I’m a Doctor. And This Stuff Even Confuses Me!!!

Extremely irate on the East Coast writes:

I’m a doctor. I have an MBA from a prestigious business school. I understand medical billing. Here’s a story for you that sums it all up.

After many years as an independent, my OBGYN recently joined a large physician group affiliated with a nationally known academic medical center.

(I’ll keep the name of the institution out of this since I like my OBGYN and several of my friends work at the medical center.)

Late last year I had a minor procedure at the academic medical center. My OBGYN handled the surgery. Everything went smoothly.

When the bill came I was charged a reasonable $600. This year I had to have a repeat of the same procedure. My OBGYN again performed the procedure. Same outcome. Same nurses. Same specialist. Same room. When my bill came in the mail I got the shock of my life. The total was four times as much as it had been a year earlier!!!! I had no idea.

My OBGYN’s office told me there is nothing they can do. Prices are set by the new academic medical center supergroup. As far as I can tell, the only thing that has changed is the sign over my doctor’s door.

What recourse do I have? What consumer protections does the ACA contain designed to prevent this kind of behavior?

I’m a doctor. I understand the issues involved. If I’m confused, how is the average consumer supposed to deal with this? This is extremely bad.

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29 replies »

  1. I think Legacyflyer is probably the CEO of a large academic hospital. Otherwise, he/she would not know as much of the REAL reasons why your bill is so incredibly high.

    One of my ER nurses had the misfortune to strain his shoulder, went to a small town ER where he got a 2 view plain x-ray and an arm sling. Bill = $2000. Why? Because the ER physicians coding group charged for “manipulation” (i.e., read, “we reduced his dislocated shoulder that wasn’t actually dislocated but we can bill more $ if we lie and say that it was” – there is another name for this practice, it’s known as FRAUD),


    also the tiny rural hospital needs to charge over $1000 for just walking in the door of their ER – why? becuz they also have diversity goals, and Q/A projects, and 8 layers of hospital administration, and billboards, and home health agencies, and Medicaid patients who use their ED like the 24/day walkin free clinic that it is . . .

    Oh, and yeah, beer costs too damn much too.

  2. I agree my thought after I read what happened where exactly the sme. Why wasn’t the costs disclosed upfront? Especially when they were aware of the changes in the office. Poor customer service on their part, pathetic really.

  3. Dr Palmer is right about facility fees being more lucrative.

    In my view, most of these facility fees are pure price gouging. I have long proposed the creation of specialized Health Courts, where a patient could bring in their padded bills for binding aribitration.

    No hospital person would in their right mind let someone like me become one of the arbitrators. I detest what hospitals do to squeeze money out of patients, and I would smile if real price controls drove some of these hospitals out of business.

    (That is not completely rational, but it is how I and a lot of other people feel.)

    Bob Hertz, The Health Care Crusade

  4. Friends whose practices were bought by the hospital tell me that–all of a sudden– they receive more for the exact same procedure–operation in this case–than before because the hospital can bill more. I am supposing that the hospital is adding claims for facility costs that were not there before and it may be that these docs are seeing temporary bonuses which will vanish tomorrow. It could be that this is the psychology of a ponzi scheme where making the first participant-doctors happy is critical to the continued sale of practices to the hospital.

  5. I was thinking the same thing…the internet has given voice to people who should never have it.

  6. Correct. Every MRI center has a different contracted fee for each insurer, and each insurer has a different fee for each MRI center. That’s a lot of job creation . . .

  7. Japan and Canada and Germany and France all have third party payors, and their prices for MRI’s are probably all under $1000. (in Japan’s case, according to T.R. Reid, about $100.)

    So a better answer, perhaps, would be that America has 3rd party payors who have failed to unite around a national fee schedule.

    Compare this to automobile repair. A body shop that wants insurance business does not submit a bill for $5,000 when they only expect $1,000.

    Medical providers regularly bill out the highest amount they might conceivably get from the most passive and ignorant payer. The providers then tend to accept the market average.

  8. “Explain to me how in my city, we have 1000 MRI machines in a 2 mile stretch on one street and the cost for a MRI on a person’s knee can vary from $1000 to $5000 for business’ that are a block away from one another?”

    Third party payers.

