don’t realize that their health insurance doesn’t really cover very much. All of that policy fine print only serves to provide exclusions and exemptions. This was documented nicely by Michael Moore in “Sicko” and unfortunately is discovered every day by more people.

BobbyG
Guest

“Every misspent dollar in the health care system is part of somebody’s paycheck.”

– Brent James, MD, M.Stat

Mark Spohr
Guest

Off topic: A continuing problem with this blog is that the hyperlinks in the RSS feed and other links do not work and return a 404 not found.
This particular article suffers from this problem and i was only able to access it from the main page, not from published links.
Please fix this.

steve
Guest
steve

You describe very well the reality of dealing with our payment system. Granted, it is not always this bad, but it happens more than people realize. Reading health insurance policies is like reading credit card agreements. If only we had some place where we could go to look at plans in direct comparison with each other, with no hidden or complex differences. Something like an exchange. On the provider side, this complexity combined with a bad economy creates problems I do not like. It seems like every other day I am on call I get some patient who delayed treatment… Read more »