    Next question.

  9. I’m not an MBA but I am an SVP at a prestigious consultant office that charges fees for our consulting services. I have a BA in Business from a prestigious state college in Mn…..and even I know why the price is higher than the previous year. Does that mean that I am an “MBA by default”? Could I actually be a doctor?

    This just in doc, none of you idiots understand the services you bill for. You just bill them.

    Explain to me how in my city, we have 1000 MRI machines in a 2 mile stretch on one street and the cost for a MRI on a person’s knee can vary from $1000 to $5000 for business’ that are a block away from one another?

    Transparency my a**!

  10. I believe we should first pursue some other forms of alternative medicine. Since it was Coors that started the problem, maybe there is some other stronger “chill” medicine I should consider. It could be that the Denver altitude is part of the problem. Perhaps getting away to the East Coast could alleviate some of my extreme irritation. I wonder if THCB could recommend any doctors in that area.

  11. Aurthur,

    I think you need a strong chill pill. Suggest Haldol (Generic – Haloperidol)

  12. Again, I do not claim to be a doctor, but my pharmacist could not find a generic equivalent for “a chill pill”. Actually he could not find it as a brand name either. Would that make it non-formulary and is it a maintenance drug that I could receive through a mail order service? Would it have to be dispensed as written and will I have to pay the difference between the brand name copay and the non-formulary copay? And is there a coupon for this prescription? Surely any doctor, MBA, billing expert would have the answer to all of these questions and would certainly spend the time with their patients to be sure they get all the treatment and drugs they need in the least expensive manner.

  13. Aurthur,

    Whoa, I yanked your chain a little about the Broncos – who I was also rooting for.

    Take a chill pill

  14. Simply as a public service, I recommend this doctor, MBA, and billing expert disclose to her (assuming her due to OBGYN references) patients that she suffers from confusion, paranoid episodes (please protect me from my doctor and other so called friends), bouts of irate outbursts,and lack of empathy for her patient’s problems since a simple $2,400 medical bill qualifies as the shock of her life. Pretty sure that sums it all up.

  15. I am concerned that you would prescribe Prozac when you know I have been drinking at least six beers. But what do I know, I am not a doctor and have never claimed to be an MBA from a prestigious business school, or that I understand medical billing, because if I did claim those things and then went on to illustrate that I really do not understand billing and that my MBA is obviously not helped me understand some basic facts of my chosen profession and business, that would make me look pretty foolish.

  16. What I want to know is how did you get it for $600 the first time? Professional courtesy?

    Anyway – welcome to my world.

    “I’m a doctor.”

    Do you dissect and explain your billings and markups to your patients?

  17. With many more doctors like Mary Vanko, hospitals will start going broke in large numbers, unless they get a federal bailout. Hospitals are sustaining their bloated cost structure through price gouging and sloppy fee schedules, or so it would seem.

    Paul Levy, if you are reading this, let me know if I am wrong.

  18. You’re a doctor and an MBA, Surely you understand how this works.

    Next time come to see me in Merrillville in Northwest Indiana just outside Chicago. I do everything except major surgery and deliveries in the office. All of our patients work for the steel mills and have high dollar deductibles. They don’t want to go to the hospital where a simple hysteroscopy d and C polypectomy is at least 10,000 dollars. I accomplish the same procedure very comfortably for $500. Look for a private practice doc. You can do medical tourism here in the USA. None of this will get better. Another question …why do you need the same procedure again one year later?

  19. Bob,

    I am a physician and I agree with both of your points.

    “1. Non-discretionary emergency procedures could not be billed for more than 150% of Medicare. No more chargemasters for the uninsured or non-network patients. (several states have made legislative strides in this area already.)

    2. For discretionary care, a patient has the right to a cost estimate. This includes care that is uninsured and also any care that is subject to a deducttible and coinsurance.”

    As for your point #3, I would suggest that those same courts be used to resolve malpractice claims, which are the cause of a HUGE amount of unnecessary cost.

  20. The ACA did next to nothing about medical prices, and absolutely nothing about hospital prices and facility fees. The ACA was totally focused on expanding insurance coverage, so it gave a large pass to many stakeholders in return for accepting its insurance reforms.

    So be it.

    Now as to price gouging, there are remedies but the remedies are not what the medical profession is used to.

    Here is a snapshot of the price reform program I have been proposing for several years in The Health Care Crusade:

    1. Non-discretionary emergency procedures could not be billed for more than 150% of Medicare. No more chargemasters for the uninsured or non-network patients. (several states have made legislative strides in this area already.)

    2. For discretionary care, a patient has the right to a cost estimate. This includes care that is uninsured and also any care that is subject to a deducttible and coinsurance.

    No disclosure means no patient liability.

    3. The government must establish health courts, where patients could take unconscionable bills for binding arbitration.

    Consumer protection like this is long overdue!!

  21. But you don’t understand, you have received “health care” from a “provider” that is of much greater quality/value that what you had last year.

    1) Your “provider” made “meaningful use” of an electronic medical record. This slowed him/her down substantially, didn’t improve the quality of your care and increased costs. This is called progress.

    2) Previously, your doctor didn’t advertise. Now he/she does. The hospital now runs ads about how “We care about you” and “Our Nurses and Physicians are #1”. This influences people with low intelligence. (Hey, stupid people need healthcare too!)

    3) Some of what you paid goes to maintain “Q/A”, “Diversity”, “Patient Outreach” and “Prevention” programs that all have VPs and administrators of (insert buzzwords in random order) “Diversity, Out Reach”, “Outreach, Q/A”, “Prevention Q/A”, etc.


    4) To be fair, some of it went to subsidize the bad payor mix and teaching responsibilities of an Academic Medical Center.

    Now don’t you feel better?

  22. Arthur,

    Excellent points!

    After the Broncos humiliating loss to the Seahawks, perhaps you can get a discount on your Prozac prescription 😉

  23. Find a new OB/GYN not owned by the mob, and send a polite but accurate explanation of why you are leaving the practice to your old physician.

  24. EVERY commercial player in the health care system will continue to fight tooth and claw to preserve the opacity that pads their margins.

    Efficient Markets Hypothesis axiom 101: maximal transparency inexorably means minimal margin. It cannot be otherwise.

  25. I’m not sure that EOB is the answer here. As I understand it, the EOB is a cut and dried explanation of the facts of a medical bill – the amount that the specialist is charging, the amount that the insurer is willing to pay and the amount – if anything – that the patient is willing to pay. EOB is an after the fact thing and as such essentially useless to the reader in this situation ..

    Now, if the patient were able to get an ESTIMATED EOB prior to the procedure – there would be information to go on. It is not clear to me what is stopping that from happening ..

  26. I have a similar story. Last year I went to Kings and bought a six pack of Coors for $3.99. About a month ago I went to the Broncos game and purchased six beers and it cost me $39 before tip. Turns out my Kings cashier is also the beer man at the game. He told me there is nothing he could do as the prices are set by Kings and Coors Field. See I own a bar and I have a contract with Coors to deliver beer to my bar. But for some confusing reason, Coors does not understand my contract and is charging me way more at the stadium. Is there nothing in the ACA to protect me from this confusion? I just read the 85 pages of final regulations on the 90 day waiting period limit and did not see anything about universal beer pricing. And I thought this was going to be the most transparent administration in history.

  27. Unfortunately, the trend is moving towards independent physician groups being acquired by hospital systems. When this happens, the hospital takes over the billing and things get considerably more expensive for the pt. Often times this has to do with the facility charge tacked on by the hospital (even if you didn’t go to the actual hospital, it’s legal for them to bill this for any site they “own”). I agree with Shilpa, the answer is in the EOB for your specific case since it sounds like both procedures were done in the same hospital.

    True HC reform starts with the hospital and regulating what they can bill. No one goes broke from seeing a physician in the office.

  28. This sure is confusing, however, EOB is the answer. Look at the explanation of benefit on your insurance companies website – for your id. This will give you the jist, Call the insurance company and figure out what has changed in the plan from last year to this year. This will lead you further down. May be the facility/ obgyn/any other provider that you went to was in network last year and is out network for you this year. May be that their negotiations with the insurance company- were not revised. May also turn out to be just an error. It is always great to get an estimate before any scheduled procedure and make an informed decision. Good luck with your search!